Arizona Aims to End Scams, Predatory Lending to Troops, Veterans

By Samantha L. Quigley
American Forces Press Service

Dec. 11, 2008 - Financial scams and predatory lending against servicemembers and veterans is so common that the Arizona attorney general has created an advisory board to stop it. "We got so many complaints that were related to either veterans or active-duty military on our consumer line that I felt it was necessary to set up this coordinating council," Terry Goddard said. "It's been very, very rewarding already and its only had one meeting."

Goddard, a retired Navy Reserve commander and Arizona's attorney general for the last six years, said he was sure some of the complaints his office receives were being covered by other entities. But it became clear that wasn't the case, he said.

To address the steady flow of similar complaints, including pay-day lending issues, mortgage and housing problems and other consumer scams, Goddard created the Attorney General's military and Veterans Advisory Council.

The council's first meeting on Nov. 12 included representatives from veterans groups and the military and resulted in an "explosion of additional ideas," Goddard said, adding that his office had been unaware of a problem with questionable charitable solicitations.

The problem occurs when charities solicit money from the general public on the premise of supporting troops and veterans. Some are legitimate and put the money to good use. Others, however, flirt with breaking the law because very little of the funds collected are used for the stated purpose.

"Although we've been working in that area, we were not aware how much of that directly applies to veterans and [servicemembers]," he said. "Something we're doing through our military and Veterans Council is to make sure that we get the word out about those charities that really aren't producing much benefit for the troops.

"I think it's important that the contributors know," he added.

The council also is ready to tackle the problem of foreclosure rescue schemes targeting servicemembers and veterans who find themselves facing foreclosure. The "rescuers" often grab the title to the house rather than actually fulfilling their promise to help to save it, Goddard said.

Payday loans, something regulated by both the federal and Arizona governments, are another problem the council is looking into. The loans typically carry exorbitant interest rates and can land military families or veterans in debt quickly.

"The protections are good, and they help establish a new standard of what would be expected from a short-term, small-dollar lender, but it apparently didn't solve the problem," Goddard said. "What we found is veterans are still vulnerable, [as are] families.

"They're really scurrilous schemes, and we're real concerned about them, and they seem to particularly target the military and the areas around bases," he added.

While the first meeting and the members' initial reactions were positive, Goddard said, he's not ready to market his ideas to his counterparts in other states just yet.

"I'm taking the cue ... from the veterans groups and the active-duty military," he said. "If their feedback after a couple of meetings is that this is working and this is of value, then I plan to go on the road and tell the National Association of Attorneys General that it's something that they really ought to try and duplicate."

More information on the council and consumer scams targeting veterans and servicemembers is available on the Arizona attorney general's Web site.