Vincent Safuto’s Weblog

Notes and observations

Scamming the troops is not supporting them

A recent article in The New York Times about an effort to rein in car dealers has drawn fire from auto dealers.

The lobby for auto dealers is very powerful and has lots of supporters in Congress, thanks to tons of money spread around, which is the way things get done and legislation gets stopped.

What’s behind the effort to rein in the dealers is that the Pentagon has weighed in. “…insisting that automobile purchases and dealer-assisted financing should be part of any new financial legislation because low-income military people are victimized in large numbers by shady car dealers that set up shop just outside many bases. Officials say distractions caused by these bad auto deals could affect the readiness of the armed forces.”

A few years ago, the Times did a series on how lousy investment schemes were foisted upon the military, and how retired enlisteds were hired to pitch the schemes to recruits in basic training. Of course, those behind the endeavors insisted they were just trying to help the troops attain financial security, but the investments were usually of the high-fee, low-return variety.

The trouble is that many people in the service – even in the higher ranks – are just not economically sophisticated. Teaching personal financial management may not be as important as teaching the skills needed to fight and survive in combat, but the military has to do it, even at the expense of those companies – often operated by retired military personnel – who want access to the troops’ paychecks.

Let’s be realistic here: Since time immemorial, efforts have been under way to separate military personnel from their money. People offering dubious products and services see the troops as an easy mark for their schemes, with regular paychecks and access to the command structure if a serviceperson does not repay.

I was in the Marine Corps in the late 1970s and early 1980s. In late 1978, I was stationed at NAS Millington in Tennessee for electronics training, and went on liberty to the little town off base. On my first excursion outside the gates, I noticed a “Serviceman’s Recreation Center” and a person called out to me to come in.

I did. It was full of the then-new quarter-eating videogame consoles and board games, but surprisingly empty of servicemen. Then, after two games of chess with my new “friend,” I realized why. It was actually a front for a jewelry sales operation, on easy credit terms, “for your mom or girlfriend.”

I managed to eventually dislodge myself and never went back there. Its stock in trade seemed to be just-out-of-basic sailors and Marines.

Sales pitches for everything from religion to cars to jewelry and more were a part of being in the service. Everybody wanted your money, and the towns outside bases were dubbed “military sucks.” Needless to say, the news of a possible base closure would cause intense panic among the business people. Used-car lots and other places selling things on credit feared the departure of the troops, and no wonder.

When I was stationed in Yuma, Ariz., at the Marine Corps Air Station, there was a new-car dealership near the base. I used to joke to myself that the owner was glad to see that the Marines were offering bonuses for re-enlistment because guys would sign up for six more years, take their $15,000 to $20,000 bonus and buy a new pickup truck.

As for me, I never owned a vehicle until after I got out. It was cheaper to cadge rides or walk where I needed to go. Sometimes I’d thumb a ride.

In a way I was fortunate, because credit for the military was hard to come by. I didn’t have a credit card until after I left the service, so I left without any debts.

The problem for people in the military is that while they have security, they have very little flexibility in terms of their income. They can’t quit because the service doesn’t pay enough, and it’s not easy to take a second job. I can work overtime at my job – if it’s offered, which it hasn’t been lately – and increase my pay, but in the military more hours on duty doesn’t equal more pay.

Civilians can relocate (though they may be limited geographically by homeownership, as I am) to areas where they can get better jobs, but the military people seldom have that option. If a member doesn’t like his or her job, boss or more, they’re stuck. Civilians can be stuck, too, but we just have more options.

Military or civilian, it’s way too easy to get into deep financial trouble, and regulation may be a way to deal with the damage, but ultimately it has to be a case where, as the founder of the men’s clothing store Sym’s always said in his ads, “An educated consumer is our best customer.”

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May 14, 2010 - Posted by | Living in the modern age | , , , , ,

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