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Scams that target older adults are just one part of the fraud landscape, and veterans have been no less of a target. According to the Federal Trade Commission (FTC), veterans, military service members, and their spouses lost $580 million to scams in 2024—up from $477 million in 2023. Veterans and military retirees racked up the most losses overall, with a median fraud loss of $700.1
Veterans should be especially alert about scams that target their service-earned benefits, such as the benefits buyout scam.
What is a benefits buyout scam?
A benefits buyout scam is when a scammer calls you and promises to give you a lump-sum payment in exchange for the rights to your future Department of Veterans Affairs (VA) disability or pension payments.
Operation Protect Veterans, a joint crime prevention campaign created by the U.S. Postal Inspection Service and AARP, advises veterans that in these turbulent economic times, they need to carefully examine offers like this and others that scammers try to use.
Why is a benefits buyout offer a scam?
A scammer who offers you a lump-sum cash payment in exchange for your benefits payments will fail to mention there are plenty of strings attached. For starters, many scammers will not let you terminate the deal early—you’re essentially “locked in.” They may also require you to buy a costly life insurance policy, which guarantees payment of your benefits should you pass away.
A pension advance could also mean higher taxes for you if you wind up in a higher tax bracket. This temporary boost in income may also end up disqualifying you from other critical government benefits you may need.
How can I protect myself from being scammed?
In general, it’s best to steer clear of anything that involves signing away your VA benefits. But if you are curious about whether you’re a target of a benefits buyout scam or any fraud targeting veterans, here are some steps you can take:2
- Don’t get pressured into making an immediate decision or sending any money. Never sign or agree to any arrangement before seeing it in writing.
- Ask a trusted friend, family member or certified financial planner to review anything requiring your signature.
- Check out the company or person making the offer. See if they are licensed in that state to offer financial services or, check with organizations such as the Better Business Bureau.
- Confirm that the person or company making the offer is a VA-accredited representative.
What should I do if I’ve been scammed?
If you think you’ve already been scammed, call your local police or sheriff’s department and notify your state’s Attorney General.
Then, consider filing a fraud report with these resources:
- The Federal Trade Commission: If you’re an active or retired servicemember, the FTC wants to hear about your experiences. When you do, you’ll also be telling more than 2,900 law enforcers who are members of the Consumer Sentinel Network.
- Better Business Bureau (BBB): Reporting a scam to the BBB can help identify scam trends and alert investigators to fraudulent businesses or schemes. Your story may also help the BBB issue scam alerts and prevent other veterans from falling prey to scammers.
- AARP Fraud Watch Network Hotline (1-877-908-3360): Reporting a scam to the AARP Fraud Watch Network can help raise awareness about scams targeting veterans and older adults. It also allows the organization track fraud trends and spread the word about new and emerging scams.
If you’re an older veteran or you have a disability, you should also contact Adult Protective Services. Visit the Eldercare Locator to find the agency near you that handles these matters or call 1-800-677-1116.
If I don’t take the buyout but still need money, what should I do?
Consider taking a loan from a reputable financial institution or lender instead, such as a credit union or bank. You can also take advantage of free financial counseling if you’re a beneficiary for the following VA life insurance plans:3
- Family Servicemembers' Group Life Insurance
- Servicemembers' Group Life Insurance
- Traumatic Injury Protection Program
- Veterans' Group Life Insurance
You can access FinancialPoint online and click on the “Help” link for login instructions or email fcs@FinancialPoint.com. Traumatic Injury Protection Program beneficiaries can also call 800-428-3416 for help, while beneficiaries from the remaining plans can call 888-243-7351.
While being scammed can feel embarrassing, keep in mind it can happen to anyone. Don’t let that stop you from reporting the fraud and helping protect other veterans. For more information on other scams targeting veterans, visit the Operation Protect Veterans website.
This contributed article was edited by NCOA Staff Jackie Thomas on May 20, 2026.
Sources
1. Federal Trade Commission. Consumer Sentinel Network Data Book 2024. March 2025 Found on the internet at https://www.ftc.gov/system/files/ftc_gov/pdf/csn-annual-data-book-2024.pdf
2. United States Postal Inspection Service. Operation Protect Veterans. Found on the Internet at https://www.uspis.gov/veterans
3. U.S. Department of Veterans Affairs. Life Insurance. Found on the internet at https://benefits.va.gov/insurance/bfcs.asp
