Consumer Protection Guide for Military Servicemembers
Dear Current Servicemembers and Veterans:
I, along with our fellow Kentuckians, would like to thank you for the sacrifices you have made in order to maintain the safety and freedoms of our Commonwealth and our country. Your selflessness, bravery, and service are an inspiration to us all.
In recent years, scam artists and fraudsters have targeted their deceptive business practices at servicemembers and their families. Servicemembers across the United States have fallen victim to abusive lending practices, paying for poor quality educational instruction, unlawful debt collection practices, identity theft, and a host of other unfair business practices.
In response to this trend, my office has developed this toolkit to allow you to combat those businesses and individuals that seek to do you and your family financial harm. It is my hope that this information will prevent the servicemembers and veterans of our Commonwealth from being taken advantage of by those who wish to profit by scamming our men and women in uniform.
Thank you, again, for your service, and please do not hesitate to contact our Office of Consumer Protection at 888.432.9257.
Special protections under the Servicemembers Civil Relief Act (SCRA)
Here are just a few protections offered under the SCRA. Download and review our toolkit to learn more.
- 6% Rate Cap on Most Debt — If a servicemember enters active military service, most creditors are required to reduce the interest rate on the debt to no more than 6% per year during the time of active service. Mortgage lenders are required to cap the mortgage interest rate at 6% per year during a servicemember’s active service and one year thereafter.
- Auto Lease Termination — If a servicemember enters active duty for 180 days or more, the servicemember has the right to terminate an auto lease. Servicemembers are required to give written notice of the termination to the dealer.
- Residential Lease Termination — If a servicemember enters active duty for 91 days or more, the servicemember has the right to terminate a residential lease agreement. Servicemembers are required to provide a written notice of the termination of the lease and a copy of their orders.
- Cell Phone Contract Termination — If a servicemember enters active duty for 90 days or more to a location that the cell phone provider does not service, the servicemember has the right to terminate the cell phone contract. The servicemember must provide written or electronic notice of termination and a copy of the military orders.
- Payday Lending — Under the Military Lending Act (MLA) payday lenders must cap the APR—which incorporates all fees and costs associated with the loan—at 36% when lending to servicemembers. In order for the MLA to apply, the payday loan must be closed-end credit with a term of 91 days or less in an amount of not more than $2,000. It is important for servicemembers to never allow payday lenders to extend the term of a loan past 91 days as this extension would remove the loan from the protections guaranteed under the MLA.
Men and women serving our country in the military or as reservists on active duty and their families have important rights under the Servicemembers Civil Relief Act and Uniformed Services Employment and Reemployment Rights Act. These federal laws protect service members from potential financial hardships they or their families may face while they are serving our country and upon their return from active duty.
In June 2012, General Conway led a group of 20 Attorneys General in securing a settlement with QuinStreet, Inc. over its operation of a website called GIBill.com. GIBill.com appeared to be a government website with information about GI Bill benefits, but was in fact a non-government related lead generator for the for-profit college industry. The settlement secured $2.5 million and transferred GIBill.com to the Department of Veterans Affairs. For more information, click here.
Servicemembers Civil Relief Act (SCRA) - Protections from termination of leases, evictions, repossessions; reduced rates on mortgages, credit card debt; delay of civil court actions, etc.
How the Attorney General can help
If you are having problems with your home mortgage, credit card, landlord or another consumer-related matter, the Office of the Attorney General may be able to help you resolve the dispute. For more information or to file a complaint, you may contact the Attorney General as follows:
Office of Kentucky Attorney General
1024 Capital Center Drive
Frankfort, KY 40601
or call 502-696-5389 or 888-432-9257 and select option 3.
Servicemembers who believe that their rights under the SCRA may have been violated should contact a Judge Advocate or their unit's Legal Assistance Officer. Additional information or assistance about reemployment issues can be obtained by contacting the Veterans' Employment and Training Service (VETS) of the Department of Labor at (202) 219-9110 or online at the US Department of Labor website. VETS investigates complaints and attempts to resolve them. VETS may subpoena documents, interview witnesses in efforts to resolve complaints. If a complaint is not resolved by VETS, it may be submitted to the United States Attorney General who may file a court action on the complainant’s behalf. Individuals may also file a private court action if they prefer not to file a complaint with VETS or the United States Attorney General refuses to take action on their complaint. Servicemembers may also contact the Kentucky Attorney General at the numbers listed above.
Information on the SCRA published by the Judge Advocate General
Judge's Guide to the Servicemembers' Civil Relief Act (194k PDF)
Frequently Asked Questions for Reservists Being Called to Active Duty
U.S. Department of Labor Veterans Employment and Training Service (VETS) Non-Technical Resource Guide to the USERRA