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FC NOW: The Fast Company Weblog

June 29, 2005

Intern BlogOff: Marketing to the Military (Con)

Congress finally did something this week about the predatory lending practices that have been taking advantage of military personnel for years.

Why do they need protection? Because they are essentially a captive audience.

Corporations know this -- and are in a perfect position to exploit those who don't really have a choice. Faced with deployment and military pay that may be below available civilian jobs, young service men and women turn to "payday" loans to pay their bills.

It is a sweet spot indeed to be the only food service provider in a public school or the only lender on a military base populated by cash-strapped households. Captive audience marketing aims to reduce competition -- and therefore the choice of service men and women.

Lenders focus on service men and women because they know that some branches of the military help them collect. Military personnel can face court-martial or other disciplinary action for failing to repay a loan. In fact, the Center for Responsible lending reports that nearly 10% of the 10,000 active duty military stationed at Fort Bliss in Texas have have needed financial counseling because of payday loans and other debt problems.

Barring these parasites from military bases is an effective way of combating the systematic targeting of the military and their families.