Preying on the troops


Geraldine Sealey
December 8, 2004 1:54AM (UTC)

Here's a heartwarming story for the holidays: Military families, who clearly don't have enough to worry about, what with their loved ones being shipped off to fight in an increasingly bloody and chaotic war with no end in sight, and who already get a pittance for their troubles, also are prey for predatory lenders who have access to troops pretty much with the Pentagon's okay. From the Times:

"Typically young, financially naove and often short of cash, military people present a lucrative customer base for high-cost instant lenders, known as payday lenders, as well as more traditional consumer finance outlets, whose rates can exceed 30 percent."

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"In the 37 states that allow them -- up from 28 five years ago -- payday lenders have opened a disproportionate number of outlets on the edges of military bases, a new study has found. And in the 13 states that bar them, payday lenders have nevertheless cropped up around bases in disguise, posing as catalog retailers or Internet cafes, regulators say. Besides sometimes adopting military names, they frequently advertise in base newspapers or operate online with special links to attract military customers."

One Naval petty officer interviewed by the Times found herself facing foreclosure on her home just days before shipping off to the Persian Gulf. "Hardships like this are becoming more common in the military as high-cost easy-money lenders increasingly make service members a target market. As a result, many military people have become trapped in a spiral of borrowing at sky-high rates that can ruin their finances, distract them from their duties and even destroy their careers. The military, for its part, has done little to deny these lenders access to the troops, relying instead on consumer education."


Geraldine Sealey

Geraldine Sealey is senior news editor at Salon.com.

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