The men and women who served our country with honor and distinction deserve a lot of things. Praise. Respect. Honor. Compassion for those who are dealing with disabilities connected to service.
Here’s what they don’t deserve: attempts to take advantage of their military background to defraud them of their hard-earned benefits. But every day, scammers target veterans in attempts to poach their pensions, saddle them with bad financial products, and even steal their identities.
A 2021 AARP study found that veterans are 40% more likely to lose money to scammers. That’s double the percentage of non-veterans who fall prey to scammers. That figure doesn’t even cover the intangible loses that can be suffered due to identity theft.
The study also found that 78% of veterans have been targeted by scams specifically crafted to exploit their military service history.
So why do scammers target military people in particular? Some people believe it has to do with veterans implicitly trusting fellow members of the military, making them vulnerable to imposters posing as ex-military. Another reason could be veterans’ higher rate of PTSD, a condition that can make it more difficult for a veteran to know who to trust.
The bottom line is veterans are more susceptible to scams than the general population, and must be more vigilant. With that being said, let’s take a look at the top 5 scams targeting veterans, and how you can arm yourself against them.
1. The “Secret Veteran Benefits” Scam
The “Secret Veteran Benefits” scam is basically a phishing scam. If you’ve never heard the term before, phishing is “the practice of tricking Internet users (as through the use of deceptive email messages or websites) into revealing personal or confidential information which can then be used illicitly” (Merriam Webster definition).
Phishing officially entered the dictionary in 1996. But with so much of our financial and social lives having moved online in recent decades, the risks of revealing personal information in a phishing scam are much greater.
So how does the “Secret Veteran Benefits” scam work? Veterans are told they qualify for “secret” government programs or benefits that offer thousands of dollars — but first, the scammer attempts to collection personal information or a fee.
This scam exploits a common perception among some veterans that the Department of Veterans Affairs (VA) doesn’t deal with veterans squarely, or is less than fully transparent. Fair or not, the perception exists.
Now, as experienced VA-accredited claims experts who work with representatives of the Department on a daily basis, let us be the ones to assure you: There are no “secret” government programs or benefits “they don’t want you to know about.”
Though the eligibility requirements can be complex, every benefit available to veterans through the Department of Veterans Affairs is public knowledge, including current pay rates for disability compensation.
In fact, blogs like ours exist for the purpose of explaining the eligibility requirements for different types of benefits and how the system works. We will only ask you for personal information if you are seeking assistance with an existing VA disability claim, and that information will be kept strictly confidential per VA policy.
For an overview of what benefits are available to veterans and who qualifies, see our guide to Getting Started with the VA Claims Process.
2. Aid and Attendance Scam
In this scam, the veteran gets an offer from a company to move their assets into a trust or annuity so they can artificially qualify for Aid and Attendance, a benefit for veterans of low-wealth who require assisted-living or in-home care.
To be clear, the VA Aid and Attendance benefit is not a scam. This benefit can be a lifeline for low-wealth veterans and their spouses who can’t afford to pay for medical supplies, assisted living, or in-home caretakers. But not everyone qualifies.
The bad financial advisor may claim that all veterans are eligible for Aid and Attendance (not true) and promise that their financial product will get the veteran under the asset limit for Aid and Attendance.
The bad financial advisor will not advise the veteran that VA reviews the terms and conditions of any assets you may have transferred in the 3 years before filing the pension claim. Medicaid has a 5 year “lookback” period.
A poorly planned annuity or insurance policy can backfire in a number of ways.
- The veteran could lose Medicaid eligibility, which penalizes people for moving funds around prior to seeking coverage.
- If the veteran isn’t eligible for Aid and Attendance in the first place, they could wind up stuck with a financial investment they don’t need that ties up their assets for down the road care, and charges a huge penalty to taking out funds.
- The annuity could provide too much income, making the veteran ineligible for Aid and Attendance.
- If benefits are approved and VA later determines that the veteran wasn’t eligible, the claimant will be required to repay these benefits.
Before you talk to a commission-driven financial planner or asset planning attorney, do yourself a favor and learn more about who qualifies for Aid and Attendance Benefits and how to navigate the application process.
3. Pension Poaching Scam
The Aid and Attendance scam we’ve been discussing is one kind of pension poaching scam, but there are others to be aware of.
- Scammers may offer veterans lump sum payments up front, in exchange for signing over all their future monthly benefit checks.
- Pension poaching scams could also involve a caregiver who requires that the veteran or survivor have their benefits deposited into the caregiver’s bank account.
VA benefits should go directly to the beneficiary (veteran or survivor), not the caregiver or another third party.
Learn more about pension poaching scams and pension eligibility criteria at the VA’s website.
4. VA Loan Scams
The VA Loan Scam is a classic “too good to be true” situation. The scammer usually offers to refinance a VA loan at an extremely low rate. They may also offer benefits like thousands of dollars in cash back, skipped mortgage payments, no out-of-pocket costs, and no waiting period.
Some lenders marketing VA mortgage refinances may use aggressive and misleading advertising and sales tactics that they cannot honor.
Be prepared to understand that many of these advertised benefits add to the loan and increase the overall principal. These are red flags that may indicate that the loan is not going to benefit you.
For more information on specific VA refinancing offers to look out for, consult the Consumer Financial Protection Bureau’s recent blog post on the subject.
Bottom line: if it sounds too good to be true, it probably is.
5. Unaccredited VA Representatives
There are two types of VA claims representatives: accredited and unaccredited.
VA-accredited agents are held to a code of conduct set by Congress, designed to protect the interests of veterans.
Unaccredited agents are not legally authorized to assist veterans with disability claims.
Be aware of unaccredited agents presenting themselves as “medical assistance” companies. These companies may come draped in American flags and claim to be veteran-owned, but they are authorized to review VA files, are not required to demonstrate competency of the latest government rules and regulations, charge unreasonable fees or mislead veterans about their fee structure.
Here are some red flags that could indicate you’re dealing with an unaccredited scammer.
- They ask for a portion of your future monthly benefits.
- They ask for your VA login info or financial information. Accredited agents have access to VA systems and will never ask for veterans’ personal login credentials.
- They charge unreasonable fees in the neighborhood of 33%. (The VA-accredited agents at the Rep for Vets, for example, take no more than 20% of any past due benefits the VA owes you and your dependents. See our fee structure for more info.)
- They guarantee an outcome. Only the VA can determine your disability rating.
- They charge a fee to help you file an initial claim. If an agent or attorney assists in the initial claim filing, they must do so without charging.
Bottom line: If you can’t find the company on the VA’s Accrediation site, that means they are not accredited to assist you with VA claims and are likely a scam of some sort.
How to Report a Scam
• Call the 1-800-827-1000, Department of Veterans Affairs National Call Center
• Visit the Federal Trade Commission at https://www.ftc.gov
• Visit https://www.usa.gov/state-attorney-general to find your State Attorney
General
• Visit OIG at https://www.va.gov/oig/
Finding Reputable Veterans Assistance
Accredited claims agents like the Rep for Vets are officially authorized by the Dept. of Veterans Affairs to represent veterans who wish to appeal or request review of an adverse VA claim decision.
We are officially affiliated with NOVA, the National Organization of Veterans Advocates. NOVA regulates the accreditation of VA Agents and Attorneys. To become accredited, an applicant must demonstrate his or her good character and reputation as well as competence to represent veterans.
In the past 3 years alone, the VA has removed or suspended the accreditation of nearly 15,000 attorneys, claims agents and VSO representatives by enforcing its rules, according to recent testimony, according to a recent House hearing on VA accreditation.
Always check with NOVA before providing personal information to an organization or individual who claims to work on behalf of veterans.
Thousands of Veterans Trust the Rep for Vets
Here at the Rep for Vets, we don’t like the idea of veterans being defrauded out of their hard-earned benefits. We fight to ensure all veterans get the benefits they earned. This is our way of repaying our veterans for the service they’ve given and the sacrifices they’ve made.
If you have a VA claim or pension eligibility question, feel free to give us a call at (888) 573-7838. The initial consultation is free and kept in strict confidence.
Photo top: Vlad Sargu on Unsplash
