A congressional committee received insight into protecting soldiers from predatory business practices from the head of the Watertown regional office of the state attorney general.
Deanna R. Nelson, assistant attorney general, told the Senate Commerce, Science & Transportation Committee that soldiers and other military personnel can be more vulnerable than other consumer groups, given that the rank on their uniform can allow their pay to be determined easily, they are routinely requested to provide access to their commanders for collection, and soldiers challenging contracts open themselves up to disciplinary actions such as the loss of rank.
They have paychecks, they will repay their debts, and they wont complain, Ms. Nelson said, according to a published transcript of her testimony.
Ms. Nelson spoke to the committee Wednesday in Washington, D.C., as a part of a hearing about aggressive business practices that service members face, including illegal foreclosures.
Many soldiers, Ms. Nelson said, dont know they have been duped until they have spent $8,000 on a computer and still face more bills, or face the loss of their security clearance.
They simply dont know, she said. She suggested that the problem was a combination of bad actors and systemic failures in financial education.
Businesses that prey on soldiers, Ms. Nelson testified, usually create a feeling of comfort with military customers through the placement of American flags or certificates of appreciation from military support organizations.
These are all usual bait presented to our service members, bait placed at the fingertips of our soldiers, she said.
For these businesses, Ms. Nelson said, the goal of their operations is not to sell a product, but to lock soldiers into financing agreements that take money directly from their paycheck, skirting federal regulations.
She said many businesses collecting debts place harassing calls to soldiers and their commanders, frequently bypassing federal laws such as the Fair Debt Collections Practices Act.
Pointing out a letter from Attorney General Eric T. Schneiderman and other attorneys general, she said significant reform for legislation like the Military Lending Act was necessary.
The Fort Drum area has seen multiple businesses face government scrutiny for their activities or financing programs.
Among those businesses are SmartBuy, which locked soldiers into exorbitant financing plans for items such as computers, and Fort Drum Vehicle Storage, which improperly stored and relocated the vehicles of deployed soldiers. The latter business is still under investigation by the state.
Mr. Schneiderman said during an October appearance in Watertown that his office has found success combating unscrupulous business operators by collaborating with federal regulators, such as the Consumer Finance Protection Bureau, and sharing information about unlawful businesses with similar agencies from other states.