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A new report from the BBB Institute for Marketplace Trust (BBB Institute), the educational foundation of the International Association of Better Business Bureaus (IABBB), and the Association of Military Banks of America (AMBA) reveals that military consumers (service members, military spouses and veterans) report higher losses to scams compared to the general population.
Marketplace challenges facing the military community can be downloaded for free from the BBB Institute website.
“Military consumers face unique challenges in the marketplace,” said Melissa Lanning, BBB Institute executive director. “From navigating Permanent Change of Station moves to family separation during deployment to transitioning to civilian life. This report highlights the ways in which bad business practices and scams are impacting the military community.”
Key findings include:
• Higher losses: Based on the BBB Risk Index, military consumers reported a median loss of $196, significantly higher than the $130 reported by all consumers.
• Online purchase scams: The riskiest scam type for all military consumers, making up 32.3% of the scams reported, with 78.5% reporting a monetary loss.
• Investment/cryptocurrency scams: The riskiest scam for active-duty service members, with 70.8% reporting losses.
• Employment scams: The second riskiest scam type for military spouses and veterans.
• Impact: Military consumers face unique challenges such as frequent relocations and deployments, which may make them more vulnerable to scams.
Military consumers are more susceptible to employment, home improvement, romance, and government grant scams.
“There are legal protections in place to support service members and their families in the marketplace, but scammers don’t care about what is legal or ethical,” said Brigadier General Omuso George, US Army (Ret.), President and CEO of the Association of Military Banks of America (AMBA). “We exist in a dynamic threat environment when it comes to financial fraud. Increased awareness of those threats and education are our best defense to prevent our military consumers from losing their money to fraudsters. We are proud to partner with the Better Business Bureau in advancing a trustworthy marketplace.”
Contact and payment methods:
• The highest median dollar losses were reported from scams initiated in person, by phone, and via text message.
• Payment methods with the highest losses included wire transfer, check, and cash.
Complaints reported by military consumers:
• Military consumers had slightly more complaints settled via Better Business Bureau (81.1%) compared to all consumers (80.5%).
• Car dealerships and home warranty plans received the most complaints, consistently ranking in the top four since 2019.
Other impacts:
• 44% of military consumers reported losing confidence or peace of mind after being targeted by scams.
• Those who lost money were more likely to report experiencing financial distress, damaged credit, strained relationships and loss of potential earnings.
To better understand which scam types pose the highest risk, BBB Institute assesses risk based on the BBB Risk Index: Exposure x Susceptibility (or likelihood of loss) x Monetary Loss. These three factors help us understand the impact of scams and who is most vulnerable to specific types.
Note: “Military consumers” refers to service members, military spouses, and veterans who reported scams to BBB Scam Tracker. “All consumers” refers to every individual who reported a scam to BBB Scam Tracker (including military consumers).