There is an unfortunate trend circulating across the country that preys on the men and women of America's military. In recent months, several vastly different charity scams with veterans as their marks, have popped up all over the country. The harsh reality of these scams lies within the fact that Americans are proud of their volunteer service men and women. And because of that fact, many Americans feel it's their responsibility to give back to them. There are numerous ways to do so, but be careful—the Huffington Post reported “nearly half of the 39 veterans charities rated by the American Institute of Philanthropy report received F grades.”
The State of California recently brought a lawsuit against Help Hospitalized Veterans. In order to claim nonprofit status, charities must report their fundraising annually. According to its reported claims, the charitable organization known as Help Hospitalized Veterans ranks among the top 1 percent of all charities in America. Unfortunately, the charity also ranked at the bottom of watchdog groups' lists that rate charities based on financial management and using donations toward their causes for more than a decade.
The recommended standard for funds going toward a charitable cause is 65 percent—only 35 percent of Help Hospitalized Veterans' funds are assigned to its cause. The California lawsuit also stated the charity's president, Michael Lynch, received excessive compensation of more than $900,000. In addition, the complaint said former president Roger Chapin retired with a pension plan worth nearly $2 million. If that wasn't enough, Chapin is also accused of diverting funds from the charity through another one named Conquer Cancer and Alzheimer's Now.
Another example, a national charity asked for donations of old cars so they could be turned around and sold with the proceeds going directly to veterans. The charity was eventually called to account by the State of Utah and its Consumer Affairs Department for failing to follow through on their claims. Not only did veterans lose out on the proceeds, but the people who donated their cars were also allegedly misled by the charity.
GI Bill Scams
The GI Bill of Rights, more formally known as the Servicemen's Readjustment Act of 1944, was signed by President Franklin Roosevelt and aimed to provide various benefits to veterans including education and training, loan guaranty for homes and unemployment compensation. Believe it or not, before its signing, the bill was rather controversial. As recently as 2008, the bill was updated to give post-9/11 veterans “enhanced educational benefits that cover more educational expenses, provide a living allowance, money for books and the ability to transfer unused educational benefits to spouses or children.”
The Department of Veterans Affairs (the VA) has issued approximately $20 billion in Post-9/11 GI Bill benefit payments to more than 773,000 people and their respective educational institutions. The VA's education benefits are designed to give its veterans the right to choose which post-military option they want to pursue, i.e. college degrees, technical certifications or vocational training.
Since returning home, thousands of Iraq and Afghanistan veterans enrolled in online colleges, only to discover they had to apply for additional loans to cover the expense of these institutions because their GI Bill money didn't cover enough of it. Many veterans that expected to graduate with improved opportunities ended up with a large amount of debt and limited job prospects.
In response, 14 U.S. senators asked the VA to trademark the GI Bill, claiming the protection offered could help keep for-profit colleges from using the phrase to entice veterans to enroll in possibly deceptive programs. Headed by Sen. Tom Harkin (D-Iowa), the order would restrict any commercial use of the GI Bill. With a trademark, the VA could choose specific Websites to use the GI Bill phrase exclusively. The VA could also prevent the phrase GI Bill from being used in misleading marketing campaigns.
By law, for-profit colleges must receive at least 10% of their revenue from sources other than federal student loans. Because GI Bill military benefits are not classified as federal student loans, veterans and military families are attractive to such colleges. As explained by Hollister (Holly) Petraeus in “For-Profit Colleges, Vulnerable G.I.'s,” a New York Times Op-Ed, “[f]or every service member or veteran (or spouse or child, in the case of the post-9/11 GI Bill) enrolled at a for-profit college and paying with military education funds, that college can enroll nine others who are using nothing but Title IV money.”
In a particularly egregious case of a questionable marketing practices, the PBS program, “Frontline” reported a story about a recruiter enrolling Marines with serious brain injuries that prevented them from remembering the courses in which they had enrolled.
Other Scams Against Vets
On its website, a national research company encourages vets to use a link to get their military records (or a DD214 form) for their condition of discharge issued by the Defense Department. For most vets, they don't realize that these same forms are also available from the VA for free. In one such instance, a veteran from Wisconsin used the link, entered his credit card—and was charged $90. The form was promised to be delivered within a week, but the vet had not received anything after two months of waiting.
A number of other scams have also been reported, including:
- Posing as the VA: asking vets to update their credit card, bank or other financial records
- Charging for services: vets can get many services for free, such as military records (see above)
- Offering instant-approval loans: many of them contain high interest rates and hidden fees
- Security systems: companies arrive at the house of deployed military members and tell their spouses the service member ordered the system
- Posing as government contractors: then recruiting vets for post-military jobs, and asking for a copy of their passport
- Bogus charities: frequently their names reference the Armed Forces
- Special deals for vets: usually offering a discount on things like loans, car purchases and house rentals
These scams are deceptive, they come wrapped within the blanket of patriotism—both for the veterans themselves and on behalf of a grateful nation that's eager to pay its volunteer service men and women back. Because of this fact, the victims can be especially vulnerable to these types of scams. There's no sure way to avoid them, other than the old mantra: “If something seems too good to be true, it probably is.”