Joint Effort Will Fight Fraud Against Military Members

A new federal-state effort will fight fraud against members of the military. The Consumer Financial Protection Bureau (CFPB), the Department of Defense, and the Federal Trade Commission (FTC) were joined by the New York Attorney General to announce the development of a database to combat consumer financial frauds directed at military members, veterans, and their families.

The Repeat Offenders Against Military (ROAM) Database will track completed enforcement actions against companies and individuals who repeatedly scam military personnel.

“As a former Ohio Attorney General, I know how frustrating it is to expose a scam and then see it take root in another state. The ROAM database will help law enforcement crack down on frauds that cross state lines,” said CFPB Director Richard Cordray. “ROAM is a huge step forward in our mission to improve consumer protection for the military community.”

Law enforcement officials across the country, including state Attorneys General, United States Attorneys, and Judge Advocates (JAGs) from all five branches of the armed forces, will be able to search the ROAM database for publicly available information about completed civil and criminal legal actions against perpetrators of financial scams against military personnel, veterans, and their families.

Easy targets

“During my visits to military communities across the country, I continue to hear stories of servicemembers and veterans being defrauded by businesses that see our troops as easy targets for a quick profit. This database will help law enforcers stop some of the worst offenders – those that have made a practice of targeting our men and women in uniform and our veterans,” said Holly Petraeus, the CFPB’s Assistant Director for the Office of Servicemember Affairs.

In August 2011, New York Attorney General Eric T. Schneiderman secured a $3.5 million settlement against Rome Finance Co., Inc., an unlicensed lender. Rome operated storefronts, including “SmartBuy” in New York, that targeted servicemembers for sales and financing of high-priced electronics.

The servicemembers were locked into Rome’s high interest revolving credit contracts, which resulted in the troops paying undisclosed fees and incurring massive debt. Attorney General Schneiderman’s investigation revealed that this network was targeting servicemembers not only in New York, but also in California, Tennessee, Colorado, Georgia, North Carolina, Oklahoma, Texas, and even overseas.

Rome Finance and Britlee Inc. also targeted servicemembers near Fort Campbell, and they were the subjects of a $10.8 million judgment won by Tennessee Attorney General Bob Cooper in 2009. Tennessee and New York were able to share information regarding their cases, exemplifying the benefits of interstate cooperation in cases of this nature.

“The ROAM Database will allow us to act much more quickly to stop fraud against members of the military,” explained New York Attorney General Schneiderman. “Had the ROAM database existed during our investigation of SmartBuy, we likely could have shut them down more quickly and saved countless servicemembers thousands of dollars each. This database will be an important tool in our ongoing, comprehensive effort to crack down on those unscrupulous individuals who prey on the men and women who serve our country.”

Other Attorneys General are also embracing the ROAM Database. Earlier today, Attorneys General Jack Conway (KY) and Derek Schmidt (KS), co-chairmen of the Consumer Protection Committee of the National Association of Attorneys General, sent a letter to all of their fellow Attorneys General calling on them to contribute information to the ROAM Database.