Collecting debt from service members in the U.S. military requires a thorough understanding of applicable laws and a sensitivity to the issues soldiers face in the line of duty. A recent report from the Consumer Finance Protection Bureau indicated that service members submit complaints about aggressive debt collection tactics at twice the rate of the regular population. Practices that produce these types of complaints may not only be ineffective, they can be illegal.
The first step all debt collectors should take when they discover someone is a service member is to make a clear record of that fact in the relevant notes or database records. Collectors can verify whether someone is actually an active member of the military by checking their name, social security number, and date of birth on the Department of Defense's Defense Manpower Data Center. Once service is verified, all collectors who work on the account should be extra careful to show sensitivity and make sure they adhere to the law.
Laws Protecting Service Members
When it comes to debt collection, service members are protected by the same laws as any other citizen, but they are also afforded additional protections under the Service Members Civil Relief Act and the Military Lending Act. Collectors must:
- Abide by a 90-day stay when filing default judgements in court
- Avoid informing a commanding officer about any debts
- Not charge more than 6 percent interest on accounts
- Not continually withdraw funds from friends or family members
When subject to debt collection, service members are often required to directly invoke their rights according to the SCRA, but collectors still need to be careful. Agencies may still be liable for violations down the line if a solider complains.