Tag Archives: militaryfamiliespersonalfinance

The Many Disguises of Consumer Fraud

By Dr. Martie Gillen

Often times, the public is not fully aware of the pervasiveness of fraud, because news media focus primarily on major scams, such as Bernard Madoff’s Ponzi scheme. There are many types of frauds and scams. Below is a discussion of several types of frauds and scams.

Identity theft. Identity theft happens when someone steals your personal information and uses it without your permission. According to the Federal Trade Commission (FTC), identify theft is the most common form of consumer fraud and that holds true for military families. Military personnel and families can learn more about how to protect themselves from identify theft by reviewing the FTC’s publication What to Know, What to Do.

A photograph of a man wearing fake glasses, nose and mustache.
Photo by Jeff Turner

Tax identify theft. The FTC received almost 110,000 complaints about tax identify theft in 2014 accounting from about 33% of the overall complaints about identify theft. Tax identity theft typically happens when a scammer files a fraudulent tax return using a consumer’s Social Security number in order to receive a refund.

IRS impostor scams. This scam has increased drastically from over 2,500 in 2013 to almost 55,000 in 2014 and often consists of an individual contacting a consumer by phone, claiming that they are an IRS agent and that the consumer owes the IRS money. The impostor suggests to the consumer that they should pay immediately by wiring money or loading money on a pre-paid debit card if not, they are threatened with arrest or legal action. The calls may even appear to come from the Washington, D.C. area and impostors may even know the consumer’s full or partial Social Security number.

Phishing. A common cyber-avenue for fraud in which a scammer sends a mass email proposing a sham investment. If even a small percentage of recipients bite, the sender can bring in big dollars. Scammers may use social media such as Facebook and LinkedIn to target potential victims.

Investment fraud. A wide variety of investment frauds all have one thing in common: they sell something – a company, product, or security – that either does not exist or will not live up to the financial return being promised. Common red flags indicating investments may be fraudulent include: if they look too good to be true; offer a very high or “guaranteed” return at “no risk” to the investor; require an urgent response or cash payment; charge a steep upfront fee in return for making more money on an unspecified date; suggest recipients do not tell family members or friends about the offer; lure prospective investors with a “free lunch”; come unsolicited over the Internet, are of unknown origin, or come from overseas; instill fear that a failure to act would be very costly; cannot be questioned, inspected, or checked out further; and are so complex that they are difficult or impossible to understand.

Pump and dump scams. This scam occurs when fraudsters send out inflated and inaccurate information about a company’s stock they already own. Sham reports hyping the company’s profits or business prospects encourage naive investors to rush in and buy stock. When they do, the fraudster sells his shares for a large gain, depressing the price and leaving those who were defrauded with losses on their shares.

Advance fee fraud. Money is paid but the service or product is not delivered. The outcome never varies for the countless advance-fee scams. Debt-settlement scams that purport to help struggling consumers pay off debt become more pervasive during periods of recessions or slow growth. This type of fraud spiked during the recent recession.

Insurance fraud. Insurance fraud against individuals occurs when unscrupulous insurance agents or brokers sell health, auto, home or life insurance and divert premium payments to their personal bank accounts. Fabricated policy documents give victims the impression that the coverage is in effect, so they continue paying their premiums.

Many resources are available to help consumers becoming victims of fraud. A list of resources shared during the recent Predatory Lending Practices & How to Avoid Them webinar are available here.

This post was written by Dr. Martie Gillen, co-PI for the Personal Finance Concentration Area of the MFLN. Connect with her and the rest of the Personal Finance Team on Facebook and Twitter

Consumer Fraud & Military Families

By Dr. Martie Gillen

The term consumer fraud is used widely to cover sales that are both legal and illegal. This includes fraud for which sellers could be prosecuted in civil or criminal courts and practices that are not necessarily illegal, such as charging exorbitant prices. According to the Federal Trade Commission (FTC) deceptive acts are generally interpreted as those that are not reasonably avoidable by consumers, manifest a tendency to mislead, and cause a substantial number of consumers to suffer in a material way. The FTC tracks all types of consumer fraud.

Likely fueled by increased use of the Internet for making financial transactions, fraud complaints have sharply increased over the last decade. In fact, according to the FTC’s 2014 Consumer Sentinel Network Data Book over 1.5 million fraud related complaints were filed in 2014. While only 55% of consumers who reported a complaint also reported the amount paid the total cost to those consumers was over $1.7 billion. The median amount was $498.

In 2012, Dr. Gillen presented a 90-minute webinar on Financial Frauds & Scams. View the recording of this webinar below.

Military consumers reported over 87,000 (U.S. Army 42,315, U.S. Navy 18,268, U.S. Air Force 16,691, U.S. Marines $8,568, and U.S. Coast Guard 1,558) fraud complaints in 2014. The most common status among military consumers who reported a fraud complaint was retiree and/or veteran (66%) followed by dependent spouse of an active duty services member (13%).

Among military consumers, the most common reported fraud complaint was identity theft (27%) followed by imposter scams (26%), debt collection (8%), banks and lenders (5%), prizes, sweepstakes, and lotteries (3%), shop-at-home and catalog sales (2%), education (2%), telephone and mobile services (2%), auto related complaints (2%), credit bureaus, information furnishers and report users (1%), foreign money offers and counterfeit check scams (1%), internet services ( 1%), credit cards (1%), health care (1%), grants (1%), computer equipment and software (1%), mortgage foreclosure relief and debt management (1%), business and job opportunities (1%), television and electronic media (1%), and advance payments for credit services (<1%).

The most frequent way a military fraud victim’s information was misused was government documents or benefits fraud (45%) followed by credit card fraud (17%), phone or utilities fraud (13%), bank fraud (10%), and loan fraud (4%).

The FTC provides a great deal of information on how military families can protect themselves from from fraud. 

This post was written by Dr. Martie Gillen. Follow her on Twitter @MoneyMattersMG

Upcoming webinar: Family Transitions & Financial Changes

By Molly C. Herndon

Join the Personal Finance and Family Transitions teams for a collaborative webinar on Tuesday, October 13 at 11 a.m. ET. Dr. Barbara O’Neill and PhD Candidate, Jennifer Rea, will present a 90-minute webinar on Military Family Financial Transitions: Handling Changes to Income, Benefits and Money Management.

Created on canva.com by Molly Herndon
Created on canva.com by Molly Herndon

The two concentration areas are joining forces to best present the common problems that arise when military families leaving the military. Dr. O’Neill will focus on the financial issues while Ms. Rea will concentrate on the familial problems that are common during these times of transition.

The interactive nature of this webinar will offer many opportunities for webinar participants to offer their experience, via the webinar chat pod,  working with clients who are transitioning and share the resource they have used. Please join us to share with your colleagues!

This webinar will offer 1.5 CEUs for AFC-credentialed and CPFC-credentialed participants. Others who join the webinar that are uninterested in the financial continuing education units can earn a Certificate of Completion.

Created on canva.com by Molly Herndon
Created on canva.com by Molly Herndon

We will keep the conversation going on this topic when we meet for a Twitter Chat on Wednesday, Oct. 21 at 1 p.m. ET. Are you new to Twitter and interested in getting started? Follow along in the Step-by-Step Guide for Getting Started on Twitter to create a user name and bio line. If you’re interested in testing the waters before our chat on Oct. 21, you can join one of the many ongoing Personal Finance Twitter Chats that happen each week. These provide a good opportunity for Twitter newbies to “watch” and listen to what happens during a Twitter chat, and of course, chime in with your expertise!

Please join us for this exciting webinar on Tuesday, October 13, at 11 a.m. ET. Register, find supporting resources and join the webinar all through this link.

Public Benefits Help Ease Cash Flow

By Barbara O’Neill, Ph.D., CFP®, Rutgers Cooperative Extension, oneill@aesop.rutgers.edu

One of the common financial concerns of military families is making ends meet. Each year, I conduct seminars about household cash flow and how to develop a successful spending plan (budget). A spending plan is a plan for spending and saving money and includes two components: income and expenses. Good spending plans use realistic expense figures that are obtained by tracking expenses for a month or two to make sure that every dollar spent is accounted for.

Cash flow is the relationship between household income and expenses. Earn more than you spend and you’ve got positive cash flow. Do the exact opposite and your cash flow will be negative. To succeed financially, positive cash flow is required. At any income level, if you spend more than you earn, you will go broke.

Developing a spending plan (budget) is a lot like practicing weight control by watching what you eat (diet). In each case, there are three things that someone can do to improve. In the case of dieting, one can eat less, exercise more, or do a little of both. In the case of budgeting, one can increase income, reduce debt, or do a little of both. Rutgers Cooperative Extension has a helpful Spending Plan WorksheetOutdoor Recreation Blog.

There are a variety of ways to increase income including: working overtime, working a second job, requesting money loaned to others, charging adult children room and board, having a garage sale, and adjusting tax withholding. Another way to increase income is to take advantage of free or low-cost services provided by government agencies, non-profit human service providers, and local service organizations. Benefits and services received are considered “in kind” income because you would otherwise have to pay for them out of pocket.

Some public benefits have age and/or income restrictions while others are not restricted. Below is a list of some common public benefits that military families can take advantage of:

  • Rabies clinics sponsored by municipalities that provide free pet shots that might otherwise cost $50 or more
  • VITA (Volunteer Income Tax Assistance) offered at various locations in partnership with community sponsors and the Earned Income Tax Credit (EITC), if qualified by income and family size
  • DVDs, magazines, free educational programs, and Internet terminals are available at public libraries
  • Free or low cost mammograms, PSA tests, and other diagnostic screening tests are available at no or low cost through organizations such as county health departments, walk-in clinics, and other community organizations
  • Service clubs, such as Soroptimist and Rotary, that provide scholarships to eligible students
  • Free outdoor concerts and movies sponsored by municipalities, businesses, colleges, and other entities
  • Discounts for service members and veterans at restaurants, county fairs, theme parks, retailers, and more; a military ID may be required to take advantage of these discounts

For information about military family benefits that can help make ends meet, see http://militarybenefits.info/military-benefits-for-family-members/ and http://www.military.com/NewContent/1,13190,Spouse,00.html

Diversification and Dollar-Cost Averaging: Time-Tested Investment Strategies

By Barbara O’Neill, Ph.D., CFP®, Rutgers Cooperative Extension, oneill@aesop.rutgers.edu

Many military families are faced with investment decisions, such as whether or not to participate in the Thrift Savings Plan (TSP) available to service members or fund an IRA for retirement savings or a 529 plan for their children’s college savings. Some are new to investing and may have many questions about how to get started and how to succeed.

Two time-tested investment strategies are to diversify and dollar-cost average. Diversification means spreading your money among different investments to reduce the risk of loss from a decline in any one investment. There are several easy ways to diversify investments:

  • Place money in different asset classes (e.g., stocks, bonds, cash, and real estate), a strategy known as asset allocation
  • Choose different investments within each asset class (e.g., stock from different industries)
  • Purchase investments, such as mutual funds and exchange-traded funds, that contain diversified portfolios of stocks and/or bonds
  • Purchase well-diversified stock and bond index funds that track broad market indices
  • Purchase a lifestyle mutual fund that includes three asset classes- stock, bonds, and cash- in varying proportions. Investment companies generally offer several portfolios within these funds, each with a different amount of risk. For example, a growth portfolio would hold more stock as a percentage of assets than a moderate growth portfolio.
  • Purchase a lifecycle (target date) fund that manages money toward a future year (e.g., 2040) and generally reduces the percentage of stock and level of risk in the fund as the target date is approached. An example is the L fund in the TSP.

Dollar-cost averaging is the practice of investing equal amounts of money (e.g., $50) at a regular time interval (e.g., monthly), regardless of whether the value of investments is moving up or down. A common example is the amount that workers contribute to a tax-deferred retirement plan each pay period. Another is monthly deposits that are automatically debited from a bank account and transferred into a mutual fund investment plan.

Dollar-cost averaging reduces average share costs over time. Investors acquire more shares in periods of declining share prices and fewer shares in periods of higher prices. When dollar-cost averaging is practiced over long time periods, time diversification reduces investment risk. A simple illustration of dollar-cost averaging can be found in the table below. The average cost per share is $7.06 ($300 in deposits divided by 42.50 shares).

Illustration of Dollar Cost Averaging

Time Period Regular Investment Share Price Shares Acquired
Month 1 $ 50.00 $10.00 5.00
Month 2 $ 50.00 $ 8.00 6.25
Month 3 $ 50.00 $ 5.00 10.00
Month 4 $ 50.00 $ 5.00 10.00
Month 5 $ 50.00 $ 8.00 6.25
Month 6 $ 50.00 $10.00 5.00
Total $300.00   42.50


For more information about diversification and dollar-cost averaging, visit the eXtension Investing For Your Future home study course.


Unclaimed Assets: An Overlooked Source of Cash

By Barbara O’Neill, Ph.D., CFP®, Rutgers Cooperative Extension, oneill@aesop.rutgers.edu

Military families move around a lot and this can lead to instances of “missing money.” It is estimated that some $300 billion in personal financial assets are “missing” nationwide. This figure includes wages, insurance proceeds and dividends, bank accounts, stock and bond payments, utility company deposits, pension benefits, and tax refunds.

How does so much money get “lost” by so many people? There are a number of reasons:

  • People neglect to retrieve a utility security deposit after moving
  • Stock dividends or other payments are sent to the wrong address and never forwarded
  • People move or switch banks and fail to close out all their accounts
  • People change jobs and former employers don’t know where to send pension benefits or final wages
  • Clueless heirs are unaware that they are entitled to life insurance or cash left by a deceased relative
  • “Snowbirds” lose mail between their summer and winter homes

SaveThe good news is that, thanks to the Internet, it’s easier than ever to search for unclaimed property. The Web site, www.missingmoney.com, run by the National Association of Unclaimed Property Administrators, allows people to easily conduct a search. Another helpful resource is state unclaimed property agencies.

What do state governments have to do with unclaimed property? Plenty! By law, after a certain period of time (generally 3 to 10 years), unclaimed assets must be turned over to the state through a process called escheat. Hundreds of millions of dollars are escheated to states each year. Companies that don’t comply can be assessed fines. States keep this money until a rightful owner shows up to claim it.

It is advisable to conduct a search of every other state you (or a deceased relative) have lived in, as well as New York and Delaware, because that’s where a lot of financial institutions are incorporated. If you are due money, you’ll be sent an abandoned property claim form, which should be returned with proof of identity.

Another source of missing money is the Internal Revenue Service (IRS) at 800-829-1040. You can also check with the Pension Benefit Guaranty Corporation for missing pensions. The Pension Benefit Guaranty Corp. says it’s holding $265 million in unclaimed pensions and the average lost pension is worth about $1,100.

Will military families become wealthy from unclaimed property? Probably not. While there are some exceptionally large payments that occasionally make headlines, most claims are for less than $1,000. Nevertheless, a dollar is a dollar. Why not check to see if there’s hidden treasure with your name on it?

For further information about unclaimed assets, see http://www.missingmoney.com/ and http://www.kiplinger.com/article/retirement/T037-C000-S002-6-things-to-know-about-finding-unclaimed-assets.html.

Financial Planning at Divorce

 By Barbara O’Neill, Ph.D., CFP®, Rutgers Cooperative Extension, oneill@aesop.rutgers.edu

Military families often experience many stressful events (e.g., PCS moves and deployments). Another one is divorce. The period of time before and after a divorce is especially difficult because people are expected to make rational and far-reaching decisions at a time of emotional turmoil. This may also be their first experience with the court system and hiring an attorney. In addition, expenses often increase when a spouse moves out and sets up a separate household.

Below is some key information to share with military families to help them cope with the financial stresses of divorce:

  • Do not sign a property settlement agreement, or any divorce-related document, that you do not understand or you feel contains unfair terms. Consult your own attorney – not your spouse’s attorney – before signing anything
  • Estimate the dollar value of household property. Fair market value is the price at which a willing buyer will buy an item and a willing seller will sell it. Replacement value is the cost of replacing an item (e.g., refrigerator) at current prices. As spouses discuss how to divide property, the one who plans to keep property may think in terms of fair market value, while the other (who will be replacing property) may think in terms of replacement value.
  • Determine who will pay debts incurred during a marriage. List all debts including a home mortgage, car payments, and credit card accounts. Usually, one spouse or the other will assume an obligation and agree to “hold harmless” the other party. However, it is important to note that, if either party doesn’t pay a jointly held debt, creditors may collect from either spouse. Creditors are not bound by the terms of a divorce decree.
  • Plan for future retirement income. A divorced person is eligible for Social Security benefits based on former spouse’s earnings, even if the former spouse is not yet retired. In order to qualify for benefits, the marriage must have lasted at least ten years. For questions about division of military Retired Pay and the Survivor Benefit Plan (SBP), seek assistance from an attorney who is well versed in military divorce issues.
  • Know the tax consequences of divorce decisions. Marital status on December 31 determines tax-filing status for the year. Usually, the custodial parent claims a couple’s children as dependents. However, a custodial parent can waive the right to claim dependents as part of a divorce settlement, thus allowing the other parent to do so. A signed waiver statement (IRS Form #8332) from the custodial parent is required to be attached to the non-custodial parent’s tax return. Child support is neither deductible by the spouse who pays it nor included in the income of the recipient. Alimony, on the other hand, is taxable to the recipient and deductible as an adjustment to the payor’s gross income.
  • Recognize that 50/50 splits of assets are not necessarily equal. For example, if one spouse takes sole possession of the family home, he or she also shoulders the burden of future property taxes and repairs, as well as possible capital gains taxes. The other spouse, who receives the same dollar amount in cash, has an asset that will continue to grow. Clearly, this property distribution is not equal even though the dollar value is the same.
  • Encourage divorcing couples to consider hiring a professional mediator to resolve issues related to divorce. Mediators are trained not to “take sides” but, rather, to work out a settlement that is fair and equitable for both spouses. This includes both financial issues and other considerations such as child custody. Once these issues are resolved, each spouse’s attorney can assist with a final agreement. This is usually a far less expensive and time-consuming process than letting lawyers negotiate a settlement.

For further information about military family divorces, view the 2012 eXtension MFLNPF webinar, Financial Implications of Divorce. Additional information can be found here.

Predatory Lending Practices Webinar Coming Up

By Molly C. Herndon

July 15 is Military Consumer Protection Day and during the month of July a number of organizations are hosting events geared towards providing Military families with resources to prevent consumer fraud.

In this vein, the MiPayday Loans Neon Sign image by Jasonlitary Families Learning Network’s Personal Finance team will present a webinar on Predatory Lending Practices on Tuesday, July 28 at 11 a.m. ET. Speakers Dr. Barbara O’Neill and Marcus Beauregard will present a 90 minute webinar that will focus on the practices and schemes associated with predatory lending, as well as tips for educators and practitioners to share with clients to help them avoid becoming victims of these practices.

Of particular importance, this webinar will focus on the Regulation (32 CFR Part 232), which implements the Military Lending Act (MLA), which has been going through a significant revision so that the limitations in the MLA are effectively applied to credit available to Service members and their families.

We are excited for the expertise co-speaker, Marcus Beauregard will bring to this presentation.  Mr. Beauregard, Colonel, USAF (Retired) is the Chief of the DoD-State Liaison Office (DSLO) within the Office of the Deputy Assistant Secretary of Defense for Military Community and Family Policy.  Together with a Senior Liaison and 8 Regional Liaisons, he works with state governments on a slate of key issues important to Service members and their families.  Additionally, he is one of two individuals responsible for the Military Lending Act and updating the DoD regulation required to implement the law.  He spent 27  years in the U.S. Air Force, having assignments as a SquadronCommander, the Director of Financial Management for Air Force Services and the Director of Morale, Welfare and Recreation (MWR) Policy in the Office of the Secretary of Defense. He retired in July 2003 and continued to work as a contract employee from August 2003 to April 2010, at which time he became a civil service employee.  Mr. Beauregard developed the Financial Readiness Campaign in 2003, while on active duty as the Director of MWR Policy.  Following his retirement, he continued to work on financial readiness for DoD and helped establish the DSLO. In 2006, he was given the responsibility to oversee the implementation of the Military Lending Act.

Dr. O’Neill will present the first hour of this webinar, which will focus on the definition of predatory lending and characteristics of predatory loans, as well as descriptions of several common types of high-cost loans including payday, car title, and pawn shop loans and other forms of subprime lending. Mr. Beauregard will tackle the impact of predatory loans on military families and regulations in place to protect against fraud during the final 30 minutes of the webinar.
So, save the date of Tuesday, July 28 at 11 a.m. ET to join this exciting webinar. More information and details on how to join are available here. 

VLE #MFLNchat recap

The Personal Finance Virtual Learning Event, held June 2-4, featured daily Twitter chats focused on the topics discussed in that day’s webinar. The webinar speakers were on hand to answer questions and to dig deeper in to the topics discussed in the 90-minute sessions. Here, you can view all the tweets shared during these daily chats, including great discussion on promoting positive financial behavior change and resources to share and use with clients.

Twitter Chats: A Professional Development Tool


By Barbara O’Neill, Ph.D., CFP®

Rutgers Cooperative Extension

In early June, as part of the 3-Day Virtual Learning Event (VLE), the Military Families Learning Network (MFLN) held a series of three Twitter chats using the hash tag #MFLNchat. The eXtension VLE Learn page with archived webinars is  located here. The purpose of the Twitter chats was to extend conversations in the “chat” section of the webinars about encouraging positive financial behaviors through motivation, coaching, and counseling. A Storify summary of the three Twitter chats can be found here. Storify is a free online application that allows people to create “stories” from the text, links, and photos found within in tweets and Facebook and Google+ messages.

Prior to the three Twitter chats, a “Lite” Twitter Cohort was held to introduce chat participants to the basics of using Twitter. Each day for two weeks, cohort 36 cohort participants received e-mailed messages about using Twitter. Materials for the cohort are available here. Participants used the hashtag #twittercohort to hold asynchronous conversations with one another.

Twitter chats, on the other hand, involve synchronous conversations. As the number of Twitter users has grown since its inception in 2006, so has the use of Twitter for financial education. An increasingly outreach method is Twitter chats, which use the hashtag (#) symbol to hold a “conversation” through an organized stream of tweets from people interested in the same topic (e.g., credit).

The formatting convention used to organize Twitter chat threads is Q1 for Question 1 and A1 for participant responses to that question, with 8 to 10 different questions per one-hour chat. All users have do is log in to a Twitter application such as http://www.tchat.io/ or http://twubs.com/ at a designated time and time zone, type in the hashtag for the chat, and start responding to and/or asking questions to engage with others.

The MFLN plans future professional development Twitter chats and encourages Personal Financial Management Program (PFMP) staff to participate. Feel free to “lurk” for a while, if you’d like, and then jump in. Another good idea is to observe, and then participate in, these regular personal finance Twitter chats: #creditchat (Experian, 3 p.m. ET on Wednesdays), #wbchat (WiseBread, 3 p.m. ET on Thursdays), #cashchat (@MsMadamMoney, 12 noon ET on Fridays), and #mcchat (Money Crashers, 4 p.m. ET on Fridays).

Below are some screen shots that further explain how to navigate a Twitter chat:
  1. Go to as http://www.tchat.io/
  2. In the top, right corner click on “Sign In”
  3. If you are already logged into your Twitter account, this box will prompt you to “Authorize TweetChat…to use your account”. You then click on “Authorize App”


  1. If not it will ask you to log into your Twitter account. Log in with your Twitter handle and password.


  1. Then, in the top left hand corner, type in the hashtag you are following and then press, “Go”


For Example:
  • Experian Tweetchat’s hashtag is “#CreditChat”
  • Wisebread Tweetchat’s hashtag is “#WBchat”
  1. You will then be taken to a stream of Tweets, only with the hashtag you typed in during the last step.


  1. You can then Tweet or Retweet whatever you wish, and the http://www.tchat.io/ application will add the hashtag on for you so that you too can join the conversation!




Use these icons when you are tweeting:

 RespondThis allows you to Tweet at, or respond to, someone directly.

RetweetThis allows you to ReTweet someone else’s tweet; i.e., send it to your Twitter followers.

FavoriteThis allows you to Favorite someone’s Tweet; i.e., indicate that you like what they have shared.

Happy tweeting! I hope to see you on a personal finance Twitter chat soon.