Her own home-buying experience prompted her to write an item on home buying in the BBB military newsletter, she says. Home buying may illustrate a prime example of how it's not merely crooks and lenders preying on military personnel. America's military heroes also have been getting the short end of the stick from state and federal governments.
The first-time home-buyer federal income tax credit, available through December 1, lets eligible home buyers immediately recoup as much as $8,000 toward the down payment on a home. However, under this rule, if you rent or sell the home within three years, you must repay that money-a provision that sidelines members of the military, who are constantly threatened with the prospect of deployment. "I haven't lived in a house for three years since the 1990s!" Petraeus says, noting she was unable to take advantage of the tax credit. She says, however, that Rep. Charles Rangel, D-N.Y., has been trying to change the law to consider this impact on service members.
Petraeus visits Better Business Bureaus nationally-at least 120. She inspires them to man booths at military base events. So far this year, she estimates, the BBB impacted 9,000 military personnel-either through classes or via booths set up at consumer fairs. Some 750,000 copies of a Kiplinger/BBB personal finance guide also were distributed free for military families. There is online military financial information, divided by branch of service, at bbb.org/military.
One major point her Military Line hopes to drive home: Military personnel, before making a purchase or sending money to any company, need to check the company out with the BBB online for complaints. Also important to monitor: a company's BBB letter rating score, which ranges from "A+" to "F." The score measures a combination of factors on companies, such as time in operation, licenses and government actions against it, complaints and any advertising issues. She also hopes service members will call on the BBB to mediate complaints. A steady 50,000 BBB complaints annually come from military personnel, she estimates.
"She's [Petraeus] been fantastic-a great friend to the Department of Defense!" says David Julian, director of the office of personal finance at the Office of the Secretary of Defense. "We've invited her to military conferences every year. We get all the managers of all financial services together. Last year, she was one of the keynote speakers. Mrs. Petraeus or [her assistant] will do anything in their power to make any event or conference we invite them to."
When it comes to military personnel getting ripped off, your thoughts may turn to payday loans. These short-term, high-cost loans were blamed for sending military personnel into so much debt that many lost their security clearances.
That problem is relatively under control, Petraeus says. Today, payday loans for military and family members, thanks to the National Defense Authorization Act of 2007, are capped at a 36% annual percentage rate. "It sounds high," she says, "but the usual [payday lender APR] is 391%. That's if you don't roll it over!"
Because of the new interest rate cap, payday lenders won't lend to the military anymore because they can't make a profit, she says. Of greater concern now, she adds, are predatory lending and the Internet, which she dubs "the second home" of military personnel. In fact, she says she's a frequent "telecommuter."
"In terms of financial rip-offs, it's [the Internet] like the Wild West, and there's almost no regulation," she says.
Among the common Internet frauds are promises of loans, regardless of credit history, in exchange for up-front "advance" fees. Once money is wired, the recipient pockets the money-never to be found again. Fraudulent Internet sales of electronics and cars have been widespread. Crooks frequently operate outside the country, where U.S. regulators have no jurisdiction.