An update from AG Bob Ferguson 
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Summer 2015



Protecting Those Who Protect Us

The men and women who honorably serve our country in uniform deserve our appreciation and respect. They take an oath to defend and protect our nation and our freedoms. In return, they deserve protection against unfair treatment and financial exploitation.

Unfortunately, veterans are too often targeted by scam artists and unscrupulous businesses looking to make a quick buck through unfair and deceptive practices. This update highlights recent cases brought by my office to put a stop to illegal Aid and Attendance scams that targeted veterans and their families. Vigorously enforcing existing laws is an important part of the work of my office.
My office also encourages the enactment of new laws and policies that offer greater protections. As Attorney General, I am always looking for ways I can advocate on behalf of Washington's veterans and military families. This update includes two examples of successful advocacy at the federal level.

It is an honor to serve Washington’s veterans, military personnel, and their families. You can learn more about what the Attorney General’s Office does to stand up for veterans and military families by reading my previous updates at


Washington Attorney General

Department of Defense Expands Military Lending Act
New Rule Closes Loopholes, Protects Against Predatory Loans

I joined a coalition of over 20 state Attorneys General in a call to strengthen the federal Military Lending Act (MLA). I am pleased to report that the U.S. Department of Defense (DoD) subsequently issued a new MLA regulation that incorporates many of our recommendations for reform.

Congress passed the MLA because of concerns of predatory lending practices to military service members. The MLA requires that credit offered to members of the military include enhanced protections. Among other things, the MLA:
  • Caps interest rates and fees at 36%;
  • Prohibits lenders from requiring service members to secure a loan by obtaining access to a bank account;
  • Requires lenders provide a clear description of payment obligation and other disclosures; and
  • Prohibits mandatory arbitration clauses and waivers of legal rights.
Previously, DoD regulations narrowly applied the MLA to cover only:
  • Payday loans;
  • Vehicle title loans; and
  • Tax refund anticipation loans.
Under the reformed rule, the MLA will now apply to all forms of "consumer credit" that are covered by the traditional definition of credit in the Truth in Lending Act. The protections now cover any installment or revolving loan, with the exception of loans secured by real estate or a purchase-money loan. For example, the MLA now applies to credit cards and car loans.

According to the federal Consumer Financial Protection Bureau, the new rule closes loopholes that were used by unscrupulous lenders to skirt the law with products that fell outside the scope of previous regulations.

The new rule will go into effect October 1, 2015.

Cracking Down on Aid and Attendance Scams

One of my top priorities is to safeguard consumers from deceptive and unfair business practices, especially those that target veterans and military personnel. In recent months, my office brought several actions to protect veterans and hold scammers accountable.

My office recently filed a lawsuit against a Snohomish couple who scammed elderly Washington residents applying for Medicaid and veterans benefits. Peter and Carolyn Cook, doing business as C&C Consulting, claimed to help their clients navigate applications for government assistance programs, including Aid and Attendance benefits from the federal Veterans Administration, charging them fees of $2,500 to $5,900. However, the Cooks had no special training to provide such consulting services, and they broke the law by offering Aid and Attendance consulting for a fee without accreditation from the Veterans Administration.

My office also recently took an enforcement action against Emerald Capital Preservation, Inc. (ECP) for failing to disclose a financial conflict of interest to veteran clients and charging unreasonable fees for basic services.

ECP provided elder care planning and information about qualifying for Aid and Attendance benefits from the Veterans Administration. They then referred their veteran clients to local attorneys to draft living trusts so they could reduce their income and assets in order to become eligible for the benefit. After completing the trusts, the attorneys sent the veteran clients back to ECP, which tacked on extra charges for simple services many firms provide for free.

ECP also failed to disclose that it was not affiliated or otherwise endorsed by the federal Veterans Administration of the Washington State Department of Veterans Affairs. Failing to provide this disclosure violated the state's Pension Poacher Prevention Act, a law my office sought in 2014 to improve enforcement tools against companies that target elderly veterans. This was the first case brought under the new law.

As part of the enforcement action, ECP agreed to refrain from the following: promoting advice on federal VA benefits, failing to disclose the fee-splitting arrangements to consumers, and charging unreasonable fees. ECP also agreed to pay over $26,000 in restitution to consumers.

The best thing you can do to protect yourself from pension poachers and their Aid and Attendance schemes is to get informed. The Federal Trade Commission provides some good advice at Also, you can get free assistance with benefit claims by contacting the Washington State Department of Veterans Affairs at 1-800-562-2308 or

Employer Support of the Guard and Reserve

I recently had the pleasure of speaking at an event hosted by the Employer Support of the Guard and Reserve (ESGR), a Department of Defense agency that works to develop and promote supportive work environments for members of the National Guard and Reserve. The event, called "Breakfast with the Boss," included representatives from many of the region's major employers who share a commitment to valuing their employees who also serve in uniform.

My remarks touched on some of the obligations employers have under the law to support their employees who have military service obligations. Supporting those who serve in uniform is not only a legal requirement; it is the right thing to do.

For employers or employees who have questions about the job protections provided under the law, ESGR is a great resource. ESGR informs and educates military service members and their civilian employers regarding their rights and responsibilities under the federal Uniformed Services Employment and Reemployment Rights Act. ESGR provides information and mediation services through its volunteer ombudsman program. More information about ESGR is available online at

Advocating for National Guard Emergency Responders

As I mentioned in my last update, I sent a letter to our state's congressional delegation asking them to pursue a change to federal law affecting the healthcare coverage of certain members of the National Guard. Currently, Guard members on federal active duty status as part of a regional Homeland Response Force are at risk of losing their healthcare coverage when they get ordered to state active duty for an emergency. The change in their duty status interrupts their eligibility for federal healthcare coverage. This issue came up last year in the context of mobilizing the National Guard to respond to the Oso landslide. We currently have military service members in state active duty status fighting wildfires. 

Representative Suzan DelBene, who represents Oso in Washington's 1st Congressional District, stepped up and announced she will be introducing a bill to address this issue.

I look forward to supporting Congresswoman DelBene's efforts to get this legislation passed. Our National Guard members stand ready to respond to natural disasters and other emergencies, and when they do, they should not have to worry about losing their health care coverage because of a legal technicality. DelBene's proposal would allow service members to retain their federal coverage during the temporary state service.
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