The financial problems facing servicemembers can extend far beyond a bank balance – your debt could threaten your career.

“If servicemembers are unable to keep up those [financial] obligations, a blemish on their credit report can lead to security clearance revocation or even potential discharge from service, “ said Jim Rice, assistant director of the Office of Servicemember Affairs at the Consumer Financial Protection Bureau (CFPB), in April 19 testimony before the Senate Committee on Veterans’ Affairs. “We have seen that some debt collectors threaten, illegally, to report servicemembers to their chain of command to collect on a debt. Too often this occurs for debts that the servicemember may not even owe.”

[WEBINAR RECORDING: Financial Concerns Facing the Military Community]

Those in uniform are far from the only ones facing such threats – as credit card debt increases for those in their 60s and 70s, older military retirees may find themselves among the targets of debt collectors – including illegal threats to garnish federal benefits to pay for private debts.

Whether you’re seeking protection from harassment as you work out payment options or trying to avoid falling victim to scams, here are some tips and resources to know about debt collection from the CFBP and other sources.

Know Your Rights

Even if the debt is legitimate, debt collectors must follow strict rules when contacting a debtor. For instance, they may not:

• Threaten to inform a servicemember’s chain of command of any outstanding balances.
• Threaten a servicemember with punishment under the Uniform Code of Military Justice, or with the revocation of security clearance.
• Make repeated phone calls or use obscene language.

Learn more about how to recognize and report unfair collection practices at the CFBP website.

[RELATED: 5 Ways to Avoid Social Security Fraud]

Get the Facts

Unsure whether the debt collector is legitimate? One clear sign will be validation information – details a collector is required to provide at the time of initial contact or shortly thereafter.

This form generally includes the creditor’s name, an itemized report on the debt (to include interest, fees, etc.), account information associated with the debt, and contact instructions if the debtor has questions about the materials or believes the amount is incorrect.

No form? Ask the collector for the information in writing before moving forward with any payment arrangements. A collector who refuses to provide account information could be a scammer (More on that below). In addition to providing ways to report scams, the CFPB also offers sample letters for debtors to use in communication with collectors.

[RELATED: Report Shines Light on Why Scammers Target Servicemembers and Veterans]

Servicemembers may also want to reach out for legal assistance, especially when statutes of limitations may affect the amount owed. Find your local legal assistance office using this link.

Read the Red Flags

In addition to coming up empty when asked for information the collector should know (account numbers, etc.), the Texas attorney general’s website provides a few more tips to consider when detecting potential scams:  

• Unwillingness to provide details about their collection agency, to include contact information like an address or phone number.
• Threatening communications, especially threats of jail time.
• Seeking immediate repayment, often through untraceable methods like gift cards or a wire transfer.

MOAA has several anti-fraud resources available, to include articles and webinars (exclusive to Premium and Life members). Learn more about these items at this link, and keep up with the latest financial news from MOAA at MOAA.org/Finance.