Headline:  Why are members in the military at enhanced risk regarding scammers?

Body:  So, most military members are in pretty good shape physically, and it can be difficult to perceive them as vulnerable to much.  Unfortunately, they can be at significant risk from scammers.  Just put yourself in their fatigues for a moment.    You would be in your early 20s,   You might be married, and your spouse might be living states awsy.    You might be thinking about buying your first house.  All of these are momentous things, but unfortunately, each also opens you to a variety of scammers.  Now that cryptocurrency is on the menu and moving so quickly,  there are yet another set of scammers waiting to digitally lighten the service-member’s wallet.  So, why do these people have targets on their chests?    Let’s look at that.

Why are the scammers’ gunsights on these Veterans.

When a tick looks for a host to hook on to, it is looking for an organism with a good blood supply, and one unlikely to notice the free-rider or do anything about them.  Applying this to the human parasitism,  the military members are targets because they have a very reliable salary, and are likely so busy they do not have time to investigate any red flags that do arise.

Is this really a big deal?

You can see the results in the numbers. The Federal Trade Commission (FTC) Consumer Sentinel Network Data Book 2021 found that the median loss for all fraud reports was $500. But military members report a median loss of $600, and active-duty service members report median losses of $881.  This suggests that the “too busy to notice” is a major portion of this vulnerability.

Are there some particular types of scams that prey upon the military members?

Yes, there are some kinds of scams that prey selectively upon military members.   One, is the Romantic scam.    In this one, the scammer builds up a relationship with the member (sexual or not) then asks them for amounts of money or cryptocurrency to help them deal with a “family emergency” or some such exigency.  Money in hand, they disappear.  Largely, these military members are younger adults and looking to develop relationships, so this scam is laser-focused upon somebody like them.  Another scam that seems hyper-focused upon military members is the “tech support” scam.  In this scam, you get a notification  that your computer is infected.   When you call “tech support” you speak with one of the actual scammers, and they are able to “walk” through your entire system.     Identification information and digital assets are lkkely to be compromised.  Given that these younger people are in the largest group most likely to appreciate cryptocurrency, this too is focused directly upon them.

So, what can be done to help defend these patriotic military members?

We can legislate some protection for these patriotic Americans.   In fact, in June 2022, Senators Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.) introduced S. 4356 – the Responsible Financial Innovation Act (RFIA). This bill outlines a comprehensive regulatory framework for digital assets that attempts to address a number of the key issues (a section-by-section summary can be found here).    But, it does circle around 2 attributes:

1. It requires disclosures concerning the digital assets and  provides funding for a variety of reports to be done, concerning the distributed  digital assets. 
2. Puts the Stablecoins on a 1:1 basis with USD.

The Verdict

One would not even consider sending out a soldier without his or her rifle, extra ammunition, hunting knife and perhaps a sidearm.  So, it seems strange to me that these young people are given their first real paycheck, they have no choice but to contact the enemy, in this case, credit card companies and others who want to take advantage of this young adult who has been “armed” with a paycheck, but not fore-warned with intelligence information that they need.

REFERENCES

8 Military and Veteran Scams to Watch Out For – Experian

Federal report finds more service members are reporting identity theft (yahoo.com)

The Opportunity Before Congress on Crypto Legislation – Chainalysis

2024 U.S. defense bill drops crypto rules from legislation (cryptoslate.com)

Editor’s Note: Please note that the information contained herein is meant only for general education: This should not be construed as Tax Advice.   Personal attributes could make a material difference in the advice given, so, before taking action, please consult your tax advisor or CPA.