Transcripts For CSPAN3 Senate Hearing On COVID-19 Scams 20240712

Good afternoon as chairman of the Senate Commerce subcommittee on manufacture, trade and Consumer Protection i welcome you all here today to a hearing entitled, protecting americans from covid19 scams. The nation continues to fight the unprecedented Public Health present and president Public Health crisis brought on by the covid19 pandemic. In light of the serious threat this post to america, in the shoe shuddering of mainstream businesses, the response of Public Health protocols, have been felt in every corner of the country. It has been clear the preventive practices, policies, and resources, including expanded testing case testing capabilities and the ability to have protective equipment or absolute assess these to reopening the economy extinguishing this health crisis. However, during this time of National Emergency recorded and recovery, there are frustration scam artists that seek to take advantage of consumers, especially of the nations most vulnerable communities like that of our nations seniors. In fact, the ftcs Consumer Sentinel Network reports that consumers across the u. S. Have reported over 136,000 Different Cases of covid related scams totaling from january one to july 2020. More specifically, at home in kansas, over the same period of, time consumers report over 500 related cases totaling over 800,000 dollars in financial losses. Everyone should also bear in mind these are only the reported cases and that is fair to assume that there are a number of harmful consumer scams and have not been reported today. The variety of these increasingly complex scams remains difficult for any consumer to wrap their head around, much less defend themselves against whether be Unsubstantiated Health benefits advertised for certain products, Illegal Robocalls, fraudulent donations, solicitations, or even impostors claiming to be from federal agencies collecting mandatory payments, raising awareness to these harmful practices is critical to educate consumers in protecting themselves as such, subcommittee has michelin from Law Enforcement industries and Consumer Protection act experts in their efforts to not only identified address these harms, but also what they are doing to prevent these harms from occurring in the first place. Additionally, if there is a role for congress to play in supporting these efforts and those suggestions we will need today and in the future. More specifically i look for the hearing from the federal trade commission on Heather Cohen u. S. Safe web is addressing covid scam stemming from abroad and how an extension act which i introduced with the Ranking Member senator blumenthal is critical for maintaining these lot for coordination efforts. Additionally, i would be interested to hear from witnesses about any specific efforts directed to particularly vulnerable groups of americans like our seniors, my colleague, senator klobuchar joined me introducing, protecting seniors from emergency scam act which directly ftc to report to congress, targeting seniors. Based recommendations on how to prevent future scams during emergencies and appropriately, distributing such information to seniors or their caregivers. Finally, the subcommittee looks forward to hearing more about current forsman efforts to detect and prosecute criminal organizations engaged in these illegal activities if there are ways congress can assist the car framework of Government Task force, his forces joining initially with state local agencies and partnership in the private sector to address the crimes, the subcommittee would again welcome the suggestions. This subcommittee provides a brighter perspective on the same important issues. During the subcommittee is the audible derrick schmidt, attorney general the state of kansas, mr. Andrews, mitt rector of the ftcs bureau of Consumer Protection, mr. Do shower, man founder of sea and ceo of no before ink, and ms. Lower, clearly policy director for the center of science in the public interest. While the food and Drug Administration was not able to join us today, the agency has been active in protecting consumers throughout this pandemic and provide testimony for the subcommittees consideration, and agreed to respond for questions on the record from the Committee Members as well. Finally, the u. S. Telecoms provided a lot of the record describing the collaborative efforts of companies in the industry truly spectrum to actively tracing identify sources of Illegal Robocalls that have only increased frequency during the pandemic. I asked this letter be submitted for the record. Without objection, it is. With that, i now turn to the Ranking Member, senator blumenthal, for his Opening Statement. Thank, you mister chairman, thank you for having this hearing. In the wake of almost every disaster in this country, in a matter how dire, there are always bottom feeders and con artists who exploit peoples fears and hopes we all know, probably everybody watching and listening today knows there is no cure for covid19 and there is no vaccine or other medical prevention. That has not stopped the caught artists and scams from exploiting peoples fears and hopes form that they have defied both science and common decency and taking advantage of people financially so, the scams range from the invasion of privacy and products that are useless, price gouging, mortgage and Student Loan Relief scams, false cures and fake tests, cons, but more than just financial loss, people face Real Health Care danger. False cures can kill. False heroes not only take peoples money, they can kill them and deception can be deadly so. So, there are a variety of products, and in fact, the ftc has issued 255 warnings. Those 255 companies were defrauding and endangering consumers before they were caught. Theres 255 companies are among hundreds of others that are still doing business. Those 255 companies had paid no cost, none, breaking the law and harming people, despite the ftcs warning letters, and they are still doing business. They may have changed their marketing pitches to be slightly less deceptive and misleading, but they are still out there and if warning letters will not protect consumers, on march 9th, i wrote to the ftc and fda calling on both agencies to take more aggressive action to stop the marketing and sale of fake coronavirus cures, warning letters to marketers, field against consumers fair notice. They failed to inform. The field to correct wrong information and they said no real signals. There needs to be a real deterrence, not just warning letters for or a slap on the wrist im also alarm that again we see high tech firms enabling harms through negligence and an accident. Last monday i wrote the ftc and fda on dozens of unsafe supplements being sold on amazon and that are online marketplaces, that claimed to kill viruses. Amazon still has supplements, ton, explore by attacks, in a search for the covid here. We need to stop the snake oil salesman. I mentioned a number of them in my march 9th letter. In particular, tv evangelist jim baker who recently promoted a celluloid silver on his show, claiming that it would eliminate viruses such as coronavirus. Another one, cellular silver itself claims to quote, achieve 99. 99 complete kill against many microorganisms. Again, this is deception. We find these kinds of utterly false ads for quintessence, aroma therapy, energetics, for rwanda, vivid by, holistic clinic, herbal amy, there is a list and it is growing so many of us i think hope that this crisis would pass swiftly and that we could return to normal life, both the Health Care Crisis and the economic crisis. We are six months into this pandemic. There is no end in sight to this horrendous national suffering we have seen hardship and heartbreak. It has been aggravated, not reduced, by many of these false and misleading promises for products that threaten the health care, endanger lives, take money from people unfairly, and illegally, but also pose grave dangerous to the Public Health, and if we can do something about them, mister chairman, we will accomplish a lot of good for the american people. Thank you. Senator blumenthal, thank you. We now will hear testimony from our witnesses and we will begin with the honorable derek schmidt, attorney general, state of kansas. Thank, you mister chairman. Chairman rand, from cameron moran, thank you for the invitation and thank you for accommodating our remote testimony today. I will admit is the first time ive presented congressional testimony without leaving the office of the attorney general so, i would hope it lives up to your needs. Mister chairman, you have, both you and the Ranking Member, have laid out very well the framework in which we operate operate is a state level enforcement agency. You have vibrant testimony and i thought i would use my minutes here for oral presentations to just emphasize a few of the highlights that weve already presented to you in writing. Let me first discuss one case, for the purpose of illustrating, not because that case isnt necessarily all that extraordinary, but it illustrates some of the types of Enforcement Actions at the state level that we are engaged in. Already filed a lawsuit prior to the covid pandemic against a fellow named sean parcels. I actually have a civil and criminal litigation against impending so i am obligated at this point to say to criminal charges are only accusations and that it is presumed innocent unless proven guilty, but, on the civil, for the enforcement action, who had accused mr. Parcels of violating our studies consumer laws by selling autopsy services, Tissue Recovery Services and other related types of Services Without having the qualifications to do so. We had him in joined from operating with the state of kansas from Court Ordered during our litigation and then along came covid and we received information after the pandemic erupted in the public consciousness that our enjoin defendant had been set up some new companies and was peddling essentially the same services, although in a new package outside of kansas, beyond where he was born joined and specifically he was marketing is unqualified services to families and individuals who were, who had loved ones that were deceased as a result of covid to do autopsy and tissue recoveries which in my view, he is entirely unqualified. We were able to go back in front of our judge and receive an expanded temporary restraining order that prevents him from representing himself on any of this, including on the covid related services, and also bars him from leaving the state of kansas without case by case permission from our court. For our use this case just to illustrate, you know, we often talk at the broad policy level about sort of the collective impact of cases and behaviors by groups and defendants, groups of companies, whatever it maybe theirs are certainly important, but at the end of the day, Enforcement Actions, at least at the state level, typically boiled down to one defendant or associated group, one group of victims, and one group of misconduct and, so those are the types of cases we wind up dealing with with some regularity. So beyond that individual case, but let me just mention some of the types of complaints, of scams, and related misconduct we have been receiving since the pandemic erupted on this stage in march. We have investigations pending with respect to each of these categories, i will be able to discuss the particular vestiges but i can certainly talk about the general approach and subject matter let me say, as with you, mister chairman, and the Ranking Member of already pointed out, the cooks and scam artists use the same tools they always use, trying to get into peoples pocketbooks. They just changed the messaging to reflect the current concerns about covid and to pray upon what people are currently worried about. So, we saw for example, a first wave related to Contact Tracing, something that back in march most americans had never heard of the Text Messages becoming a claim along the lines of, this is an official communication letting you know that you have been in contact with a person who has tested positive for covid19, please click on this link, to help you know we need to do next. Of course, it was a fishing email and clicking on the link resulted in an invitation to provide personal information that had nothing to do with any legitimate Public Health purpose. We put out an early consumer alert in our state on that to raise awareness and try to help people avoid the problem because it is obviously much easier to prevent people from becoming a victim that this is traced down their money once it is on, particular a scammers operate outside of our jurisdiction often from offshore. Another type of scam that we have seen a lot of complaints on, already mentioned by senator blumenthal, or covid prevention and treatment scams. It is everything you have read about, and they come in and all the usual way, sometimes by robocall, and sometimes by personal, call sometimes by text message, sometimes by email, weve seen ppe scams, plans to sell ppe to folks and then either there was none or it existed but was subpar or it existed and it was good but it was stolen and it was not there is to sell. We have seen all of the above. We have seen scams related to stimulus checks, often a government pasta type of scams, communications saying, folks, we are from the Small Business administration, we are from the irs, we are from, fill in the blank Government Agency and we are here to assist you and making sure you get the payment to which you are entitled, and we have seen fraudulent unemployment claims, usually the objective there is to get personal formation and get a payment. Finally, mister chairman, i might just say, from our standpoint, the ability to cooperate with federal agencies, the vast majority of Law Enforcement in this country, on scans and, fraud is conducted in the state and local level but we are geographically and jurisdictional limited. And it makes no sense for us to be doing our thing in the territory this kansas and the federal agencies to be doing their thing in the territory that is kansas and us not to be coordinating so, we always coordinate, particularly with our Regional Agency office in kansas city. We have a very good working relationship with principal agencies you would expect for this type of work, whether it is hhs, oig or the fbi, secret service, among others and we have readable those efforts during covid two things i might suggest for consideration on a policy standpoint related to that, or proposed with this, mister chairman, one is i do think there is room, i suggested this, i know, to you, before covid and i think it has proven the point, i do think there is room for a more structured relationship between state level and forces in our case and attorney generals and our regional federal Law Enforcement partners. What i mean by that is, federal agencies receive a lot of information and a lot of complaints directly from our citizens. Sometimes citizens do not come to us but go directly to the federal agency. The feds are limited in terms of the size of scams but they often will look at. They may or may not get rid admitted but the fact is they have to make choices and they naturally look at the larger cases. It is perfectly understandable but sometimes when we have done this on occasion it is very helpful if, when our federal parties receive a complaint, and they have worked up, in part, because they are trying to figure out what theyve got, it turns out theyve got a violation of law, but it does not rise to the level for federal prosecution or consideration. It is very helpful if they will then presented to us, as prosecuting it, and we can prosecute those cases under state law. Weve done that with what you have the Regional Office before and makes us very happy because it gives us more cases on our pipeline and it would seem to make them very happy. They have places theyve already invested time and effort in the dont rise to the level routinely a federal prosecution, and the second and final thing i was just for consideration the chairmans, there is one thing pending in the senate, which i think is very helpful inventing our capacity on this. It is senate bill, i know you are cosponsor, and others in the subcommittee have talked about. It it has been pending for several years now and i am hopeful that it has a path, perhaps, as part of the next stimulus bill if there is one but it would remove what i think is an arbitrary barrier in federal law that currently prohibits states from using our medicaid fraud for all units to detect, investigate, or prosecute medicaid patient abuse, patient abuse, unless that abuse occurs in institutional setting. So, from a covid standpoint, ive got somebody that i discover somehow is ripping off a beneficiary and Home Health Care center, trying to sell them bogus cures or whatever it may be, for covid, i currently am not allowed to use our medicaid for an employee asked, that federally funded subject to federal limitation parts, but ive got to find a way to deal up with it with some other resources. I cant figure what it is, but it would be very helpful, if that limitation were lifted swiftly because it would allow us to deploy already existing and in place investigation and prosecution resources to address non institutional , so thank, you mister chairman, for the opportunity and the information. General, thank you for your efforts that are in our home state to protect consumers. Thank you for your testimony today, and thank you for your specific suggestions about federal actions. Now, we turn to our next witness, mr. Andrew smith. He is the director of the bureau of federal tech in the consumer trade commission. Thank you. Chairman moran, Ranking Members blumenthal and members of the subcommittee, i am andrew smith, the director of the federal trade commissions bureau of Consumer Protection. My written statement represents the views of the commission, but this Opening Statement represents my views alone, and not necessarily accused the commission, or any individual commissioner. I am pleased to appear before you today to discuss protecting americans on covid19 scams, despite the disruption of the coronavirus pandemic, the bureau of Consumer Protection has managed to be aggressive, creative and productive, particularly with respect to scams, taking advantage of covid19 during confusion many of our specific initiatives in the last four months are outlined in my written testimony, but what is truly remarkable to me is how the entire bureau of Consumer Protection has risen to the occasion and made a major contribution to the fight against covid scams. Each of our eight divisions and eight Regional Offices is pulling its weight in the fight against covid scams, while also keeping up with its existing load of projects and cases. Our Advertising Practices Division is taking action against fake cures. Our marketing Practices Division is taking on robocalls and spurious Business Opportunities for our Privacy Division is focused on video conferencing, Contact Tracing, and issues around ed tech and distance learning. Our financial Practices Division is fighting Small Business financing fraud. Our Enforcement Division is taking on fulfillment scams that promise ppe to consumers but that never deliver. Our Consumer Response Division is collecting and analyzing complaint dated for public consumption, as well as improved Law Enforcement targeting. Our Litigation Support division is assisting with innovative ways to continue to do our work remotely, including remote current appearances, testimony, a document production. Our division of business and Consumer Education has produced dozens of infographics, shareable, videos, and other materials, in vibrant languages, on a wide range of covid scams and has also been conducting extensive outreach directly and through our partners in the media advocacy organizations and trade groups and our Regional Offices are doing all of the above, actively engaged in warning letters, investigations, mitigation and tea araoz. Outreach, outreach, and more outreach. In fact, just in the car on the way up here, i saw, i got an email about a joint letter at our Chicago Office which was done with the Missouri Attorney general warning letter to two separate companies, warning them against making fake claims for covid relief in connection with hearing aids, just within the last hour, we get that. None of this, none of the work that we are doing, however would be possible with the of the cooperation coordination with our federal state and local partners as well as the private sector. Working with fda, we sent dozens of warning letters to dietary supplement sellers. Weve been working with the federal Communications Commission and the u. S. Telecome in the seat three trace back group to halt local robocallers, working with sba, we have taken action against Companies Offering ppp financing to Small Businesses with that fda approval. Some of our Enforcement Actions have been in conjunction with doj or other criminal authorities, who executed search warrants at the same time as we go to court for an emergency hero. State regulars born and eighties are joining us and warning letters, taking action against recipients of our ftc warning letters. Former regulators and criminal authorities in india, singapore, canada and sweden have worked with us on investigations and enforcement. Some of the private partners have been just as remarkable. I mentioned the u. S. Telecoms robocall traced back initiative which has been invaluable in leading us to the source of Illegal Robocalls. Our partnerships with bbes and aarp have enabled us to reach millions of consumer with our message. In fact, one aarp presentation early in pandemic was reviewed by more than 850,000 people. We are always open to new ideas about how to better educate and protect consumers from these pernicious covid related scams and i look forward to todays conversation on this topic. Thank you for the opportunity to testify. I welcome your questions. Thank you very much mister smith. Now, mr. Stew, founder and chief executive officer. Mister chairman and members of the committee, thank you for the opportunity to provide live perspective as Congress Works towards developing solutions for businesses and governments combatting covid19 related scams. What more can be done to protect the public. My name is stu stouwerman. I am the founder and ceo of knowb4 ink. We are headquartered in tampa bay, florida with head offices in europe, south america, australia and southeast asia. This knowb4 is the provider of the Worlds Largest Security Training and simulated fiction platform. Our services are used by more than 33,000 organizations with 24 million employees around the globe. For the last 30 years, i have served as an entrepreneur and security expert in the i. T. Industry. I founded an anti malware company, which got multiple in 500 awards, which was acquired in 2010. As i was running that company, i realized that the Human Element of security was being seriously neglected. So i decided to help organizations to manage the ongoing problem of cyber, social engineering tactics and that is why i founded knowb4, to provide new schools Security Awareness training. More than 33,000 organizations and a variety of industries, including a highly regulated industries, such as health care, finance, industry government and insurance have mobilized their users as their last line of defense, using knowb4. Our primary objective is to enable employees and they are also, of course, consumers, to make smarter security decisions by training them to become a human fire wall. A defenses against social engineering attacks, which are responsible for upwards of 90 of data breaches. The shutdowns and the economic turmoil of the coronavirus pandemic have expanded to cyberattack surface, making it even easier for our hackers and scammers to do their nefarious asks. If we do not focus on the Human Element, consumers and employees, we ignore a crucial part of cybersecurity. So, since the beginning of this year, covid19 has completely reshaped the cyber threat landscape. For instance, well over 192 coronavirus related fishing attacks have occurred per week over the last month. No one is immune to being scammed and different types of scams from different sets of consumers. Scams go to Great Lengths to make their attacks as convincing as possible and many of these scams have very few visible sites that can tip off the recipients. The best way to find scammers is to, of course, prevent, educate consumers and employees with a combination of security streaming and frequent social engineering testing. Here is one example. New data from security vendor trip wire highlights a shift to Remote Working as changed the face of cybersecurity for both current and future work climates. According to their report, 94 of organizations are more concerned about cybersecurity then before covid19. They should be the fact is, people are clicking on simulated covid19 fiction text at high rates. Coronavirus themed emails are ranted. The emphasis in cybersecurity has traditionally been on ongoing software, however, it cannot solely rely on that. This strategy cannot catch everything, nor does it address the need for human fire wall. So, to end off, any support from congress with direct Government Agencies to implement ongoing security registering, more than just annual training that is typically in place and include frequent social engineering testing, would be greatly beneficial as we Work Together to bridge the gap in cybersecurity and protect american networks. So, thank you for the opportunity to share knowb4s perspective on cybersecurity and our industries unique ability to protect american citizens from rising covid19 related social engineering scams. We are grateful to chairman miranda and members of the committee for the time and effort you are all putting into this important matter of national security. Knowb4 he has committed to being a helpful partner Going Forward as we all work to serve the best interest of the public. Thank you. Thank you very much. From now miss laura mclaren, policy director for science and public interest, welcome. Thank you chairman moran and Ranking Member blumenthal for the honor of testifying today on this critical topic. I am policy director for center for science of the public interest. And nearly 50 year Old Organization that works to improve the health of the food supply and the interest of consumers. Americans are facing an unprecedented challenge in keeping themselves and their families safe during a pandemic. Public Health Officials emphasize that we all need to socially distance, wear a mask and wash our hands. Understandably, though, many people are looking for more to protect themselves. Those without scruples are actively exploiting consumer fear and anxiety. In truth, our unregulated marketplace for Dietary Supplements is a risky place under any conditions. For the past three years, we have been collecting evidence of scams concerning supplements and sending into the food and Drug Administration in the federal trade commission. These included many misleading claims we found on products marketed to vulnerable consumers suffering from opioid and tobacco addictions, as well as supplements making false claims on female fertility. It is far too tempting to think that a powder or a supplement can help us with a global pandemic. When the coronavirus appeared, we knew the hug stirs would not be far behind. First, we wrote the fda and ftc about televangelists, jim baker, whom we heard senator blumenthal describe. That show featured experts advancing the claim that products that sold containing colored all silver can cure coronavirus, quote, within 12 hours. The commentators on the same show had previously claimed that the same product cures, quote, all venereal is eases as well as hiv. Yet, there is no evidence that silver supplements prevent or treat any condition, according to the National Institutes of health. Although experts featured on the show said it can be consumed aliens lurks and was safe for babies. Cloyed all silver in large enough amounts can be dangerous to kidneys and other organs. It can also call cause permanent bluish gray discoloration of a persons organs. Also in june, we sent another request to the fda asking for enforcements on supplements the market is as and violent viral claims. Any supplement that has Antiviral Properties is considered illegal to the fda because only drugs can territory treat disease. Our markets down on products and amazon in late may found 46 Dietary Supplements making illegal anti viral claims. So we wrote the agencies and the amazon directly for removal. Unfortunately, establishment search of amazon performed on june 29th found that 26 of those supplements are still making anti viral claims on their own websites on amazon or other online stores. We continue to be on the lookout for scams related to covid claims. Just this morning, we sent public letters to the fda and ftc asking for the agencies to act to address dozens of misleading claims made about 23 supplements and medical devices by dr. Joseph mccullough. A wellknown purveyor of Dietary Supplements. In the pandemic, such untruths pose a clear and urgent danger. Consumers may develop a false sense of security and failed to practice social distancing or use masks, endangering themselves and everyone around them. They also may harm themselves by taking dangerous doses of supplements or failed to seek and effective medical treatment, believing instead in the promises of the fantasies. Its even worse than that. On a recent episode of his podcast, he advises to take guam the immunity boosting cells and they are contracted covid19. This will allegedly reduce our symptoms. Dietary supplements are, in fact, among the most poorly regulated Consumer Products. Congress through the Dietary Supplement Health and education act of 1984 established a barebone system of oversight that was designed to be weak. Today, particularly given the tremendous expansion of products used by consumers over the past 26 years, that system is failing. Both the fda and the ftc need more funding personnel and resources for enforcement. The fda, in particular, needs far better tools, including a mandatory product registration requirement to make the marketplace transparent for regulators and consumers. In addition, congress should authorize state attorney general to enforce relevant laws related to Dietary Supplements to improve their accountability and reach. The fda should be given heightened regulatory powers for specific categories of supplements that are known to pose a high risk to consumers, because they are marketed to vulnerable groups or are commonly tainted with drugs with synthetic ingredients. We do appreciate the opportunity to work with lawmakers on a vision for reform insulin oversight, to ensure that consumers are protected from fraud. It should not take a pandemic to motivate solutions to require that supplements, like any Consumer Product or truthfully labeled and marketed and that consumers are not misled in ways that risk their own and Public Health. Thank you and im happy to answer any questions. Thank you very much for your presence and testimony. Let me begin with a question, initially for mr. Smith. On april the 14th, senator blumenthal and i sent a letter to ftc chairman asking if the ftc currently had the authority under section five authority to enforce against unfair deceptive acts or practices, to deal with the issue of price gouging. On may the 19th, the chairman responded indicating there are significant legal challenges under our current statutory before we address price gouging applications. They rely heavily on the doj. State attorney generals as well to enforce such activities. Mr. Smith, historically the ftc has not used its section five authority related to those unfair and deceptive acts or practices to take Enforcement Actions related to price gouging. If congress were to legislate to explicitly direct the ftc to address price gouging, which you have recommendations for this subcommittee as to what that should look like . Right. So, you are right. Historically, the commission, there have been these supplies shocks following natural disasters and the like. The commission has been asked, could the Unfairness Authority fit the increased crisis that follow the supply shocks . The commission has historically been reluctant to use its authority in that way. I would note that, at least 35 other states have authority as well, similar to the fairness authority, but ive seen fit to an act price gouging statues, including kansas, general schmidt and his written remarks talked about this and the state of connecticut and a lot of other states. So, we think that a special law would be helpful here and, with respect to that law, what we have and we have worked with some of your offices on this, what we would recommend is that the crisis to which a statute applies be clearly defined and that if you truly national in scope, not one of these regional or local supply shocks that might call upon the national, federal trade commission to address those issues. There would be a narrowly defined, or at least clearly defined a National Crisis that the statute applies to. That it be nice if it were to define the types of materials or products or services that would be covered, for example ppe in the current crisis. That there be a clearly defined trigger, such as an increase in price over a precrisis index. So 25 increase in price, for example is what some of the state laws account for. And also, that there would be some acknowledgment that increased costs might be illegitimate. So, for example, there is a disruption in the supply chain and a merchant needs to find alternative supplies and it results in increase costs, we do not want to discourage that. We want to encourage new entrance to the marketplace. We want to, we do not want to discourage people from providing critical goods and services, simply because their costs have increased. So i think that those three or four items that have outlined, would be really helpful in any National Price gouging administration. You mentioned the state of kansas. Let me turn to the attorney general. General schmidt, we do have a law in place, as you indicated and mr. Smith indicated, tell me if you would describe your offices efforts in enforcing that law. That state law. Mister chairman, we do. After the 9 11 attacks, the state of kansas and acted what is now known as our profiteering disaster statute, which is our anti price gouging law. The way to structure is that it is in effect only during a time and in the place, in the geographical area of a declared state of emergency, other by our governor or by the president. Those are the two triggers that caused a law to entered force. The standard is any unjustified increase of pricing as compared with a price for a particular product or service on the day before the emergency was declared. On justify, there is a presumption that something was unjustified if there is a 25 or more increase. Although as it passes through cost, mr. Smith suggested, that negates the presumption and also operates as a defense. It applies to what the statute calls necessary goods and services, which are further defined as essential things that consumers are likely to need more of as a result of the particular emergency. That is the structure of our statute. To your question about our efforts to enforce it, it has been enforced and in effect in kansas longer and more widespread way than ever before during the Covid Response because of the nature of the emergency. We have approached this, we received, last i look, somewhere around 400 complaints from kansas citizens alleging a violation of that issue. We have investigated them all. We are investigating them all. Generally speaking, we have approached this through education, with our engagement with the supplier, with the retailer. A lot of times we discovered they did not know the law exists or is in effect. Other times, its plain on its face that there is some passing through costs that were raised with them, so they can go up the supply chain to figure out if there is anything unlawful happening. So, we have tried to approach it in that way. We have not at this point had to actually file an enforcement action. We have had a number of suppliers change their behavior once we have engaged with them, however. Thank you. I now turn to a former state attorney, Ranking Member senator blumenthal. I want to welcome you, particularly attorney general schmidt and thank you for the good work you are doing out there. I think you provide evidence as to one of the recommendations that this maccleery makes about the need for authority on the part of state attorney general to enforce federal laws. Let me ask, if i may, mr. Smith, what you think about giving state attorney generals broader authority. So, generally, im speaking just for myself, not for the commissioner or any individual commissioner. A lot of the Consumer Protection laws in which that we currently enforce have authority for state attorney general to enforce them as well. I think that is terrific, honestly. It is a big help for us. I think that if the state attorneys general are willing to share some of the load with respect to enforcement, we are delighted for that. I would say that typically, when there is a provision permitted, state attorney general enforcement, that the federal trade commissioner or whoever the Relevant Authority may be, have an opportunity one, that it receives notice of the case before being filed that it have an opportunity to intervene. With no safeguards, i think that traditionally, we at the federal trade commission have been in favor of the enforcement of the federal statutes that we enforce. This maccleery, i want to thank you for the work that your organization does for the center of science in the public interest. It really does magnificent research and policy formulation and i think what you have done on these fake and phony cures is show, not only that there is a financial costs but that there is also serious adverse side effects. I do not mean only the potential physical dangers, medically, i mean the sense of false security. It may cause complacency or failure to practice good preventive action, like Wearing Masks and physical distancing. And the kinds of dangers they pose when people talk about them, exaggerating their friends and neighbors, so i think a special responsibility on the part of everyone who is involved in promoting these products and i know your testimony that you make reference to amazon, ebay, facebook at sea and im quoting, must do a better, must do a far better job of removing misleading claims and products. Should they be held accountable . Yes. I think there has been a perception that the Third Party Platforms are just a marketplace without a stake in the game. Increasingly, we see that is not the right understanding of the model they profit from having all the sellers on their platform no is a tremendous amount about the marketplace and the behavior of buyers and sellers which often produced around products in the case of amazon are walmart which has a big online placement and sell them directly to sellers and they should be asked to help patrol the viability of claims on marketplaces that they are managing the anti viral complaint that we have filed her be very disappointing to see their lack of response on amazon to those. They are doing some coordination, is my understanding, from the news reports with the department of Homeland Security around covid products are specifically marketed to treat or prevent covid which is commendable and what we would like to do is see more of that shear in portsmouth model. Amazon has found being found liable in court for selling food issued in recalled after they were identified by the cdc is having a food borne pathogen. In addition, we are working with the family that lost their son for unwashed poppy seed tea, which is no bite, and was sold through amazon invoke amounts to be used for this purpose and it was clear comments that these were used for drug purposes so, those are the kinds of things that we see and we think there could be a much more compelling partnership between the platforms in the government to deal with fraud and abuse. It could be much more aggressive. And that they have an obligation to be more aggressive . If you search for covid cure on amazon, you still find sponsored banners for probiotics and product listings for supplements arent they complicit with other marketplaces, and have you been satisfied with the response . I think they have a tricky job controlling the algorithm which might in part be learning from Consumer Practices in realtime on their side, but i dont know how much i dont know enough about how the amazon Search Engine works because its not clear from looking over the site protocols, so, that would be an area of investigation for the agencies in consultation with a company. I do, think where we have flagged items like the antiviral planes which are, per se, illegal claims, according to the food and Drug Administration. They have a clear obligation to act, and there are also supplements tinted with prescription drugs that have been sold through amazon, and those need to be expeditiously removed, as soon as the platforms are informed that they are tainted. Thank, you my first. Right now there will be a second round mister chairman, expired, and i yield back. You can ask more questions. We follow our usual parks are not for me the Committee Members whether there will be a second round or not. We now turn to the full Committee Chair who is certainly entitled to a second round. Senator wicker, thank you for joining us. Well, thank you for joining us, senator moran. I appreciate the work that you and senator blumenthal are doing on this issue. I have a prepared statement that i will ask be included in the record following the Opening Statement. Without objection. Thank you very much, and i very much enjoyed the testimony of, you know, mr. Smith, we are looking right now in the house and senate at covid19 response and this is a Good Opportunity for i think us to see if you need anything in that bill. Miss maclean says that the ftc does not have enough funding or enforcement to go after the scanners scammers. So, we have not asked for any additional fulltime equivalence so, one thing i would like for you to discuss is, you have enough resources to help attacks that we are talking about today, and then with regard to following up on senator blumenthals question about state attorneys general, maybe that is a way for us maybe to spread some of the responsibility that the 50 attorneys generals would be involved with. When you have been able to farright work to attorneys general, mr. Smith, does that involve a state enforcement mechanism only, or are there damages . Do you ever outsource that to the trial in enforcing anything that the ftc does . So, if you could comment on that, i would appreciate it. Okay, thank you. Okay, so, i will be the resources first, at this, point we have identified in any costs they can cover. We do appreciate very much that the house Operation Committee has recommended for the commission in fy 2021. We also appreciate the extra resources that we got in fy 2020 and whatever resources we get, i will say that we have two very specific needs, the first is legislation to address our authority under section 13 be appealed to see at so, this is the proper position to be used to return money to consumers and for decades, courts across the country have said that we have authority to obtain equitable monetary relief under section 13 be. Very recently, court in the seventh circuit has questioned that and so this is the First Quarter degree dew, that sock, this is the greatest on the ftc side, and we expect the court to resolve that issue by the middle of 2021, but adverse ruling from the Supreme Court would mean that the ftc would lose the ability to get any amount of humanitarian relief under section 13 the, as we have been doing for decades. Because the stakes are so high, youre asking congress to ask now to make sure the ftc can continue returning matter to the consumers. The second assure we couldnt use and help is reauthorization of the safe web act. Safe web act was last reauthorized in 2012. Since it will sunset on september 30 of this year. It extends the ftcs authority on unfair and deceptive practices to conduct that has a reasonably foreseeable effect on u. S. Consumers, or that involves material conduct in the u. S. This allows us to address cross border fried, which is a real problem. This 2015, weve had 310,000 complaints from u. S. Consumers against foreign businesses. The other thing that safe web allows us to do is mournfully exchange confidential investigative information with our foreign counterpart. You have relied on safe web to respond to 162 information sharing requests from 40 enforcement agencies in 17 Foreign Countries it is been a critically important tool and a lot of the covid19 fraud that we see is also coming from overseas. So, two things that we could really use help with, 13 be and safe web. With respect to state agencies, we routinely have the task force, we participating task, force regular meetings with our counterparts. They will frequently be coplaintiffs in our cases, particular charity cases where they have better authority than we do to return money to consumers. We sometimes refer cases to them, they sometimes refer cases to us. We have one of our biggest recent cases was our 170 Million Dollar settlement, and google and youtube that was a case that we did with a new York Attorney general. We have not find anything at the trial bar, and our state partners, as well as far as i know, youve been dealing with assistant attorneys general. We have not been dealing with private lawyers who are hired by the attorney general in mind for. And my experience, that has been what we have seen. I have not been participating in a lot of these task forces. That is generally done by the folks in our Regional Offices so, i cant say for sure about outsourcing to a trial bar but i have never heard of it. Mister chairman. We are way over time. I would note that you and senator thune, senator blackmon and i and senator fisher have a data privacy bill that would deal with the specific issue with covid19 and perhaps on the record our witnesses might tell us if theyve had a chance to look at that, and if they want to go ahead on the record enthusiastically endorsed this great piece of legislation. Thank, you mister chairman. Mister chairman, would you like the witnesses to respond to that question now . I will be glad to i just want to be sure will have time if they can respond within your constraints. Very quickly, direction it . So. Based on the sponsors, i have no doubt it is actual legislation, but im not a chance to repeat it. Probably get your funding half of the members of United States senate, senator blumenthal ani continue our efforts in this regard. Mr. Smith . I cant speak to the commission simply, we believe that contact racing legislation would be a big help we are able to traces Contact Tracing after theyre gonna work in the App Developers need to know the rules of the road so, having Legislation Commission has testified in favor broad privacy legislation but that thrilling, contact racing, legislation. Where is this within my domain . Ive not been able to look at specifically legislation so i cant afford an opinion. The cover part of the problem if you dont. If you take this. We would like to see federal slash National Cybersecurity standards,. I think we can prevent a multitude of these types of scams in a variety of ways, but, maybe we can come back to that, we have to give your issue a little later. We will certainly be pleased to review the bill but i have no logistical for sunday to privacy. I regret to say, i do have more information on the funding and resources question. I will try to make certain that each of you have an opportunity to respond at the end of the hearing to kind of catch up with anything that you would like to add your testimony. Let me turn now to senator klobuchar who has been patiently waiting. Thank you very much, mister chairman. Thank you to senator blumenthal as well for holding this really important hearing today. I think we would all know that we are, yes, in a Public Health crisis and also an academic crisis and when that happens there are people who pray on peoples vulnerabilities. While scammers have used, as you pointed out, at the beginning of your remarks, Miranda Blumenthal we have used the coronavirus to exploit americans furious, the impacts of the scam, seniors, have been particularly disturbing, our reports from the eight or ten people in this country have lost a lot to coronavirus. The seniors who also lose an estimated 3 Million Dollars annually to financial scams in a normal time have been targeted for additional scams. Just last week in my state, we had a skater who pretend to be the trial of the elderly minnesota i can miss that person 25,000 dollars to an address in connecticut, not to pick out senator blumenthal but yes, connecticut. That is why senator murray and i introduced the protecting seniors from emergency scams act in may to help prevent scammers from taking advantage of seniors during the pandemic and, youve also called on the ftc to protect seniors view for some contact reasons games of all discuss and educate seniors on how to protect themselves. So i think i would start with miss mick leery. Could you talk about how it is critical for seniors no caregivers to have access to resources from Law Enforcement, adult protective agencies to help combat these coronavirus scams and also, with the rise of Online Shopping fraud in which Consumer Products are ordered online, what is the ftc doing to protect seniors from these type of scams . Thank you so much, senator. I so appreciate the care that you and the chairman are showing for this very vulnerable population we know that seniors, for example, in our world, our very heavy users of Dietary Supplements. 82 of people a 65 to 50, for an 80 of those 65 and older take vitamins and supplements, but we would be very concerned that the supplements actually deliver on the benefits on the label. We sued cbs several years ago for producing a supplement that was a cbs label that promise to have masculinity generation ingredients in it that were effective and in fact black those ingredients even though we sold next to product that had the appropriate ingredient. So, seniors are particularly vulnerable to supplement scams, in the way that we have highlighted. They also tend to be vulnerable to the kinds of marketing scams in the supply marketplace that is a buyback guarantees, money back promises, and phishing scams related to this kind of product marketing. Thats a real concern to us and to help make the more vulnerable to gaps in the settlements or the use of the supplements a substitution for valley medical treatment. It made a surprise visit to a doctor that was actually needed. Yes, thank you. Mr. Smith, i will direct this one toward you think is the ftc plan to take additional measure measures to better protect seniors, a system, if they are a victim of a Contact Tracing scam, and i know the ftc is coordinating with the doj and if it has to warn consumers, can you highlight the key measures the ftc is taking as part of this coordination . Sure. Over americans been a priority of ours for a long time. You know, interestingly, our Research Shows that over americans are not necessarily victimized at a higher rate than younger people. In fact, they are victimized at a somewhat lower rate but they suffer more losses when they do suffer monetary loss and some of that has to do with scams like the grandparents gambit senator klobuchar outline, which is really pernicious and can lead to big losses and so our efforts, in addition to our Law Enforcement efforts, our efforts are focused on educating consumers, particularly to these scams, and one of our most effective tools has been a campaign called pass it on, and what pass it on does, it is a series of articles, presentations, bookmarks, activities, videos, and what it does is, it educates, it is targeted at Older Americans and and says, look, you need to get this information to your friend, to your neighbor, to your Family Member you need to educate them about this scam and it allows older people to capitalize on their Life Experience and their wisdom it and educating others and of course, in educating others, they are also educating themselves so, we have distributed millions of pieces of disinformation and we have found that it is effective but youre absolutely right, there are always new scams, particularly those involving technology, tech support, contact racing, which they are going to find, the scammers were fined will find Fertile Ground with older consumers. Okay, thank you. Mr. Schmidt, one last question. In your testimony, you know the legislation enacted in kansas to protect the privacy of consumers personal data. Do you think that providing strong protection for consumers personal data is helpful in making these Contract Tracing apps more effective . What more do you think we should be doing federally on the personal data . A number of us have been trying to work on privacy issues, said under caldwell outlined as well when it comes to personal data. This goes way beyond the pandemic. I think it has only put a magnifying glass on this issue with tech companies. What do you think would be helpful . The commission has testified in favor of big security legislation that would include Civil Penalty Authority, a pa making authority an expanded jurisdiction for the ftc over uncommon carriers and nonprofits. A majority of commissioners up testified for something similar with respect to privately legislation. Speaking just for myself, i think that privacy legislation would be really helpful now to, both tell App Developers and others who may be working on Contract Tracing issues, what them know what the rules of the road, or what to protect and what they can collect. What the contours of the identified an aggregated data or for example. Also, would build confidence by consumers. Consumers need to be confident in these apps if theyre going to use them if they are effective. Thats for sure. Mr. Schmidt, can you also answer that question . Thank you. You know, we obviously followed with the interests with many of your discussion and debates and washington on broader privacy issues and, of course, from a state standpoint, we always have a generalized concern about reaction in attention between state authority on the one hand and the benefits of the national standard. Setting that bigger issue aside that i assume would also be a challenge for you at this point, if you are trying to do something on this federally, kansas did, our legislator was in special session in june. It did at that point enact a suggestion of our office, what we call the Contact Tracing privacy act at the state level. It is fairly characterized as stopgap legislation. Its designed to fill the immediate need while we have perhaps a more thoughtful review of what the law should look like with respect to Contact Tracing. It has multiple parts, some of which are not relevant to your question, but essentially, it requires that contract, Contact Tracing was largely unregulated, even though it has deep roots and is critically important. In kansas, it was not rules of the road, but it was operated the way Public Health officials chose to operated. Obviously, the scale of the Covid Response has brought a lot more people into that business and, therefore, invited discussion about what the rules ought to be. Our new statute does things, such as requiring that they specify participation and Contact Tracing, whether its electronic or oldfashioned way with pencil and pander knocking on the door. It is voluntary. We think that is important because it reduces some of the pushback that some citizens have when the government tells them they must provide information under some sort of penalty. Our statute, again, a stopgap actually prohibits the use of cell phone location information, so most of the apps for Contact Tracing, our Public Health department at the state level said they were not interested in doing that at this point. They are advised but the whole thing on hold until we get a more thoughtful review of what exactly the rules are to be on that again, in spirit of trying to reassure folks that it is okay to participate without having to wonder what happens to your information. We also, in that statute, ensure that there cannot be what our cold bureaucratic missionary. We ensure that the data, lawfully inappropriately collected for Contact Tracing for covid, when it is no longer needed for that Contact Tracing purpose, must be safely and securely destroyed. Theres obviously going to be tremendous value on this data, for me the reasons we have never even thought about. It may be beneficial. Again, folks may be discouraged from participating if they think it is an open door to what their information might be used for something. That has been our approach. Okay, thank you. Thank you senator moran. Now senator fisher. Thank you mister chairman. I appreciate you calling this hearing today. American consumers have had to become suspicious of all types of crud that comes to their emails, their mailboxes and sometimes their front doors. On top of this, the coronavirus pandemic has been a convergent of all of these scams. Its increasingly difficult to determine what is real and what isnt. We saw this recently in my state of nebraska when consumers were confused after they received their ballot stimulus money from the act in accordance with prepaid debit cards with u. S. Treasury. Many of them thought it was a scam, so they threw them away. Thankfully, the treasury has been responsive on solving these issues. We have also seen some skepticism from consumers contacted from Government Agencies, for Contact Tracing effort. Mr. Smith, in light of these Going Forward, what can we do to improve trusted channels between federal government to . Well, what we are doing at the ftcs educating consumers about Contact Tracing and alike. So that they can be, because we want consumers to engage with contact tracers. So, we do not want them simply to be afraid and to shut down when they get that email. So, our message is, do not be in free to engage with contact tracers, but the first thing is do not click any link in the text message, just like general schmidt said. Second, a contract racer, a legitimate contact racer will never ask you for money, for your bank account, for your Social Security number or for your immigration status. In addition, on our website, ftc. Gov slash coronavirus slash scams, we have Contact Information for all the different state boards of health and other information about Contact Tracing to educate consumers about legitimate Contact Tracing. You are absolutely right that we need to build trust. Consumers need to be able to trust these apps if they are going to work in the way that they are intended to work. What are you looking at for best practices there . Are you trying to reach out to State Government more . To being able to Work Together so that we can build that Consumer Confidence . Well, we have issued a great deal of business guidance, including business guidance for contact tracers, which are abdel uppers, where we have been counseling App Developers to build, to employ privacy and security by design at the beginning of the active element process, not simply build it in at the end. That they include privacy protective design features for their apps, such as decentralization of data, so the data lives on individual devices rather than in one centralized database that they use anonymous data, or even better, aggregated data. So thinking heat maps for coronavirus. For these Contact Tracing apps, they use the data only for the stated purposes, just like general summit said. If you are collecting it for Public Health, use it for that and nothing else. You delete the data when you are done. I think those preexisting relationships have been really helpful in allowing us to simply apply how we normally Work Together in this context. I feel very good about that. As i suggested in my opening, i think there might be some room to maybe get a more institutional the way to ensure that relationships that caused cases to flow, federal to state or state to federal, for example between the investigation and prosecution stage, that that may happen even when theres changes in personnel, because so much has become based on those personal relationships. You have to reinvent the wheel. Beyond that, i have not heard about it. Thank you mister chairman. Thank you senator fisher. We are pleased to have Ranking Member of the full committee here, senator cantwell. Thank you chairman moran and thank you to my colleague, senator blumenthal for being the vice chair of the committee for all of your hard work on this issue. I think what i will try to do is talk about some very broad issues. I think my colleagues have covered a lot of territory. Let me just thank you for mentioning, my colleague senator klobuchar, did a security issue, we really feel that Data Security is and should be included so thank you for endorsing that concept. The Data Security really does need attention, along with privacy legislation overall, so thank you for that. On this issue of the usual ftc approach, which is a first time warning, to the witnesses agree that the ftc needs a first time Civil Penalty Authority when it comes to some of these covid deceptive information and statements given the severity of the problem . I do not know, miss maccleery, i do not know what you have to say, or whether mr. Smith wants to comment on that. So, i think that the warning tool has limitations. There are a number of unscrupulous actors in the marketplace that may disregard warning letters and its enormously inefficient for the fda or the ftc to have to track and go after bad actors multiple times. We have seen a pattern, even in supplements tainted with drugs, like amphetamines, they will issue a warning letter and then the company will come back with a slightly tweaked product and keep selling into the same marketplace. I think for supplements in particular, you have a small number of bad actors and a warning letter authority is just insufficient to get their attention. Well, definitely i agree. It could cause fatalities. It seems like a warning letter may not be Strong Enough given the complexity of this environment we are in and giving the ftc a stronger tool. Right, so we have a stronger tool, we can go to court. With all due respect to everyone in the companies that we sent a warning letter to, we can go to federal court or in front of our Administrative Law judge and we can get an injunction. We have chores the warning letter route because what we have found, particularly with respect to the fake yours, what we have found is that the warning letters are astonishingly effective. In 48 hours, we can get bad claims taken down. Where we cant, we follow up with Law Enforcement, either in a federal court or in front of our Administrative Law judges. What about flexibility . I think what you are advocating is another path like with the obey a law where we get civil penalty on our first bite at the apple. With respect to that, that is a better question for the commission. I would be getting pretty far out over my skis. What about our definition of price gouging . I do not know if, i mean this Unfairness Authority, that is what we, in washington prevent unfair and deceptive practices, pretty similar to where you guys are. It is quite broad. So, do we need to do more on the finding, defining the price gouging standard . I think yes, it would be helpful to have a price gouging statute at congress. If they wanted us to address price gouging specifically, it would be really helpful to have a statute they give specific authority and laid out specific guidelines for basically how high is too high. So, 35 states which have the same ftc act authority that we do, you know they have the unfair deceptive acts or practices authority, they have nonetheless seem wanted to impact the unfair price statue. That would be, if you want to address price gouging, a statute would be a big help. We have one for you, so we will get that. Right. I mean, we have been involved in establishing a standard for you, also on manipulation and we thought that was quite helpful and very helpful to the sea of to see and very helpful for the ferc. We think clarity here is our friend and we think just like with the opioid law, if people can get around, it they will. The stronger deterrent that we can have on the books, the better in my opinion. One last question. I was going to ask about, lets see. What else do we need to do on some of these Large Organizations that have taken advantage of states on their paychecks and the programs for unemployment . So are you talking about Large Businesses that have obtained, for example, Paycheck Protection Program loans . Im talking more about the abuse of the system of people signing up and getting rings of people who have signed up to get, in the state of washington, we have had employment checks given two rings of, yeah. So i would say, generals met from kansas may have some thoughts on that. From the ftcs perspective, when we see that, i think we send it to the irs, or to their Inspector General for, because that is real criminal theft. Right . From the government. So, it is not so much enough to see problem, but general schmidt may have additional thoughts, i do not know. I just want to know what we are doing to share that data in general. Obviously Identity Theft and these issues are something that the ftc, so i do not know how many states have draft this. Maybe general schmidt has something. If he wants to offer something. Senator, the only thing i might add that i mentioned, but did not dwell on earlier, with respect particularly to unemployment benefits, which may or may not be precisely what you are asking about, but similar. We have gotten a lot of complaints from folks alleging to broaden those benefit payments. Identity theft, creating false identities to claim payment. The way we have been handling those, because under kansas law, i do not have original criminal jurisdiction for that type of crime. So the way that we have been handling those is to refer them to our state department of labor, which handles unemployment programs and they, in turn then work with the federal counterparts whenever it is appropriate to do so. So, a little bit outside of kansas law authority. Thank you. Senator cantwell, thank you very much. Thank you mister chairman. I would like to thank the Ranking Member for having us here. Very interesting and it is interesting, i will just start on where senator cantwell left off and that is the fraud on unemployment compensation. I am from west virginia. We just had an instance where our unemployment basically said that somebody from the same ip address applied 1000 different ways to get a benefit with different names, or tweaking different names and im wondering, attorney general schmidt, you mentioned that this is an issue that has come up in kansas, but im wondering is it the magnitude in which we are seeing . And also, when Additional Resources but you need to come that something of this nature when a program is created this rapidly, but also, to the great benefit of senator, from the Vantage Point of the kansas turning General Office we have not seen that scoop but i could say we might not because i was just describing the senator cant, while we are not necessarily the face of the public response. You know, the only thing i might add is something we have talked a thought about it here because weve seen the reports in other states, trouble to be widespread and i dont think kansas is materially different, im just not seeing the data. But you know, there are other programs where there is a federal state partnership, as there is, now the unemployment payments help from the federal government to exist assist in extending benefit. Medicaid Program Comes to mind, and in some of those programs, congress has seen fit to create certain requirements for fraud policing by the state in order to participate in the program. For example, medicaid fraud units time mentioned earlier so, im not prepared to advocate that in the unemployment shorts context but it does seem to me a logical area to look, whether that model or programs that have shared funding would also make sense in the unemployment context. I mean, i think a lot of our systems are very overwhelmed and to try to determine where the fraud lies and how to detect it, i think its an issue. Im going to stick with you mister attorney general because i want to ask something that comes up in this committee all the time, that has to be related to scams and either our elderly and others and i appreciate senator klobuchar bringing up the scamming in the elderly that is an issue im very concerned about in all aspects. We do have a lack of broadband in rural areas, and what you find is the best way to really transmit to people who may not have Broadband Connectivity the possibility of false advertising or false claims or, you know, cures that are going to cure it all or prevent you from ever getting covid. How do you address that . So, we are the lead Consumer Protection agency for the state of the state level in kansas, and because of that, in ordinary, times we have a very robust Consumer Education and prevention program. We do it online, as you suggest. We also do a lot of in person visitations around the state, whether it is Nursing Homes, senior center, people and a large portion of their time after talking with kansas and if you avoid losing money in the first place, better for, you better for, us we can focus our enforcement on the back end. So, thats how we normally do it and have that implies lest now that we are all less mobile that disables one of our principal tools are reaching kansas which is, go where they are in person and talk with them. And so, we have struggled with that. We are doing more online. We recognize the limits, as you suggest, that is simply not gonna be effective because our consumers are not able to access that programming but nonetheless we think there is a significant number of kansas who we dont normally reach online. We couldnt reach online, technologically variable, so we are doing that now because it is better than not doing anything. So, we have pushed that but i have struggled very much with how we reach those pockets of individuals and state that we cant reach digitally because they dont have suitable internet access, and we cant reach them physically right now because of covid related restrictions and i dont have a good answer right now. I think that is a real problem right now, and i think that brings up a difficult question. I dont know if i had any more time. I have one question to mr. Smith. Weve seen a big increase in scams, obviously, and theyre heading towards the vulnerable populations but, what limitations to the ftc, this is because, yes, mr. Smith is the, what limitations of the ftc have . And ive created an act with senator gardner called the cease act which would increase penalties for false advertising. Im wondering if that would be helpful tool, if youre aware of it, and one additional tools you might need in the ftc to be able to break up these large advertising scams that we see. Right, so, i am familiar with the seas act, and i think we have provided some Technical Assistance at our offices and we were happy to continue working with your office on that and with respect to specific tools that we could use, i mentioned earlier, three authorizing the safe web act, i think senators marin and blumenthal have introduced, cosponsored a bill that would reauthorize the safe web act. That is critically important for our foreign Law Enforcement, and some of these covid scams are coming from outside of the country. The second thing is to clarify our authority under section 13 be of the ftc act so, for decades and decades, we had authority to obtain equitable monetary relief under section 13 be, and just recently, there has been one important, hurt the seventh Circuit Court of appeals that has called into question that authority that issue is now in front of the Supreme Court and will probably be resolved sometime next year about this time. But in the meantime, it would be great if congress could act to clarify our authority that we can get redress, restitution, as congress has that weve been able to get for the last 40 years. Thank you very much. Thank, you a vote has been called and i have been very lenient in a time. I will try to be less so. Senator youd, all it is now your turn. Thank you, chairman moran and Ranking Member blumenthal for calling this hearing on the important issue of protecting our constituents from covid19 scams. There is Unprecedented Demand for promise to protect against the transmission of coronavirus and the scramble to keep our families, workers, and customers safe has led to a surge in scams and fraud against consumers. The ftc has received over 136,000 reports of scams related to covid19, including 477 from new mexico, and people have reported losing nearly 90 Million Dollars on these and other covid related frauds. But is not just individual consumers that are risk here, there are increasing reports of companies misrepresenting themselves in contract with local state and federal agencies to procure ppe. And the contract was given to a former white house official to provide 1 million and 95 respirator masks for use in the Health Service serving the Navajo Nation that did not, make these mass did not meet the food and Drug Administration standards for use in Health Care Settings by health care providers. I want to address the issue of some substandard max substandard masks, thousands of masters from procured by a chants were determined to be substandard and up for medical use for an ihs hospital serving the nomination in arizona. I brought this up directly with the ihs director and told him this was absolutely unacceptable. Thankfully, the mascara never used but hhs and fda ought to be pretty savvy to consumers when it comes to Workplace Safety in the medical field. I will have a written question for our in writing, when it comes from the fda but much more clearly, what can this Administration Due to better protect workers both in the private sector and government, and do you support and osha osha merchants the standard . Absolutely. We are absolutely on the record of supporting oshas development of an emergency standard for workers a risk of developing covid. We are particularly worried about meatpacking workers were we have seen a large number of deaths even among inspectors but also workers and maybe something about the were conditions at the close proximity there that lead these to be hotspots. Workers really need these protections in order to maintain our food supply and keep going to work and we need to help the workforce so, we are backing the measures that have come out of the congress in several packages for an Emergency Temporary Standard for workers. In addition, we think there should be a concerted effort to of course develop masks standards for workers in the health care setting. We know there is some of that going on third, but some sort of concern attention by the fda to set standards, masks in the health care setting, happy to protect the patient from infection by the health care worker, not necessarily to protect the worker and so there needs to be a new and urgent effort to ensure that workers in the settings where they are dealing with patients, are also prot . 7 selling supplements to the public and the false claims that theyre making and were actively patrolling them, not just during a pandemic. In addition, not all are making an effort. We have looked across the number of the platforms, and not all of them are exclusive a tremendous promising to treat or prevent coronavirus, which is a problem. Thank, you mister chairman, knowing that a vote is on and we are pressed for time, i will submit the rest of my questions. I really believe there is a role for attorneys general to play here and i hope that our witnesses will answer that question on the record. I will yield back at this time. Thank you very much. Ever so, an utter udall. Thank you very much. Senator baldwins. He can you hear me . Yes maam. Can you see me, that is the other question. Yes, that we can. Okay, thank you. So, thank you mister chairman. This march, i introduced a bipartisan bill to incentivize states to provide compensation to elderly victims of financial fraud, abuse, and exploitation. I called it needs after learning the story of it is children her family, who wrote a letter to me asking that i work on legislation to help seniors get money back when it is stolen from them, especially when it is money earned over a lifetime of hard work. General schmidt, do you believe that elder financial fraud and abuse is under reported, and are you aware of any National Programs or efforts that would incentivize states to provide compensation or restitution these victims if they are unable to recover restitution from the vendors themselves. Senator, i absolutely believe that elder fraud and Financial Abuse are under reported. All that ive ever reviewed, there is a quarrel of how much, what order of magnitude that is in terms of your question about compensation, i am not aware of any program that provides compensation to elder victims of crime. There is of course the Crime Victims Compensation Program generally that im sure all of our states participate in. Generally speaking, that competition, as i recall, is restricted to certain categories of costs that are generally associated with Violent Crime as opposed to financial losses we make a priority inconsistent in our enforcement actors to put restitution first, and that usually is more important at the collection stage then at the position stage. Its principle, i dont know any particular proposals, but in principle i think will be a very good conversation to talk about whether there is some type of competition programs. Some have lost life savings as a result of scams. So, thank you for that. You did that her family were scammed out of more than 80,000 dollars by their longtime financial advisers, and of course they feel they will never get that money back there was stolen from them. But anitas family was able to uncover the fraud because he is asked for help and her son in law recognize that there was a problem when he was attempting to reconcile and balance her checkbook. General schmidt, in april, you lead when you write a letter to Senate Leadership in which you and other attorneys general noted that emergencies disaster situations invite abuse and exploitation of vulnerable and isolated populations. So, i want to know if you are concerned with seniors who are isolated, Family Member, his loved ones, caregivers during the pandemic and the support networks that they usually rely on this. So how does this separation from typical caregivers makes seniors more vulnerable and susceptible to such scams . Senator, this is one of the things that keep me up at night right now. We have focused tremendously, about the Kansas Attorney Generals Office and a couple of years ago when i was president of our National Association of the state of journeys general, we focused on elder abuse issues including Financial Abuse on a national basis, from the state standpoint so, it is a longstanding priority for us. I am very worried that seniors who may be physically isolated more narrowly, or have had their contact compete them in terms of health care or other home support, or who go to contact but in very discreet manner, to go to a Doctors Office visit, they perhaps go to their coffee clutch for lunch on every thursday and back, but they are now separated from those defective de facto Early Warning systems that can spot something out of the ordinary, and perhaps sound the alarm this has happened with individuals. I am very worried about that. I like to say, i dont mean to sound like a broken record, i highlighted it in my testimony and mentioned in my Opening Statement, but i really do believe that one step that congress could take swiftly, i believe without controversy, would be to include in some vehicles this year, perhaps the next bill, whatever is appropriate, the text of senate bill 23 79 which is the latest incarnation of legislation, working for several years. We begin the advocacy, it was actually at that time the attorney general, bipartisan, asking for this change in statute. Already funded, already trained, already skilled resources. Outside the next doors of the Nursing Homes and longterm care facilities, and reach exactly the type of isolated individuals in the Medicaid Program that youre talking about. So, thank you. Thank, you and mr. , chair i think my time has run out so i yield back. Thank you very much. Senator cinema has joined us as well. Senator cinema. Thank you mister chairman and to all of our witnesses today. We are using this pandemic summer using this pandemic as an opportunity to defraud our seniors. Arizona has reported many fraudulent escape to the ftc. And those are just the scans reported to the ftc. We know the actual damage is far greater. Scams are not just financial concern covid scams also endanger the health of the public who can be defrauded into believing that certain products can prevent or cure covid and of course there is no scientific basis to support these claims. Scammers have also distributed counterfeit personal protective equipment, all continue to work with partners on the federal, state and local levels to ensure we have adequate resources to prevent scams where they happen, ensure that we are returning funds, and punishing the scammers were stealing from our families. Before we move to questions, i want to thank senator capital for mentioning our bill to stop false advertising during this pandemic. Our bill increases civil and criminal penalties on scammers and we hope to find bipartisan support this legislation. My first question is for attorney general schmidt. Due to the coronavirus pandemic, scammers are using the fusion to steal personal information. Recently, our attorney general mark brennan binge warned about some common coronavirus scams. This includes trying to selfa Coronavirus Vaccine or unproven treatments to scare families and individuals. Scammers are also calling seniors and threatened cuff stimulus payment or Food Assistance if they do not share personal information. This criminal behavior not only hurts the direct victims but it also hurts legitimate charitable initiatives which are trying to help vulnerable communities respond to the virus. My question for you, attorney general, is how can policymakers help our constituents distinguish between scams and legitimate offers of assistance, and are there Additional Resources that states need in order to more effectively fight these new pandemic related scams. One senator, is such a difficult question because mixed messaging is the bane of effectiveness, and we normally are all on the page of, dont answer the phone, then respond to the inquiry, just hang up on the bad guys if you dont know them. Now we are in a position of saying, well, that is all true, and we would like you to respond, for example, with contact razors. That creates a difficult message to convey to vulnerable populations i dont know that i have a great answer. You when you talk with cans about the type of things you are saying, i do civil points, how do you separate the legit from the illegitimate . Number one, if he did not initiate, use a chance, in u. S. The arizona, new is the consumer, if you do not initiate the contact communication, then just assume it is not legit now, that gets me trouble with some legitimate businesses and Public Sector folks but from a Consumer Protection standpoint it is a simple, straightforward message if you want to which it and you think you need a widget, sitting at your breakfast table, initiate the contact with a cellar of widgets and now you at least know you are in contact with an and legitimate operator. That is 0. 1. Find the oldfashioned advice is still good. Youve visited, whether it is online, remotely, or in person or person, do business with those who already no interest so shop local and reputable retailers in retail space. Again, it is not perfect but those two principles are usually what i tell folks. Thank, you attorney general. I appreciate that. My next question is for mr. Smith. Its one of them is part of a fight against coronavirus, Many Organizations have experienced shortages of ppe, disinfectant and cleaning supplies, and other items that would help him create safety. As the virus continues to surge in places like arizona, our local businesses, schools, Nursing Homes, and Health Care Facilities are continuing to struggle to buy supplies from their usual interest inventors. What advice do you have for businesses and organizations that want to buy ppe or other coronavirus related supplies, and over to avoid fraudulent or counterfeit materials. Well, our efforts with respect to ppe have largely been focused on scams or fulfilments grams, or Companies Offering to sell ppe, and you order the ppe, next day delivery, and it is not delivered a next day in fact, it is delivered never so, the folks we are protecting our generally consumers and not businesses and they brought at least one enforcement action in that area. I would say that what we were enforcing their was our mail and telephone order rule, which requires that if you are not going to deliver on time, provide a notice in the opportunity for a full refund. With respect to this larger institutional purchases of ppe that youre talking about, we also been working for the department of justice which has been extraordinarily active under the defense production act, both in a lot of our ppe fulfillment issues have followed on their price gouging under the da. So, there are unscrupulous sellers or theyre selling counterfeit products, price gouging, taking advantage of institutions needs for these products, in this time of emergency and so a lot of that, i, think is being addressed by the criminal authorities in the particular the department of justice at the department of justice epa, rights gouging task force you. Thank you. Mister chairman, my time is expired but i want to thank you for holding this important hearing. I appreciate it. Senator sinema, thank you. Senator black man is joining us as well. Senator blackburn . Thank you so much, mister chairman, and i want to go to the issue of privacy. Mr. Smith, you mentioned this in your statement, and lets look at the issue of protecting that private information, and if that falls into the hands of scammers, what are you doing to make certain that people are not being scammed based on their information for this contact racing because what weve learned, when you look at the virtual space, whoever has that data claims possession of it, feels that they own the virtual use, they have access to this, and then begin to use that to follow people, and to share your information with outsiders so, general schmidt, lets talk to you, or start with you and then if each of you will add, i want to hear about what is being done to protect privacy, and to protect the following information via Contact Tracing. Senator. I appreciate the question. I dont mean to sound glib to anyone who is listening, but often in this space, i think of the old expression that the road to hell is paved with good intentions and i worry, in the contact racing space, because we have grown so rapidly into that Data Collection that perhaps we have not put in place the ordinary safeguards we would otherwise put in place if any entity, government or business that is collecting large french personal data and we have done it for a good purpose, to try to properly contain the spread of the virus. I have been sort of the contrary voice on that i have done it deliberately because i think we need to have a more balanced conversation. As i suggested earlier, and i will not repeat myself, we did, in, kansas and legislature included a stopgap privacy measure. It is designed to put in place guardrails, rules of the road, duties for privacy, distribution on limitation and the light, for all of the data that is collected, but the digital stuff were talking about in terms of active element here but also data is collected the oldfashioned way so, once it is collected in the database it does have value to some folks so, we have tried to put in those limitations to make sure chances data is protected and they can feel free to participate openly in legitimate tracing efforts. Let me ask you this. First of all, what i have heard you say is we need to have a federal preemption, and one federal standard for the retention, collection of and retention of this data. Is that correct. Yes, with an important caveat, and that is, this and this is my state rule coming out. I do understand the importance of a federal standard. That makes sense. I understand that but i would suggest that we dont want federal preemption of state and forsman. And we also dont want to yes, but we also dont want to compel state, for example, state agencies to go to federal court, follow federal rules to enforce a federal law because with all respect, as ive said to my colleagues many times, i wanted to do, that i would try to be a u. S. Attorney. I am a state actor. So what makes sense to me is set a federal standard with respect to data privacy but to allow states to independently enforce that standard under state law in state court, with state procedures and state rules, as long as we are holding those same standard. Let me ask you this, before we move on, and my time is about to run out should then we see that, should it be that that consumers, the Online Consumer has the ability to choose to opt in to share their information or choose to opt out if they do not want that and indeed it is collecting and holding that information to share that with third parties. Is that something that should be granted to them, or a protection afforded to them . Obviously as you know better than i, that is part of a robust policy debate both here and with our friends in europe. But i am on the general side of the debate that suggests my personal data is my personal data and i have to be able to control with whom it is shared and then reshared. All right. Ill tell you what, mister chairman, i will yield back the remainder my time. Thank you for yielding back. Ive got to go vote. I have one question i want to ask and then i will turn the hearing over to senator blumenthal for a question or two he may have he is going to then close the hearing. We are to be exiting this room by 5 45, so, our panel of witnesses should breathe a sigh of relief that it cant last much longer. I want to ask mr. Chairman, with noteworthy cybersecurity news related to twitter last week, the survey is a pretty significant example of social engineering, for the testimony indicated that these types of threats are responsible for quote, upwards of 90 of data breaches. If you have any recommendation for the subcommittee on how congress can draw increase consumer attention to these risks, or even prevent them from occurring in the first place for ideally, there should be federal National Cybersecurity standards. There are several standards. For instance, the National Institute of standards for technology,. They have several standards in place the problem is that if you want to really compact social engineering combat social engineering attacks, youre going to have to go far and why did you go to have to get the private sector to some degree involved in motivated to live up to Data Security standards. If you had asked me what is the best framework to use in this particular case, i point to the department of defense cybersecurity maturity models certification. For. They have a very good remodel where you have five levels of ramp up in the sense of making sure that you comply overtime and can build up your resilience against scams like this, and basically, the ultimate or very effective solution for all the scams that you see is awareness, training the elderly increased awareness so they are actually doing a good job, but that isnt an awareness issue, educate, but also protect and the standards of protecting this to home pc but also Corporate Networks should ideally be a federal standard, so that everyone can comply. As we can see, at the, moment is not working. Thank you to all the panelists for your presentation today and general schmidt, thank you for joining us from home. Derek, i have known you at least since you were a young Senate Staffer and thank you for your Public Service now for a long period of time, on behalf of our fellow kansas, i appreciate your friends with us today, but i appreciate your presence in case of what you do for all of us. I now recognize senator blumenthal i want to join in thanking you as a former fellow attorney general. I would just say the next time we are hearing with you as a witness maybe we can do it kansas instead of here. I would ask you specifically because mr. Smith has said he would welcome a price gouging law at the federal level and i completely agree because right now there really is no federal price gouging law and that is a great obstacle to effective federal enforcement and i encounter this issue when i was state attorney general, urging the ban attorneys general of the United States to take action, and the ftc and they said to me, well, we have no federal law and in kansas, you have a price gouging law that says that a price increase is presumed unjustified if it exceeds by 25 the precrisis level. Tell me how you feel about that law, what do you think it is helped or harmed your offices ability to bring in enforcement action and whether he would recommend it to us in the United States senate, and the congress. Senator, i think it has been useful for kansas, as mr. Smith has suggested a couple of times. Sure, we try to attack in that law can try to use our general kansas version of the authority. We actually dont have an unfair standard to deal with price gouging but it is really clunky to do that and it is much better if there is something that looks more like a bright line standard. That way Everybody Knows what the rules are and our experience has been, by having that on the books, it has allowed us to give voluntary compliance almost universally at least from legitimate actors. The crooks and scammers are crooks and scammers, that is a different category but youre talking about price regulation, were talking about at least, to some extent, dealing with very legitimate enterprises and the bright line rule in law. At least it has been for us. Clarity is always good for enforcement. Let me ask you, and this is a little bit of an unfair question because senator moran is not here. If we were adopt to adopt a federal statute, i personally would be of against making it preemptive of all state laws, probably preemptive. I dont know how you feel about that issue of preemption when it comes to either price gouging or other federal statutes. Philosophically, as i suggested early, on our states guys are not surprisingly im not a fan of federal preemption generally as a philosophical matter. Having said that, i recognize there are times makes perfect sense, as i discussed in the senator black, run data privacy, i understand why you cannot have, as a practical matter, 50 plus, with territories, different sets of standards, or focus to manage that privacy so, the one thing i say on that, and i am quick to say, this is always true, but it is particularly true in this area, and speak only for myself, i have colleagues in the state and territory attorney General Community who are very different views on this but speaking for myself, when congress is made the determination appropriately by subject matter for a federal standard, and some area, lets say data privacy or maybe it is on price gouging, or whatever it is, as a general matter, if that is gonna be what congress does and if its going to preempt state from having any different standard, my own preference would be, dont go further than that in the preemption. Dont prevent me from having a state law that quantifies in state law the same standards so, it is the same performance part of the regulated entity that i can then enforce independently under state rules and state court with our state procedures because that is what my team is accustomed to doing and perhaps in some larger states where they have very large protection shops, Consumer Protection shops, they are accustomed to going down every day to enforcing federal law, whether it is a super statute overrun for it might be. I think it is not true for a lot of smaller states and so as im making enforcement decisions, just to be blunter than i should, but just to make the point, i will overstate it, i mean, ive got enough to do and forcing the laws of the state of kansas that i was hired by my voters to enforce, and forcing federal law is not a great privilege than i aspire to. It is Something Else to do. It is not very high on the pecking order. So i would much rather, if congress is going to set a standard, set it, but then let me work with my legislation, perhaps in addition, i have no objection to, that dont make it my exclusive option. Let me work with my legislature to find a way to bring state law alongside and enforce that standard our way. Thank you. I appreciate your perspective which i find very valuable. On this topic of privacy, i want to ask you, mr. Smith, Contact Tracing apps are not regulated under hipaa or any other privacy laws. I have introduced by camera legislation to legislate to regulate these acts. The proposal is called the Public Health emergency privacy act, but isnt there more than the ftc could do . I know you have issued general guidance but nothing recent and nothing specific, as far as im aware, such as advisory notices to the tech company. Into the tech companies, that im aware of, about Consumer Privacy of Contact Tracing apps. If the system of Contact Tracing is going to have any chance of work, privacy has to be assured to consumers. That is the ftcs job and im concerned that the ftc has been silent. So, the privacy of Contact Tracing have to be would address now in the absence of any federal legislation, using our unfairness and deception authority and i cant comment admit specific companies or any specific investigations, whether we might have them open or not, but this is an area where we have been heavily focused and part of that is because consumers, you are, right consumers have to trust these contact racing apps if theyre going to work. We need a lot of updating in order for Contact Tracing apps to work. Active all of his also need to know the rules of the road, so, we have App Developers. We have recently within the last month issued business guidance to App Developers where we have five or six specific points that they should take into account when developing apps. Now, some of these are not going to be anything new to you, like privacy by design, for example. But there is one thats kind of interesting which is, use privacy protective design features, such as decentralized protocols. So, one of the things that i think is really interesting about these contact racing apps that weve been running into recently is that they dont actually collect everybodys location in one big centralized database, and everybodys Health Information in one big centralized database. It lives here, and it is, and i have my bluetooth turned on, and you have your bluetooth turned on, and it has, these devices all have a single bluetooth identifier and if i test positive for coronavirus then that gets uploaded to the database and you dial into the database and you see, is anyone in any of these bluetooth ideas that ive been in close proximity with, is in the database or not . So, by using those kind of decentralized protocols we solve a lot of privacy issues up front. Other guidance which, again, no surprise, dont use identifiable data, use aggravated data to the extent youre able. Some of these apps will do things like display heat maps for where there is particular risk of exposure so that you dont need to know, you dont need to have even unique personal data, much less personally identifiable data. The aggregated data will be just fine. So, we have in the last month or so issued business guidance for App Developers but, you are right, that this is an area where we need to be vigilant and we are heavily focused on it because this is the privacy issue but 2020. It is one of the key privacy issues and has such freedom avocations, as you know, as, well or better than i, and im just thinking that more clarity and specificity. More information made available to the public, i am aware of this particles of decentralization, the use of bluetooth, amazon and google are working on systems. There is a coalition of groups that is hoping, i think, to have it ready by the end of the summer but an explanation of the American Public about how this data is safe, what those rules of the road will be and how they will be impervious or at least highly protected against intrusion or interference. I think will be very valuable. Our consumer ad so far has focused on how to spot it racing scam which is, dont click on a link if they dont ask you for money if they ask for money, its not legitimate, that kind of stuff. But we might have to explain that this is what a Contact Tracing up doesnt how it works. Because, as you know, as you well know, contact racing does not work unless you reach official level of participation. And now, we are nowhere near anywhere in this whole country, and very few places in the world, if any have reached that threshold level so you know, we talk so broadly and frequently about, we need testing, we need Contact Tracing, we need a vaccine, we need therapeutics, and in some ways the Contact Tracing may be the most difficult at all most difficult of all to achieve because we dont have that trust and credibility. Right, so, im not up to date us today but i do not believe there are very many statements of help that have Contact Tracing apps and i do think in the past, cases passed a contact racing law but i have heard only one or two states that have developed these apps and then of course the apps are going to have to be able to Work Together, right . Virginia will have to be with oklahoma and the different apis, whether it be google or apple, will have to Work Together so, it is a significant challenge. Right, well, we can talk about a lot more. I have one more area of questioning that i want to cover. You mentioned that the warning letters are, i think you said, effective, maybe even very effective. Maybe in some cases, but i talked about 255 warning letters. A lot of those scammers have come back, maybe not with exactly the same language, but they are back, and in some part, due to the lack of vigilance on the tech platforms that i mentioned earlier and miss mick larry very articulately described need to be held more accountable but i just want to say about warning letters. Speaking as a prosecutor, you know, i used to try to get actual court judgment. I even consent order, because you get a contender, we ought to go back to court to enforce it. With a warning letter, you have nothing to enforce. It is no deterrent. If you leave here and you drive about the speed limit, 85 miles an hour in a 60 mile an hour zone, and you get a warning letter, the deterrent effect, especially if you know that the next time youll get another warning letter, has very little impact. So, i wonder whether a more aggressive use of whether it is administrative or actual judicial process for judgments, for fines, for even criminal reform, would be appropriate. There is a lot there and i agree with you 100 than a warning letter by definition is by definition a warning letter. There is nothing to enforce, but, in the last, lets say weve been at this for three and a half months, middle of march. Maybe four months. I did that time, we have succeeded in getting almost all of those 255 companies to take down the claims and for those that have, and there are, some and there are some taking the claims down only to replace it with something that is equally misleading, we are pursuing Law Enforcement action, both in federal court and in front of our Administrative Law judges. Youve seen the fruits of some of that and it is outlined in our testimony, there is a lot more than in the pipeline, though. But this case take time and particularly when youre talking about fake yours, the way that we will typically prove that it is with the expert testimonies. Heres what scientific, educate people in the percent from depression would say is adequate substantiated, and you aint got it. That takes time. It also takes money but i think we have the resources, i think we have the man power to do it. We are doing it but it is not something that can be easily done overnight and so, you know, these warning letters have been very fast and very effective and i think, and i and when not we backing up with Law Enforcement but you are absolutely right that a warning letter on its face is not worth much. Now, general smith said that with respect to price gouging that a lot of the challenges just telling companies that are legitimate, scoreless, that hey, look, you cannot do this. You cannot say this, and when you do that, if we can fix the problem through that kind of communication, then we need to be doing that, but i appreciate your concern, absolutely. Yes, i i think there are all kinds of different potential violations. Some are in a gray area. You know, when you recommend the equivalent of somebody swallowing Hand Sanitizer or Something Like that right. Or bleach or whatever and youre making money from it right. I think that something more than a warning letter may be appropriate. Well, there are also we have been working with the fda, as you know. Yeah. And fda has been as they outlined in their testimony, theyve been bringing actions criminally. Weve been making criminal referrals. So, we work with a wide variety of partners. And sometimes in our cases we get there and realize that the crims are involved too. Well defer to them unless they want us to come along with them which has happened in a couple of cases. They can do their search warrant and at the same time we can get our asset freeze and e are seaver appointed. Thank you. At the risk of being tossed out, which has not yet happened to me as a senator, tossed out of the room, im going to close the hearing. But i am certainly interested in following up on many of these issues. I want to thank each of our witnesses, mr. Smith, attorney general schmidt, all of you for your excellent testimony, and for important for your excellent work. You are trying to make these laws work. We make the laws, but you try to make them work. And i really appreciate your being here today. Im sure the chairman joins me in that sentiment and hope we have an opportunity to talk soon again. This hearing record will remain open for two weeks. During this time, senators are asked to submit any questions for the record. Upon receipt, the witnesses are requested to submit their written answers to the committee as soon as possible. I, again, thank the witness, witnesses, for being here, and this hearing is adjourned. Thank you. Thank you, senator. Thank you very much. Thank you, senator. Coming up, President Trump holds a News Conference with reporters at the white house. Watch the president s remarks live on cspan3. Cspan has unfiltered coverage of congress, the white house, the Supreme Court, and Public Policy events. You can watch all of cspans Public Affairs programming on television, online or listen on our free radio app. And be part of the National Conversation through cspans daily Washington Journal Program or through our social media feeds. Cspan, created my americas Cable Television companies as a Public Service, and brought to you today by your television provider. Tonight on American History tv, our series on landmark cases, produced in cooperation with the National Constitution center, we explore the issues, people and places involved in some of the most significant Supreme Court cases in our nations history. We begin at 8 00 eastern with mcculloch v maryland, not explicitly mentioned in the constitution. Then at 9 30, the civil rights cases of 1883. This decision struck down the Civil Rights Act of 1875, a federal law that granted all people access to public accommodations like trains and theaters regardless of race. Watch landmark cases tonight on cspan3 and any time at cspan. Org. U. S. Attorney general william barr appears before the house judiciary committees general oversight hearing before the Justice Department on tuesday july 28th. Watch live on cspan. Watch any time on cspan. Org. Or listen on the go with the cspan radio app. This is randy winegard. Shes talking about issues of reopening schools among the pandemic. Thanks for joining us again. Thank you. Its my honor. Remind people of the American Federation of teachers, who you represent