Delaware Attorney General Beau Biden and U.S. Consumer Financial Protection Bureau Assistant Director Holly Petraeus held a town hall meeting at Dover Air Force Base Friday to advise airmen of the consumer fraud that lurks for them.
Consumer fraud predators constantly roam about seeking whom they can victimize next, be they senior citizens, naïve consumers and even members of the mighty U.S. Military.
As such, Delaware Attorney General Beau Biden and U.S. Consumer Financial Protection Bureau Assistant Director Holly Petraeus held a town hall meeting at Dover Air Force Base Friday to advise airmen of the consumer fraud that lurks for them. They sat down with commissioned and non-commissioned officers.
Those officers will relate what they learned to the men and women serving under them, Major Jason Wolff said.
Scam artists have actually increased their attempts to rip people off in the wake of the Great Recession, Biden said.
“When people are in tough shape and desperate, they are more susceptible to that deal that looks too good to be true,” he said. “These folks who prey on citizens don’t discriminate between civilians and people in the military.
“And, unfortunately, they sometimes target the military because they know that airmen returning from oversees and from war zones sometimes come back with cash in our pocket,” said Biden, who serves in the U.S. Army National Guard. “So, we’re an easy mark.”
Senior Master Sgt. Patrick Piazza started things off with a poignant question about the high interest loans given by some local car dealerships. One young man in his squadron had 26 percent interest on his car loan, Piazza said.
“He was actually making monthly payments on his down payment,” he said. “What really concerns me is the guy who called me to ask if I could help get this payment is a retired master sergeant. I feel like these guys know the position we’re in and taking advantage of our guys.”
The Consumer Financial Protection Bureau does monitor car lots selling used cars and writing their own loans, Petraeus said. They are often the dealers who take customers who can’t afford much of a car or cannot get favorable interest rates on their loans because of their lousy credit scores, she said.
“They tend to be selling older cars. But since they write their own loans they can pretty much put whatever price they want on that car,” Petraeus said. “And the average markup is 100 percent on the value of the car when they sell it. They can also set the interest rate they want to set.”
It is also common for them to enlist retired military personnel to help with the marketing of such loans, she said.
“If you’re young, what do you learn at boot camp? That you respect senior people,” she said. “So, if an E8 tells you it’s a good thing, you’re more apt to believe it is.”
But documenting stories like this gives the bureau a chance to show there is a systemic problem that needs a fix in place, she said.
Biden pledged to have his office look into this specific case and others similar to it.
Often, airmen, soldiers, sailors and Marines are online looking to see what motorcycle or what car they’re going to buy as soon as they hit the ground, Biden said. And there are some unsavory characters waiting for them.
Lenders will go to great lengths to make sure the monthly payment for such loans is as small as possible, he said. What consumers need to do is look at how much interest is paid during the length of the note. This falls along the same lines of the Obama administration's successful fight to compel banks and credit card companies to state how much money people will pay in interest if they just make the minimum payment each month.
“Our financial literacy as a nation is not what it should be,” he said. “And that’s one of the reasons we’re here today.”