Transcripts For CSPAN2 Hearing On Fraud Against Seniors 2015

The clerk will read a communication to the senate. The clerk washington d. C, nod conversation will now come to order and the chair recognizes himself for five minutes for the purpose of an Opening Statement. This morning, first let me welcome our witnesses. This morning we will receive an update on the Consumer Protection efforts in place to address the fraud risk for americas seniors. As of july 2013, there are over 44 million americans who are older than 65. That almost 14 of the population. The population, 65 and holder in the United States, projects to outnumber people younger than 18 for the first time in 2033. A mere 18 years from now. The Median Income of these households is over 35,000 per year, and 71 report having a computer in their home. The median networth of seniors 65 and over is 25 times that of people under 35 years of age. The expanding population of Older Americans and their relative wealth compared to other age groups increases the risk that someone will want to target them as scams. New technologies are everywhere. Each week a new smartphone or tablet is announced. New apps and new capabilities keep cropping up, kealing up with new technology can be a challenge, particularly for seniors that are less familiar with technology, or are retired and are not exposed to new technology at the workplace. The risk of fraud cannot be underestimated. In the november issue of consumer reports, eight brave seniors came forward to tell their stories about being defrauded. In some cases out of thousands of dollars, sometimes just in a matter of hours. This is all before family or Law Enforcement could be notified or intervene. While fraud perpetrated by strangers against the elderly is not the only type of abuse against the elderly, it does represent 50 of the reported cases. That is why the hearing today is so important. Even where there is no silver bullet, it is critically important for the subcommittee to understand what Government Agencies, what the media, what universities and what private groups are doing to empower seniors to protect themselves from fraud, and to help them recuperate losses if they are targeted. And we need to figure out how our enforcement agencies can devote more resources to the problem. There are few more important issues when it comes to fraud and Consumer Protection. The chair now recognizes subcommittee rank member for five minutes for an Opening Statement, please. Thank you, mr. Chairman. For holding this hearing on preventing fraud against seniors. I really appreciate the focus on this topic. I look forward to hearing from our witnesses. I want to particularly thank a fellow chicagoan, Robert Harris, for being here. Mr. Harris is the cook county Public Guardian and is leading the fight to protect the elderly against fraud and deception in my home town. As a longtime consumer advocate and now the cochair of the Congressional Task force on seniors for the democratic caucus, im committed to ensuring that seniors benefit from strong Consumer Protections. More now than ever this subcommittee ought to be helping and we are beginning that process today to ensure that elderly americans are protected against fraudsters. Seniors represent the Fastest Growing segment of our population since 2000. The number of seniors has grown 30 . While the population overall just increased 10 . More than one in four seniors who lives alone has difficulty with activities of daily living or some Cognitive Impairment. According to the fbi, serbs seniors generally have a higher net worth, tendencies to be trusting and less likely to report fraud. All of this makes the elderly prime targets. We have seen an uptick in the number of products and Services Targeted toward the elderly, including antiaging products, health, related products, Prize Promotions and reverse mortgages. Im incredibly concerned about the risks posed by those products and services. Not necessarily that all of them are fraudulent, but that we need to be careful. I want to know what trends or witnesses are seeing, hear their policy and Public Engagement prescriptions for combating fraud, and learn how we can help you in protecting the elderly. Id also like to say that if this congress is truly committed to rooting out senior fraud, we should start by providing Adequate Funding to the cfpb. [inaudible] the Consumer Financial Protection Bureau, the federal trade commission, and other agencies responsible for protecting seniors. Stopping fraud should not come at the cost of adequately overseeing Financial Services, industries, appropriately monitoring corporate data security, and privacy policies. Yet, unfortunately, the republican budget would eliminate mandatory funding for the Consumer Financial Protection Bureau and cut funding for the ftc more than three percent from the previous year. With those entities responsible for protecting more seniors from more threats each year, its hard to see how those proposals are anything but antisenior. I hope this hearing is the beginning of a collaborative process that will yield real benefits to Senior Citizens. Our senior population and their families deserve no less. Again, i thank the witnesses for appearing today. I thank the chairman for this hearing, and i look forward to gaining from your insights. Would the gentle lady yield back . I yield bang. The chair thanks the gentle lady. Chair asks if there are 0 other members on the republican side seeking time for an Opening Statement . We will temporarily conclude with member statements. Other member made yet arrive at the committee and wed like to give them time because we know there is another subcommittee hearing going on this morning and people are toggling in between. For the members who are hair, chair remean member that pursuant to Committee Rules all members Opening Statements are made part of the report to be respective of everyones time. [inaudible conversations] the chair is pleased to recognize the Ranking Member for the full committee for the p. Es of Opening Statement. You shouldnt wait for me, mr. Chairman. So noted. It will never happen again. Seriously. I want too thank you and the Ranking Member for holding todays hearing on ways to protect our seniors from fraud. As we have seen fraud too often each year it fakes consumers of all ages and at the perpetrators remain adept at avoiding the consequences their criminal acts. Seniors are a fast growing segment of our population and their threats to their Financial Security can mean bills of dollars in stolen assets. Todays seniors are living longer, and possess greater wealth than previous Generation Office sender. Obviously encouraging trends but also represent opportunities for abuse to occur seniors are incut bet width ann aging products, computer repair, and many others. Theyre also targeted disproportionately for certain scams like those involving prize mow motions, Health Related products and services and reverse mortgages in addition active lives means active on the speaker net where a significant number of scams originate. Certain types of harassment some as being constantly bombard with telemarketing scams and stop answering the phone can lead to feelings of isolation. And we have seen a rise of abuse committed by those close to seniors, including Family Members, caregivers or other trusted adviser. Seniorers are less his tenant to report crimes either out of embarrassment or fear of retribution. Other is may be unaware of a crime committed against them. A number of federal agencies stand ready to assist state and local services in combating fraud against seniors. The ftc and the Consumer Financial Protection Bureau play a keel key role in take actions against the perpetrators and as up a is the case, much of the daytoday fighting against fraud is occurring at the state and local levels. I look forward to hearing from the Witnesses Today what is working and where we can improve our response to fraud against seniors. Our seniors in the savings they have worked so hard to build over the course of their lives are at stake and some seniors have seen the nest eggs wiped away and never to return. We need to make sure the seniors have the tools to prevent these devastating scenarios if just want to say, when i graduated from law school, for a couple of years, i was actually i worked for an agency called protective services for the elderly, when if was in the state legislature, we actually put together a bill that govern cane, who is a republican, signed, that basically set up a program protecting the elderly from fraud and abuse. So im particularly i havent really been involved directly since then. Its a long time ago. But always something i worry a great deal about and i was actually involved with this on a daytoday basis. So, thank you, mr. Chairman. Gentleman yields back and the chair thanks the gentlemen now we will turn to our witnesses. We do want to thank them for being here with us this morning and taking time to testify before this subcommittee. Todays hearing will consist of two panels, im e each panel will have an opportunity to give an Opening Statement followed by a round of questions from members. Once we conclude with questions of the first panel, well take a brief recess to set up for the second panel. Our first Witness Panel for todays hearing includes mr. Daniel kaufman, Deputy Director of the bureau of Consumer Protection at federal trade commission. Mrs. Stacy cannon, Deputy Director of the office of financial protection for Older Americans at the Consumer Financial Protection Bureau. And mr. Robert f. Harris, Public Guardian of cook county, illinois. We appreciate all of you being here today and well begin the panel with you, mr. Kaufman. Youre recognized for five minutes for an Opening Statement. Thank you. Good morning. I am daniel kaufman, Deputy Director of the bureau of Consumer Protection at the federal trade commission and delighted to appear before you to provide an overview of the fraud throat Older Americans. Come batting fraud is a critical component of the ftcs Consumer Protection mission and certainly every Law Enforcement case that we bring affects Older Americans. We have adopted a multifalls set approach in our battle against fraud targets older consumers or injuries them more than others and clues aggressive Law Enforcement policy initiatives and Consumer Education and outreach. To address such fraud effectively, the ft cmonner toes fraud trend by gathering data gather from Consumer Complaints and surveys and corroborating with Law Enforcement, academia and legal services. Through our expensive Law Enforcement experience and efforts to track fraud trends we have identified practices affecting seniors in several dissecrete areas and our Consumer Complaint data shows for 2015, Older Americans complained primarily about government and business imposter scams, telemarketing, and sweepstakes and lottery scams. While our Consumer Survey hoes that Older Americans north necessarily more likely to be defrauded then younger consumers the ftc has never spoke cussed on scams involving seniors inch recent year we have concentrated our late. Effort on Technical Support and healthcare related scams. Fraudsters frequently claim affiliation with wellknown businesses or Government Agencies to build trust with consumers. And often use robocalls and spoof caller i. D. Es to reach as many people as possible. In the last year, the ftc has file three cases against defendants engaged in Technical Support scams where con artists trick consumers into purchasing Technical Support services and products purportedly to fix problems on their computers. In fact the computer problems are nonexistent the defendants have caused millions of dollars in injury to older consumers. The ftcs actions crucial in halting these practices. Similarly, the ftc had filed multibell cases against fraudsters that used practices to sell healthcare related products and services to Older Americans such as medical alert systems, pharmaceutical benefits, and fake information regarding medicare benefits. In all of thieves cases, the fraudsters pretend an affiliation with a consumers friend or Family Member or a wellknown bank or Government Agency in order to gain consumers trust. Law enforcement efforts have banned defendants from telemarketing, making row ocalls, debiting Bank Accounts and we have recovered money for consumers. We have also sued Money Transfer Services Commonly used in scams that target Older Americans and our coordination with state, federal, and International Partners is a strong as ever. Indeed some of the individuals suedes by the ftc for defrauding elderly consumers have been prosecuted criminally. Finally, Consumer Education and outreach are indispensablible. In 2014 we launched an innovative and successful education effort called, pass it on, aimed at older active consumers. Passion it pass it on arms seniors with information such as imposter and Health Care Scams and Identity Theft they can pass on to family and friends. The ftc has an ongoing and sustain commitment to protecting Older Americans by pursuing robust Law Enforcement, important policy work, and innovative Consumer Education and outreach. I look forward to any questions you may have. Chair the thanks. Ms. Cannon youre recognized for five minutes for an Opening Statement, please. Would you please check to see if your microphone is on. Thank you. Can you hear me now . Great. Thank you. Thank you, chairman burgess, Ranking Member and distinguished members of the subcommittee for this opportunity to speak with you today about the devastating problem of elder financial exploitation. My name is stacy can no the Deputy Assistant directyear in the office nor Older Americans at the Consumer Financial Protection Bureau. Our office is dedicated to providing older consumers with the tools they need to protect themselves from Financial Abuse and to make sound financial decisions. The evidence is clear, Older Americans have assets that make them attractive targets of fraudsters. In 2011, the cumulative net worth of consumers age 56 and old ever was approximately 17. 2 trillion decision. Older dowels are victimized by scam artist us, Family Members, caregivers, financial advisers, home repair contractors and even courtappointed guardians. A National Study found that an estimated 5. 2 of americans 60 and older are exploited by a Family Member. Other studies show that most incidents of Financial Abuse go unreported and under the