Next a Senate Aging Committee hearing on phone scams targeting seniors. Witnesses talked about a particular scam where someone pretended to be a Family Member or loved one to get a victim to wire them money. Americans lost more than 73 million to phone scams last year. This is about 50 minutes. Good afternoon. Ive asked all of you to join the table instead of two panels, because we have a vote that is being called around 2 20. So i want to take the advantage of going ahead and getting all of your testimony. This hearing is the latest in a series of investigations the committee has conducted on the devastating impact that fraud and scams have on Senior Citizens over the last two years. We have explored the rise of jamaican lottery scams, tax refund schemes and Social Security and medicare fraud. So today we are going to examine a what is now making a comeback in the scam world. And its called the grandparent or emergency scam. Its quite despicable. It preys on a Senior Citizens willingness to do anything to help a Family Member in trouble. For example, a scammer convinces the victim over the telephone that his or her grandchild or another relative is in jail, is in the hospital or stuck in a foreign country and needs money to get out of the predicament. And since the beginning of 2012, the federal trade commission has received more than 30,000 complaints about scammers who claim to be a friend or a Family Member in distress. And its costing americans more than 42 million. Just since the beginning of 12. Now, this doesnt tell the whole story. Since a majority of these crimes go unreported. What we do know is that the ftc reports that imposter scams have double doubled between 2009 and 2013. And so today were going to hear from a distinguished panel on what authorities are doing to detect and prosecute such crimes and how seniors can protect themselves. We are also going to hear about private industrys role in combating these scams. The bottom line is that the government alone cannot prevent these types of scams. Private companies that sell prepaid debit products or offer Wire Services are the last line of defense for consumers before their money is sent and then its lost forever. Now, fortunately, some of these large retailers are beginning to take proactive steps to protect their customers. In addition to issuing consumer warnings about scams, Many Companies are now training their employees to identify and warn potential victims. And we have some good news today from the green dot corporation. It makes a product that has been one of the cards of the choice for fraud people in many of the schemes. We heard about it in the jamaican lottery scan. Green dot announced plans to retire the money pack card from store shelves nationwide. They have seen how this product has been used by the scammers and have decided to do the right thing, and thats to pull it. Green dot, walmart and cvs submitted statements for todays hearing which will be a part of the record. And going forward, we will have these Companies Come and join in this committee to hear about their experience and their progress. Were going to continue to encourage other Debit Card Companies and retailers to do the same pro active thing. So little by little, we are trying to give visibility to this fraud thats being perpetrated, particularly on our Senior Citizens. Senator collins . Thank you, mr. Chairman. I apologize for being a few minutes late. Like you, im trying to balance a lot of different commitments today. I want to thank you for calling this hearing to explore once again the dangers posed by con artists looking to swindle Older Americans out of their life savings. This is our seventh hearing on such scams. And i appreciate you are maintaining the committees focus on this incredibly important topic. In fact, a great deal of what we have learned about these scams is a result of reports and complaints made to the committees fraud hotline. Todays hearing explores a form of impercent nation scam that we call the grandparent scam. A scammer calls a potential victim and claims to be someone he is not who needs cash immediately because of an emergency. The scammer plays on the victims emotions by claiming to be a grandchild or another loved one. He says that he needs money because he has been in an accident, his car is broken down or he is stranded in a foreign country. I myself have received an email version of this scam from someone purporting to be my neph nephew. It sounded just like him. He was overseaed supposedly and had been robbed and needed money to fly back home. Perhaps unsympathetically, i told him to go to the American Embassy for help. I then started thinking about it and called his father to see what was going on and found out that he was not, in fact, overseas. In many cases, the scam mer ask the victim to send money in the fastest way possible which involves going to a local retailer, purchasing a Prepaid Debit Card and giving the scammer the code on the back to allow him to transfer its value. Once that money is transferred, it is very difficult if not impossible to trace. One main grandparent was called by a scammer impersonating his grandson. The so thecalled grandson told my constituent he had gotten into a car accident in nicaragua and needed 1,800 to pay the rental car company or he wouldnt be allowed to leave the country. After my constituent withdrew the money from his savings and wired it to his socalled grandson, he got another call. This time the scammer said that the government was pursuing criminal charges against him because someone had been injured in the accident and he needed 4,000 to hire a lawyer right away. Since my constituent thought that his grandson was traveling abroad for a wedding, he went to his bank again and withdrew 4,000 more from his savings. When the scammer pressed his luck and called back a third time asking for even more money, my constituent became suspicious and thought to ask him some simple questions that he wished that he had asked from the start such as where were you born and who is your mother. It was only when the scammer couldnt answer those questions that this loving and trusting grandfather realized that he had been duped. Fortunately, he was able to limit his losses because he hadnt yet released the code to transfer the money to nicaragua. Another constituent, got a call last fall from someone who claimed to be her son. He said he had been in a car accident, that it was his fault and he didnt have insurance. He asked for 1,500 to pay off the other party and she unfortunately did so using Western Union to wire the money. Here is the point. When she realized that she had been scammed, she contacted everyone she could think of to report her case and to get help. Local and state Law Enforcement, the fbi. But she was told there was nothing that they could do for her. As we have learned, these scammers are not only unscrupulous and aggressive, often calling potential victims dozens of times, but they are also techno logically savvy. They know how to route their calls using voice over internet protocol, which is very hard to trace. And they know how to spoof caller i. D. To make it appear that they are calling from a trusted source. Another version of this impercent nation scam might be called the tax man scam. In this version, the con artist used a spoof caller i. D. That represents a legitimate washington, d. C. Phone number to contact taxpayers and they claim to be calling from the criminal Investigative Division of the irs. The scammer identifies himself as the investigation chief and tells the taxpayer that he or she owes more than 5,000 in back taxes. Well, to make a long story short, my staff actually spoke to a tax man scam artist as part of the committees investigation. We suspect that the scammer who called himself steve parker was located outside the united states. But this scam is so elaborate that the scammer was able to claim he was calling from the federal Investigative Department at the irs, was able to give the correct address for irs headquarters here in washington and actually included a room number but not surprisingly that room number does not exist within the irs building. Mr. Chairman, these scammers are a plague for all americans but especially to our seniors. I thank you for continuing to shine a light on their appalling practices and i look forward to hearing from our witnesses. You notice a pattern here of all of these hearings that we have been having on scams that are perpetrated against Senior Citizens. Absolutely. This is just another version. Its a particularly disrespectful one. First, we have a victim of a grandparent scam, and we arent using his full name because he doesnt want the scammers to try to reconnect him. And we will call him mr. W. He is accompanied today by one of his grandsons. Next kevin rupy, the Vice President of policy and law at the u. S. Telecom association. And then lewis greisman, associate commissioner of marketing practices in the bureau of consumer protection. And then joseph campbell, the assistant director of the fbis criminal Investigative Division. Mr. Campbell, your written statement should be very specific on the grandparent scheme and other imposter phone scams. The fbis website has more information on these type of scams compared to the statement that you have submitted. So i would like in the questioning for you to provide additional details. Now, because of the fact that we have got a vote coming up and its at 2 10, im going to hold you to five minutes so that we can get through everybody and get on in the questions. All right. Mr. W. , you are up. If you would turn on your microphone. Thank you, chairman nelson and Ranking Member collins for the opportunity to tell my story before the Senate Special committee on aging. I am an 81yearold grandparent from ohio. Last december, i answered a phone call that sent my life into a tailspin and conned me out of 7,000. What i now know was a phone scam. The caller had a young voice and said, grandpa, this is your favorite grandson. To which i replied, i have six grandsons and theyre all my favorites. His reply was, well, this is your oldest grandson. To which i replied, hi, how are you . I cant remember exactly his reply but it was something like, im in jail and i need your help to get me out of jail and i dont want mom and dad to know about this. Talk to this Police Officer. I cant remember the officers name but he said he stopped a car for speeding. The car contained four young men who were on their way to a football game. In a search of the vehicle, narcotics were found. All four of the young men were arrested on narcotics charges. All four denied knowledge of who the owner of the narcotics was. But he had been the most cooperative and all he needed was 3,000 cash to get out of jail. I told the Police Officer that i needed to go to i was told by the Police Officer that i needed to go to walmart or cvs and load a total of 3,000 into green dot money pack cards in 1,000 denominations and i needed cash to purchase the cards. I cashed a check for 3,000 at my bank and went to walmart and bought three money back cards each loaded with 1,000. I returned home and called the Police Officer at the number with a 438 area code. The area code for canada and gave him the scratch off numbers on the money pack cards. Later the Police Officer called again and said they needed an additional 4,000. My Checking Account would not cover that amount. My wife went to the bank and withdrew 4,000 from per savings account and went to walmart and loaded four money pack cards with 1,000 each. I told the officer the scratch off numbers. Subsequently i received another call from him saying they needed another 2,500. At this point my wife suggested we call tis twin brother to see if he had seen him that day. He said he saw him before he went to work that morning. I called tys cell phone and he answered. He was at work. It became obvious that grandpa and grandma were victims of a scam. Looking at the money pack card, theres a warning that says in small print i repeat, in small print it says, if anyone else asks you for money your money pack number, your information from your receipt, its a scam and green dot is not responsible for paying you back. I believe putting that warning in such small print is unconnecticut shenable and green dot has some liability inasmuch as they profited from the transacti transactions. I believe that walmart has some responsibility in that they it facilitated and profited from the scam with their sale of these money pack cards. I reported this scam to the Cincinnati Police who did not seem interested. I contacted the federal bureau of investigations who referred me to the federal trade commission. Im not sure what they have been able do about it. I have some suggestions about what prepaid Debit Card Companies could do to protect consumers which i hope to get into later on. Thank you for listen to me and giving me this opportunity to testify. Thank you. You are very courageous to come and share this with us. Mr. Rupy . Chairman nelson, Ranking Member collins, members of the committee, thank you for giving me the opportunity to appear before you today. My name is kevin rupy and i serve as Vice President of law and policy at u. S. Telecom. U. S. Telecom and our Member Companies share the committees concern about the problems associated with phonebased imposter scams targeted at seniors. Calls using voice overinternet protocol or Voip Technology when combined with caller formal working group focused on creating a secure caller i. D. For v. O. I. P. Calls. The secure telephone identity revisited group has been working since then to achieve this goal. Despite challenges, stake holders believe a krit toe graphic approach can provide a stronger and less spoofable assurance of identity than the legacy Telephone Network provides today. Members include representatives from industry including many u. S. Telecom members and government, including the fccs chief technologist. In may, the group developed high level requirements for solutions and less than two weeks ago it released a document outlining a mechanism for securely identifying originators of the phone calls. Any solutions developed by this group will become most effective upon a full transition to i. P. Based communications networks, a process that is well under way. Second, u. S. Telecom Member Companies and independent Application Developers offer Services Today that can help Older Americans reduce unknown and potentially fraudulent calls. For example, consumers subscribing to Verizon DigitalVoice Service can utilize a do not disturb feature which prevents some or all incoming calls from ringing a customers phone, sending them to voicemail or a general announcement. Of it can be activated for set periods or left on and also lets consumers establish an accepted caller list for up to ten numbers that will bypass the safeguards and allow the call to ring through. Similar offering are available for century link, at t and others. In addition, Third Party Services such as the ftcs row bow call challenge winner may also be available to consumers. Finally, our industry has ramped up a concerted broad based Public Private effort focused on abuse within the existing framework of the mobile anti abuse working group. Participants in the working group include the fcc, the ftc, the fbi, the department of Homeland Security and a broad range of industry members. The voice and telephone abuse sole focus is addressing abuse occurring over Telephone Networks. It was created to help protect te Telephone Services from abuse by developing best practices technologies and methods for mitigating phonebased attacks and scams. In closing, let me thank again the committee for holding this timely hearing. We share the committees concerns. We look forward to our continued Work Together to address this constantly evolving challenge. Double your efforts, mr. Rupy. Miss greisman. Good afternoon, chairman nelson, Ranking Member collins and members of the committee. I appreciate the opportunity to appear before you on behalf of the federal trade commission to discuss the commissions role in combating telemarketing fraud. As we have heard the jish inflicted by fraud is wellknown. The harm is not just economic but emotional as well. To tackle phone fraud, the ftc uses Law Enforcement with close coordinate with federal and international counterparts, education and outreach and an initiative to spur technological innovation to develop tools that help consumers avoid unwanted calls and also help law enforcers to track down the frauds. First Law Enforcement and with a focus on imposter scams. Each of us seeks out and relies upon trusted sources. Thats the very thing scammers use and twist. Whether they pretend to be from the government, a