[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]




 
             FIGHTING FRAUD AGAINST THE ELDERLY, AN UPDATE

=======================================================================

                                HEARING

                               BEFORE THE

           SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND TRADE

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 23, 2015

                               __________

                           Serial No. 114-92
                           
                           
                           
                           
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]                           




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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman

JOE BARTON, Texas                    FRANK PALLONE, Jr., New Jersey
  Chairman Emeritus                    Ranking Member
ED WHITFIELD, Kentucky               BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
JOSEPH R. PITTS, Pennsylvania        ELIOT L. ENGEL, New York
GREG WALDEN, Oregon                  GENE GREEN, Texas
TIM MURPHY, Pennsylvania             DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas            LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee          MICHAEL F. DOYLE, Pennsylvania
  Vice Chairman                      JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio                DORIS O. MATSUI, California
CATHY McMORRIS RODGERS, Washington   KATHY CASTOR, Florida
GREGG HARPER, Mississippi            JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey            JERRY McNERNEY, California
BRETT GUTHRIE, Kentucky              PETER WELCH, Vermont
PETE OLSON, Texas                    BEN RAY LUJAN, New Mexico
DAVID B. McKINLEY, West Virginia     PAUL TONKO, New York
MIKE POMPEO, Kansas                  JOHN A. YARMUTH, Kentucky
ADAM KINZINGER, Illinois             YVETTE D. CLARKE, New York
H. MORGAN GRIFFITH, Virginia         DAVID LOEBSACK, Iowa
GUS M. BILIRAKIS, Florida            KURT SCHRADER, Oregon
BILL JOHNSON, Ohio                   JOSEPH P. KENNEDY, III, 
BILLY LONG, Missouri                 Massachusetts
RENEE L. ELLMERS, North Carolina     TONY CARDENAS, California
LARRY BUCSHON, Indiana
BILL FLORES, Texas
SUSAN W. BROOKS, Indiana
MARKWAYNE MULLIN, Oklahoma
RICHARD HUDSON, North Carolina
CHRIS COLLINS, New York
KEVIN CRAMER, North Dakota

                                 
                                 
           Subcommittee on Commerce, Manufacturing, and Trade

                       MICHAEL C. BURGESS, Texas
                                 Chairman
                                     JANICE D. SCHAKOWSKY, Illinois
LEONARD LANCE, New Jersey              Ranking Member
  Vice Chairman                      YVETTE D. CLARKE, New York
MARSHA BLACKBURN, Tennessee          JOSEPH P. KENNEDY, III, 
GREGG HARPER, Mississippi                Massachusetts
BRETT GUTHRIE, Kentucky              TONY CARDENAS, California
PETE OLSON, Texas                    BOBBY L. RUSH, Illinois
MIKE POMPEO, Kansas                  G.K. BUTTERFIELD, North Carolina
ADAM KINZINGER, Illinois             PETER WELCH, Vermont
GUS M. BILIRAKIS, Florida            FRANK PALLONE, Jr., New Jersey (ex 
SUSAN W. BROOKS, Indiana                 officio)
MARKWAYNE MULLIN, Oklahoma
FRED UPTON, Michigan (ex officio)

                                  (ii)
                                  
                                  
                                  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Michael C. Burgess, a Representative in Congress from the 
  State of Texas, opening statement..............................     1
    Prepared statement...........................................     2
Hon. Janice D. Schakowsky, a Representative in Congress from the 
  State of Illinois, opening statement...........................     3
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     4
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, prepared statement...................................    84

                               Witnesses

Daniel Kaufman, Deputy Director, Bureau of Consumer Protection, 
  Federal Trade Commission.......................................     5
    Prepared statement...........................................     8
Stacy Canan, Deputy Assistant Director, Office of Financial 
  Protection for Older Americans, Consumer Financial Protection 
  Bureau.........................................................    25
    Prepared statement...........................................    27
Robert F. Harris, Public Guardian, Cook County, Illinois.........    33
    Prepared statement...........................................    35
Charles Wallace, Director of Undergraduate Studies, Computer 
  Science Department, Michigan Technological University..........    58
    Prepared statement...........................................    61
Tobie Stanger, Senior Editor, Consumer Reports...................    66
    Prepared statement...........................................    68

                           Submitted Material

Article of November 2015, ``Lies, Secrets, and Scams,'' Consumer 
  Reports, submitted by Mr. Burgess..............................    85


             FIGHTING FRAUD AGAINST THE ELDERLY, AN UPDATE

                              ----------                              


                        FRIDAY, OCTOBER 23, 2015

                  House of Representatives,
Subcommittee on Commerce, Manufacturing, and Trade,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 9:16 a.m., in 
room 2123 of the Rayburn House Office Building, Hon. Michael C. 
Burgess (chairman of the subcommittee) presiding.
    Members present: Representatives Burgess, Lance, Harper, 
Guthrie, Kinzinger, Bilirakis, Brooks, Mullin, Schakowsky, 
Kennedy, Butterfield, and Pallone (ex officio).
    Staff present: Leighton Brown, Press Assistant; James 
Decker, Policy Coordinator, Commerce, Manufacturing, and Trade; 
Andy Duberstein, Deputy Press Secretary; Graham Dufault, 
Counsel, Commerce, Manufacturing, and Trade; Melissa Froelich, 
Counsel, Commerce, Manufacturing, and Trade; Paul Nagle, Chief 
Counsel, Commerce, Manufacturing, and Trade; Olivia Trusty, 
Professional Staff Member, Commerce, Manufacturing, and Trade; 
Dylan Vorbach, Legislative Clerk; Michelle Ash, Democratic 
Chief Counsel, Commerce, Manufacturing, and Trade; Jeff 
Carroll, Democratic Staff Director; Diana Rudd, Democratic 
Legal Fellow; and Ryan Skukowski, Democratic Policy Analyst.
    Mr. Burgess. The Subcommittee on Commerce, Manufacturing, 
and Trade will now come to order. And the Chair recognizes 
himself for 5 minutes for the purpose of an opening statement.

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE 
              IN CONGRESS FROM THE STATE OF TEXAS

    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 America's seniors. As of July 
2013, there are over 44 million Americans who are older than 
65. That is almost 14 percent of the population. The population 
65 and older, 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 percent report having a computer in 
their home.
    The median net worth 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 in scams. New technologies are everywhere. Each week a new 
smartphone or tablet is announced. New apps with new 
capabilities keep cropping up. Keeping 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 percent 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 for fraud and to help them recoup 
loses 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 prepared statement of Mr. Burgess follows:]

             Prepared statement of Hon. Michael C. Burgess

    Good morning. This morning we will receive an update on the 
consumer protection efforts in place to address fraud risks for 
America's seniors.
    As of July 2013, there are 44.7 million Americans 65 and 
older--over 14 percent of the population. The population 65 and 
older in the U.S. projects to outnumber people younger than 18 
for the first time in 2033--in 18 years.
    The median income of these households is over $35,000, and 
71 percent report having a computer in their home. The median 
net worth of seniors 65 and over is 25 times that of people 
under 35 years old. The expanding population of older Americans 
and their relative wealth compared to other age groups, 
increases the risk that fraudsters will target them in their 
scams.
    New technologies are everywhere. Each week a new smartphone 
or tablet is announced with new Apps and new capabilities. 
Keeping up with new technology can be a challenge, particularly 
for seniors that are less familiar with technology or are 
retired and not exposed to new technology at work.
    The risk of fraud cannot be underestimated. In the November 
issue of Consumer Reports, eight brave seniors came forward to 
tell their story about being defrauded--in some cases out of 
thousands of dollars in a matter of hours--before family or law 
enforcement were notified.
    While fraud perpetrated by strangers against the elderly is 
not the only type of abuse against the elderly, it does 
represent 50 percent of reported cases. This 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, the media, universities, and private 
groups are doing to empower seniors to protect themselves from 
fraud and help them recuperate losses if they are duped by 
criminals. And we need to figure out how our enforcement 
agencies can devote more resources to this problem. There are 
few more important issues when it comes to fraud and consumer 
protection.

    Mr. Burgess. The Chair now recognizes the subcommittee 
ranking member, Ms. Schakowsky, for 5 minutes for an opening 
statement, please.


       OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A 
     REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS

    Ms. Schakowsky. 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 he is leading the fight to 
protect the elderly against fraud and deception in my hometown.
    As a long time consumer advocate, and now the co-chair of 
the Congressional Task Force on Seniors, for the Democratic 
Caucus, I am 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 about 30 
percent while the population overall just increased 10 percent. 
More than one in four seniors who lives alone has difficulty 
with activities of daily living or some cognitive impairment.
    According to the FBI, seniors generally have higher net 
worth, a tendency to be trusting, and are 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 that are 
targeted toward the elderly, including anti-aging products, 
health-related products, prize promotions, and reverse 
mortgages. I am 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 our witnesses are seeing, hear 
their policy and public engagement prescriptions for combatting 
fraud, and learn how we can help you in protecting the elderly.
    I would 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, 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 Customer Financial Protection Bureau, 
and cut funding for the FTC more than 3 percent from the 
previous year. With those entities responsible for protecting 
more seniors from more threats each year, it is hard to see how 
that's proposals are anything but anti-senior. 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.
    Mr. Burgess. Does the gentlelady yield back?
    Ms. Schakowsky. And I yield back.
    Mr. Burgess. The gentlelady yields back. The Chair thanks 
the gentlelady.
    The Chair asks if there are other Members on the Republican 
side who seek time for an opening statement.
    We will temporarily conclude with Members' opening 
statements. There may be additional Members on either side that 
may yet arrive at the committee, and we would like to give them 
time. Because we do know there is another subcommittee hearing 
going on this morning and people are toggling in between.
    For the Members who are here, the Chair reminds Members 
that pursuant to committee rules, all Members' opening 
statements will be made part of the record. To be respectful of 
everyone's time, the Chair, then, is pleased to recognize the 
ranking member of the full committee, Mr. Pallone, 5 minutes 
for the purpose of an opening statement.
    Mr. Pallone. Oh, you shouldn't wait for me, Mr. Chairman.
    Mr. Burgess. So noted. It will never happen again.
    Mr. Pallone. Seriously, you shouldn't.

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW JERSEY

    I want to thank you and the ranking member for holding 
today's hearing on ways to protect our seniors from fraud.
    As we have seen far too often each year, fraud affects 
consumers of all ages, and the perpetrators of scams remain 
highly adept at avoiding the consequences of their criminal 
acts. Seniors, however, are a fast growing segment of our 
population and the threats to their financial security, can 
mean billions of dollars in stolen assets if we let them fall 
prey to scammers.
    Today's seniors are living longer, more active lives and 
possess greater wealth than previous generations of seniors. 
These are obviously encouraging trends, but also represent 
opportunities for abuse to occur. Seniors are inundated with 
advertisements that promote fraudulent work-from-home 
arrangements, computer repair, anti-aging products, and many 
others. They are also targeted disproportionately for certain 
scams like those involving prize promotions, health-related 
products and services, and reverse mortgages.
    In addition, more active lives increasingly means active on 
the Internet where a significant number of scams originate, 
according to the FTC. Moreover, certain types of harassment 
such as being constantly bombarded with telemarketing scams and 
feeling the need to stop answering the phone, can lead to 
feelings of isolation for our seniors. Most troubling, we also 
are seeing a rise in abuse, particularly financial in nature, 
committed by those closest to seniors, including family, 
friends, caregivers. Or other trusted advisors. Seniors who are 
victimized are often hesitant to report crimes to law 
enforcement either out of embarrassment or fear of retribution 
from their abuser. Others may simply be unaware of a crime 
committed against them.
    A number of Federal agencies stand ready to assist State 
and local services in combatting fraud against seniors. The FTC 
and the Consumer Financial Protection Bureau both play a key 
role in collecting data, educating consumers, and taking 
enforcement actions against the perpetrators of financial 
exploitation. And as often is the case, much of the day-to-day 
fighting against fraud is occurring at the State and local 
levels.
    I look forward to hearing from those witnesses today about 
what is working and where we can improve our response to fraud 
against seniors. Our seniors and the savings they have worked 
so hard build over the course of their lives are at stake. And 
some seniors have seen their nest eggs wiped away, never to 
return. We need to ensure that all levels of Government are 
doing what they can and have the tools they need to prevent 
these devastating scenarios. We owe this commitment to our 
seniors.
    I just wanted to say, when I graduated from law school, for 
a couple years I was actually--I worked for an agency in New 
Jersey called Protective Services for the Elderly. And when I 
was in the State legislature, we actually put together a bill 
that Governor Cane, who was a Republican signed, that basically 
set up a program protecting the elderly from fraud and abuse. 
So I am particularly--I haven't really been involved as 
directly since then. That is a long time ago. But it is always 
something that I worry a great deal about and I was actually 
involved with on a day-to-day basis.
    So thank you, Mr. Chairman.
    Mr. Burgess. The gentleman yields back. The Chair thanks 
the gentleman.
    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.
    Today's hearing will consist of two panels. Each panel of 
witnesses will have an opportunity to give an opening 
statement, followed a round of questions from Members. Once we 
conclude with questions of the first panel, we will take a 
brief recess to set up for the second panel.
    Our first witness panel for today's hearing includes Mr. 
Daniel Kaufman, Deputy Director of the Bureau of Consumer 
Protection at the Federal Trade Commission; Ms. Stacy Canan, 
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 we will 
begin the panel with you, Mr. Kaufman. You are recognized for 5 
minutes for an opening statement, please.

   STATEMENTS OF DANIEL KAUFMAN, DEPUTY DIRECTOR, BUREAU OF 
  CONSUMER PROTECTION, FEDERAL TRADE COMMISSION; STACY CANAN, 
 DEPUTY ASSISTANT DIRECTOR, OFFICE OF FINANCIAL PROTECTION FOR 
  OLDER AMERICANS, CONSUMER FINANCIAL PROTECTION BUREAU; AND 
    ROBERT F. HARRIS, PUBLIC GUARDIAN, COOK COUNTY, ILLINOIS

                  STATEMENT OF DANIEL KAUFMAN

    Mr. Kaufman. Thank you. And good morning, Dr. Burgess, 
Ranking Member Schakowsky, and members of the subcommittee. I 
am Daniel Kaufmann, Deputy Director of the Bureau of Consumer 
Protection at the Federal Trade Commission. And I am delighted 
to appear before you to provide an overview of the fraud 
threats to older Americans, and the FTC's actions to address 
them.
    Combatting fraud is a critical component of the FTC's 
consumer protection mission, and virtually every law 
enforcement case that we bring affects older Americans. We have 
adopted a multifaceted approach in our battle against fraud 
that targets older consumers or injures them more than others. 
And that includes aggressive law enforcement, policy 
initiatives, and consumer education and outreach.
    To address such fraud effectively, the FTC monitors fraud 
trends by examining data gathered from consumer complaints and 
surveys, and collaborating with others in law enforcement, 
industry, academia, and legal services.
    Through our extensive law enforcement experience and 
efforts to track fraud trends, we have identified practices 
affecting seniors in several discrete areas. And our consumer 
complaint data shows that for 2015, older Americans complained 
primarily about Government and business imposter scams, 
telemarketing, technical support scams, and sweepstakes and 
lottery scams.
    While our consumer survey shows that older Americans are 
not necessarily more likely to be defrauded than younger 
consumers, the FTC has nevertheless focused on scams involving 
seniors. For example, in recent years, we have concentrated our 
law enforcement efforts on technical support and healthcare-
related scams. Fraudsters frequently claim affiliation with 
well-known businesses or Government agencies to build trust 
with consumers, and often use robocalls and spoof caller IDs to 
reach as many people as possible.
    In the last year, the FTC has filed three cases against 
defendants engaged in technical support scams where con artists 
tricks consumers into purchasing technical support services and 
products, purportedly to fix problems on their computers. In 
fact, the computer problems are nonexistent and the defendants 
have caused millions of dollars in injury to older consumers. 
The FTC's actions are crucial in halting these practices.
    Similarly, the FTC has filed multiple cases against 
fraudsters that have used deceptive 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 these 
cases, the fraudsters pretended an affiliation with a 
consumer's friend or family member or with a well-known bank or 
Government agency in order to gain consumers' trust.
    Our law enforcement efforts have banned defendants from 
telemarketing, making robocalls, selling healthcare-related 
products or debiting bank accounts, and we have recovered money 
for consumers.
    We have also sued money transfer services that are commonly 
used in scams that target older Americans. And our coordination 
with State, Federal, and international partners is as strong as 
ever. Indeed, some of the individuals sued by the FTC for 
defrauding elderly consumers have been prosecuted criminally.
    Finally, consumer education and outreach are indispensable. 
In 2014 we launched an innovative and successful education 
effort called Pass It On that is aimed at older active 
consumers. Pass It On arms seniors with important information 
regarding topics such as imposter and healthcare scams, charity 
fraud, and identify theft that they can pass on to family and 
friends who might need it.
    The FTC has an ongoing and sustained 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.
    [The prepared statement of Mr. Kaufman follows:]
    
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    Mr. Burgess. The Chair thanks the gentleman.
    Ms. Canan, you are recognized for 5 minutes for an opening 
statement, please.

                    STATEMENT OF STACY CANAN

    Ms. Canan. Thank you. Thank you, Chairman Burgess.
    Mr. Burgess. Would you please check to see if your 
microphone is on?
    Ms. Canan. Thank you. Can you hear me now? Great.
    Thank you. Thank you, Chairman Burgess, Ranking Member 
Schakowsky, 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 Canan. I am the Deputy Assistant Director 
in the Office for 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 65 and older was 
approximately $17.2 trillion. Older adults are victimized by a 
range of perpetrators, including scam artists, family members, 
caregivers, financial advisors, home repair contractors, and 
even court-appointed guardians. A national study found that an 
estimated 5.2 percent 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 radar. Once the 
fraud occurs, of course, older Americans have little time and 
few resources to recoup lost savings.
    To address these serious challenges, we recognize that 
collaboration is critical. Among other things, the bureau 
participates, along with 11 other Federal agencies, in the 
Elder Justice Coordinating Council. The council fosters 
coordination of Federal agencies. For example, many of our 
initiatives support council recommendations. And this year the 
CFPB and the SEC jointly issued a consumer advisory on planning 
for diminished capacity and illness. The bureau also works on 
education initiatives with non-profits, community 
organizations, and industry groups, such as the Financial 
Services Roundtable and Meals on Wheels America.
    I would like to tell you about a few of our initiatives to 
combat elder financial exploitation. One is the Money Smart for 
Older Adults Program which we developed jointly with the FDIC. 
Money Smart is a train the trainer curriculum that teachers 
consumers and their caregivers about different types of fraud, 
scams, exploitation, and provides warning signs and tips that 
is used by a broad range of intermediaries, including State and 
local Governments, non-profits, and financial institutions.
    In October 2013, we released Managing Someone Else's Money 
Guides. They assist people who are managing the finances for a 
family member or a friend who is unable to pay bills or make 
financial decisions. Many older Americans experience declining 
capacity to handle finances, which make them very vulnerable to 
fraudsters.
    Twenty-two percent of Americans over age 70 have mild 
cognitive impairment. Even mild cognitive impairment can reduce 
an older person's ability to detect fraud or a scam, thereby 
necessitating the need for a surrogate to handle their money. 
The guides that I mentioned are user friendly how-to guides 
that explain the fiduciary's responsibilities and how to spot 
scams and exploitation.
    In 2013 the CFPB and seven other Federal agencies released 
interagency guidance to provide financial institutions with 
certainty about the legality of reporting suspected financial 
exploitation. The guidance encourages timely reporting to law 
enforcement, adult protective services, and other Federal and 
State and local agencies. The bureau also has additional 
resources that help protect older Americans against fraud. Ask 
CFPB is an interactive online tool that helps consumers find 
clear unbiased answers to their financial questions. It has 
served more than eight million visitors since March 2012.
    We also accept consumer complaints by phone, mail, fax, and 
through our Web site. As of September 30, 2015, the bureau 
handled over 726,000 complaints, of which approximately 63,000 
were submitted by or on behalf of a consumer 62 years and 
older.
    Congressional leadership and support is critical to 
implementing a multifaceted solution to the serious problem of 
elder financial exploitation. We therefore commend this 
subcommittee for holding this hearing and look forward to 
continued information sharing with interested parties and 
stakeholders. Thank you very much.
    [The prepared statement of Ms. Canan follows:]
    
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    Mr. Burgess. The Chair thanks the gentlelady.
    Mr. Harris, you are recognized for 5 minutes for an opening 
statement, please.

                 STATEMENT OF ROBERT F. HARRIS

    Mr. Harris. Good morning, Dr. Burgess, chairman of this 
committee, Ranking Member Congresswoman Schakowsky, and members 
of the Commerce, Manufacturing, and Trade Subcommittee.
    My name is Robert Harris, and I am a lawyer, and I am the 
Cook County Public Guardian in Chicago. I was appointed in 2004 
by the Chief Judge of the Circuit Court of Cook County to act 
as the guardian for people with Alzheimer's and dementia.
    I am here today to discuss the issue confronting hundreds 
of people under my guardianship who have severe forms of 
dementia and Alzheimer's and have been financially exploited. 
My office serves approximately 600 people right now as the 
guardian of last resort for people without family or others to 
care for them. The average age is 72, the oldest is 103, and 
around 70 of them are over 90 years old. Our goal is to 
maintain them in their own homes or in a community setting. And 
for approximately one-third of those people, we are able to do 
so with their own assets.
    At this point, most of them have bought homes, saved money 
for their golden years. Unfortunately, there are people who 
view them as potential victims. And the problem is so 
widespread that at least a third of our intake cases have some 
form of financial exploitation. It doesn't matter if they have 
large estates worth over a million dollars or if they simply 
have a house that is worth $25,000.
    Another unfortunate fact is the exploiters can be anyone. 
Family members, agents acting under their power of attorney, 
bank tellers, attorneys, clergy, caregivers, long-time friends. 
We have had cases involving police officers, and strangers and 
others who either have or obtain a position of trust for the 
elderly victims.
    To combat and recover assets, stolen from the people we 
serve, we do several things. We work with law enforcement, 
adult protective service agencies, and fraud protection 
departments of financial institutions. We work with the media 
to shed light on the problem within the public, and we speak at 
various community organizations to educate their constituents 
about the problem.
    One of our strongest and chief tools that we use is 
development of a financial recovery unit that we call FRU. We 
have three full-time attorneys who file citation actions 
pursuant to the Illinois Probate Act and other causes of action 
to recover stolen, converted, embezzled, or concealed assets. 
Over the past 10 years that we have worked on this particular 
issue, the unit has recovered almost $50 million in money, 
houses, and other properties for the people under my 
guardianship to be able to use for their care to maintain them 
in the community.
    The types of scams that we see include, executing 
fraudulent deeds, unduly influencing the elderly individual to 
sign of over their property, or using a power of attorney to 
empty their bank accounts. The almost $50 million that we have 
recovered for people under my guardianship is just the tip of 
the iceberg. And I am sure that it is only a tiny fraction of 
the money that individuals have been exploited of, in and 
around Chicago.
    Some of our suggested solutions are, to help local 
Governments establish offices such as mine, or legal clinics to 
establish practices that help people who have been exploited. 
Whether they come into the court system or whether they simply 
need help and aren't involved in a Probate Court case.
    Educate seniors in the public regarding the dangers of 
financial exploitation through community organizations, and 
places of worship and community centers, and resources that 
might be available to them. To utilize organizations like the 
National Guardianship Association to play an important role by 
promoting standards best practices for guardians and probate 
courts, by providing education and training and provide 
advocacy on the issue that impact seniors including elder use 
and financial exploitation.
    Develop court systems and processes that don't work against 
seniors and consider the urgency of time for the elderly, such 
as the probate and the Elder Lawyer and Miscellaneous Remedies 
Courts in Chicago. Because many exploiters simply try to wait 
out the life span of the elderly victims.
    You have the written materials that I have submitted that 
are premised in large part on an article that my Deputy Public 
Guardian, Charles Golbert, wrote for Van der Plas Publishers, 
and I would be happy to share our experiences with individual 
cases.
    [The prepared statement of Mr. Harris follows:]
    
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    Mr. Burgess. The gentleman yields back. The Chair thanks 
the gentleman.
    And thanks all of our witnesses for your testimony. And we 
will move into our question portion of the hearing. I will 
begin the questioning by recognizing myself for 5 minutes.
    Mr. Harris, I just have to ask you, and, I mean, I learn so 
much in this subcommittee. A fraudulent deed? What happens with 
that? Someone comes door to door and says: I will sell you some 
property?
    Mr. Harris. Well, no, actually what they do sometimes is 
they do quitclaim deeds from the person, the elderly person. 
They forge those deeds, write their own names in, or deed it to 
a third party. And then they record it against the property. 
And sometimes those elderly people never know about the crime, 
and then one day someone shows up and they no longer own their 
homes.
    Mr. Burgess. Someone has purchased the home?
    Mr. Harris. Actually, they have not purchased the home, 
they have just developed a deed and recorded it against their 
property.
    Mr. Burgess. And you are able to intervene on behalf of 
that person?
    Mr. Harris. Oh, yes. Well, what happens is, if a case is 
referred to our office and the person qualifies, first of all, 
they have to have a cognitive impairment that is severe enough 
to qualify for our services, we would file something like a 
citation action to recover their property that has been 
wrongfully taken from them.
    Mr. Burgess. Are there other people within your county who 
would, if someone wasn't suffering from a cognitive impairment, 
where that could be remedied?
    Mr. Harris. Yes. There is a Legal Assistance Foundation 
that we have in Chicago that also have a fraud department, and 
there are a couple of attorneys that work on cases for people 
who don't have guardians. Sometimes they are referred to us if 
there is a need for a guardian. But often they just have people 
that walk in.
    But the office is very small. And one of the biggest issues 
I think that we are confronted with are not just on the deed, 
the fraudulent deed cases, but some of the people that we work 
with make the worst witnesses because of their cognitive 
impairment, whether this is severe or not. And so they need 
more help. Sometimes these are very intensive, document-
intensive, financial-intensive cases that requires a lot of 
work and detail.
    Mr. Burgess. Thank you.
    Mr. Kaufmann, thank you for being here this morning. And 
certainly I want to thank the FTC for always been willing to 
come and talk to our subcommittee and having us over to your 
offices earlier in the year, and having me to your regional 
offices down in Dallas, and that was all very helpful and I 
have learned about a number of resources that are available.
    Let me just ask you a question about your involvement when 
you have a foreign agency involved, a telemarketing scheme, 
something called the Jamaican Lottery, which I am not sure I 
understand what it is, but what enforcement tools do you have 
to be able to put a stop to these practices, and what have you 
learned about multijurisdictional enforcement?
    Mr. Kaufman. Thank you for the question. Multi-
jurisdictional enforcement is challenging. There are 
impediments when fraud is emanating from overseas to the United 
States. The tools that this committee have given us is the U.S. 
Safe Web Act have provided assistance, but we have also worked 
closely and built stronger relationships with law enforcement 
authorities in other countries, in Canada, in the United 
Kingdom.
    If we talk about Jamaica, we have seen a lot of prize and 
lottery scams in particular emanating from Jamaica. And we have 
a specific group who are involved in called JOLT, which is a 
number of law enforcement agencies in the United States and 
Jamaican authorities to help assist the Jamaicans in 
prosecuting these kind of cases there, as well as prosecuting 
cases in the United States. But there are challenges with these 
issues.
    Mr. Burgess. Let me ask both you and Ms. Canan, what do you 
have at your disposal for spotting trends so that you might 
anticipate if something is happening in one location that it 
might metastasize or migrate to another location? Are there 
tools that you have where you can keep track of things that are 
popping up on the radar screen?
    Mr. Kaufman. Absolutely. Our primary tool, I would say, is 
our Consumer Sentinel Database. We get complaints from many 
consumers. We also get complaints from many other law 
enforcement agencies and entities such as the Better Business 
Bureau, and we routinely track, analyze, and look for trends 
and look for increasing spikes in order to find targets to 
pursue.
    Mr. Burgess. And Ms. Canan, at the CFPB?
    Ms. Canan. Yes. And I mentioned in my testimony that we 
have a consumer response department where we accept complaints 
from consumers. And our office, the Office for Older Americans, 
we look at the complaints that are submitted by and on behalf 
of older consumers routinely and look for trends and spikes as 
well.
    Some of the, you know, the information that we cull from 
the complaints, if appropriate, we send to our enforcement 
division. We also will develop education materials, depending 
on what we find.
    Mr. Burgess. Well, part of the purpose of having this 
hearing, or course, is the expository nature of the services 
that you all have. I will tell you, as a regular guy, when I 
was caring for my parents as they aged, I had no idea about the 
types of services that were available, nor would I have been 
completely cognizant of the risks that were out there.
    And looking back on 10 or 15 years ago, I realize there 
were probably some near misses. But I really hope what this 
subcommittee hearing does today is make people, number one, 
aware of the problem, and, number two, aware of where they can 
go for help if they think they have been victimized.
    I yield now to the gentlelady from Illinois, the ranking 
member of the subcommittee.
    Ms. Schakowsky. Thank you, Mr. Chairman, and I appreciate 
your last comment. And hopefully we really can work together to 
drill down on this.
    I wanted to ask Mr. Harris a question. You said that you 
are guardian for 600 people. How do those people get to you? 
How does that happen?
    Mr. Harris. We often have referrals from judges. A senior 
will come into a housing court and have an issue, and we will 
be called by a judge. Law enforcement. We have had referrals 
from banking institutions as well. Neighbors. All sorts of 
people.
    Ms. Schakowsky. So would you estimate that there are a lot 
of people out there who do not have the benefit of your 
guardianship?
    Mr. Harris. Yes. I do. A lot of people who either are 
fearful, and there is a lot of people out there that are 
fearful even to call our office, because they believe that the 
Government stepping in is going to be a bad thing for them.
    So I think that if there is an appropriate person out 
there, a friend or a family member that can help them, I think 
that is always the preferable way to go. But I think we do 
offer some services that specifically are FRU unit that is able 
to help people that is unlike probably any other organization 
in our city and our State.
    Ms. Schakowsky. You had said that a third of the people, so 
that would be about 200 of those, are victims of some form of 
exploitation, financial exploitation. Did you say by families?
    Mr. Harris. By family members. But often it is a lot of 
other people. There is a lot of strangers that do it, but there 
is a lot of people that hold great positions of trust that end 
up doing it, and unfortunately it can be a family member.
    Ms. Schakowsky. Yes. I am wondering if you could describe 
some of the types of financial exploitation that seniors under 
your care have experienced.
    Mr. Harris. Sure. I remember a young lady--young lady to 
me. She is older, but she is still young in spirit--who was 
exploited by a woman who styled herself as her personal banker. 
She would go to the same bank, downtown Chicago, large banking 
institution, for years. She worked for R.R. Donnelley, which 
used to be a company that produced books and other things in 
the city. And she and her husband had amassed a small about of 
money, about $300,000. This person, she befriended her, would 
sit down with her every time she came into the bank. She 
started to rely on her to write checks for her bills, and she 
ended up taking about $300,000 from her. The bank called us, 
and we ultimately, after a little contentiousness, we 
ultimately were able to recover the money from her.
    But we have also had people who have been exploited who 
have gone to the hospital. Elderly gentleman, 90 years old, who 
had gone to the hospital, met a CNA at the hospital, who ended 
up volunteering to become his caregiver, who then stole about 
$500,000 from him. Those are just some of the cases. We have 
had all kinds of cases similar to that.
    Ms. Schakowsky. You know, some of these are so personal. 
And I think--I don't know if all of you have, but I know Mr. 
Kaufmann and I think Ms. Canan also said, a lot of people don't 
report it. And I would think when families are involved that it 
becomes even more difficult. How can we--maybe this is for all 
of you--encourage people to protect themselves to actually 
report when family or a former trusted friend has clearly 
exploited them? How do we break through that?
    Mr. Kaufman. Sure. I think a couple things. First, we would 
obviously love to have the committee members providing 
information on their Web sits and to their constituents about 
the resources we provide. It is very important to help us get 
the word out, and we would like the committee to assist us.
    For us, our campaign Pass It On is premised on the notion 
that it is senior citizens helping other senior citizens and 
spreading the word out, and not being ashamed to talk about 
frauds that have happened, and to protect each other. So that 
has been the focus of our consumer education, is sort of 
breaking that barrier and getting seniors to talk about it with 
each other.
    Ms. Schakowsky. Let me ask you--did you have something, Ms. 
Canan?
    Ms. Canan. Well, I was just going to say that similar to 
the FTC, we are out and about and encouraging the reporting of 
abuse. It is something that really needs almost a mass media 
attention to.
    We have the Money Smart for Older Adults, train the trainer 
program that we are out and about, and with intermediaries 
training people constantly about how to spot and intervene and 
report when fraud is observed.
    Ms. Schakowsky. Do you partner with senior citizen 
organizations like AARP and----
    Ms. Canan. Yes. So we are a very small office with 57 
million constituents. So the only way that we could effectively 
do our job is if we connect with service providers, State, 
local government entities, other Federal partners in order to--
you know, with organizations that are on the ground providing 
services to seniors. And many of them will engage in the Money 
Smart training for their clientele.
    Ms. Schakowsky. Mr. Chairman, can I ask one short question 
in addition?
    I wondered, Mr. Harris, does the State attorney general 
have any role in helping your office with financial 
exploitation?
    Mr. Harris. Yes. In terms of some of the bigger cases, 
people who do systemic exploitive things, they do get involved, 
file lawsuits, as does the U.S. Attorney's Office as well.
    I have to say that to me one of the biggest tools that we 
can use, is to get to the smaller community groups, to go to 
churches, to go to synagogues, to go to other places. We work 
with a small agency on the West Side of Chicago called South 
Austin Coalition. And they, you know, they know the people. 
They bring folks like myself in, and these two people here from 
their organizations to come and talk to the various smaller 
groups. I have generated certain cases where we have been able 
to help people from those groups.
    Because I am not sure how much some of the folks on the 
West Side, the South Side and some of the North Sides of 
Chicago are looking at like bigger media attention on something 
like that or reading some of the brochures that are really 
geared toward helping the seniors. So it is as simple as you 
can get it and as grass roots as you can get it. I think that 
is probably the most effective tool that I have seen, to help.
    Ms. Schakowsky. Let me just say I would really like to meet 
further with all of you and talk about ways that we can partner 
on this. And I look forward to the committee following up on 
this. Thank you.
    I yield back.
    Mr. Burgess. The Chair thanks the gentlelady. Gentlelady 
yields back.
    The Chair recognizes the vice chairman of the subcommittee, 
Mr. Lance from New Jersey, 5 minutes for your questions, 
please.
    Mr. Lance. Thank you, Mr. Chairman. And my thanks to all 
the distinguished panel for being here.
    I hear from constituents all the time about being bombarded 
with robocalls from scammers who have spoofed their phone 
numbers to look like a local call or like a State or Federal 
agency in order to scam them out of personal and financial 
information. Indeed, yesterday my wife received such a call in 
New Jersey. Someone claiming that we were in arrears with the 
Internal Revenue Service. And she chose quite appropriately not 
to return the telephone call. She telephoned me, and our office 
looked into the telephone number, and it was a someone who was 
scamming constituents, I would imagine, across the country.
    I have introduced a bill with Grace Meng of New York City, 
from the Great Borough of Queens in New York City, a Democrat, 
and Chairman Emeritus Barton of this committee, called the 
Anti-Spoofing Act of 2015, and I would encourage colleagues to 
examine that bill, and it would target caller ID spoofing and 
specifically expand protections of the Communications Act of 
1934 to include spoofed text messages and voice over IP calls.
    Mr. Kaufmann, the FTC runs a do-not-call list. Would you 
please explain in detail, what my constituents and others who 
are on the list, should do if they believe they are being 
called by scammers or organizations in violation of FTC 
protection?
    Mr. Kaufman. Sure. Thank you for the question. Robocalls 
are a huge challenge. The first word of advice we provide to 
consumers if you receive one, hang up. Don't provide any 
information. Just hang up.
    Mr. Lance. Yes. I hope those who are viewing this hearing 
will take that to heart. Do not respond to such a call.
    Mr. Kaufman. The technology issues are challenging, and it 
has become very inexpensive to blast millions upon millions of 
phone calls. You know, we are bringing law enforcement actions, 
but the cases are challenging. The caller IDs are spoofed. It 
makes finding the perpetrators pretty challenging.
    One thing we have done at the FTC that is pretty innovative 
is, we have issued a number of different public challenges, to 
get people in the technology community interested in the issue 
of robocalls, in helping to figure out ways to block calls. We 
have had four separate events that have been successful, and it 
is something we are continuing to pursue. We also, again, hang 
up on the calls, get yourself on the do-not-call list, and we 
continue to work hard in this area.
    Mr. Lance. Thank you. In one of the counties I represent in 
New Jersey, residents were being telephoned by those who 
claimed to be from the county sheriff's office. This is clearly 
inaccurate, fraudulent, and the sheriff of that county, the 
sheriff of Somerset County, New Jersey has taken appropriate 
action. But this happens quite frequently.
    How do the FTC and the FCC coordinate to combat these 
scams?
    Mr. Kaufman. We coordinate quite well with them. We have 
frequent phone calls. We are careful that we are not 
overlapping in terms of the law enforcement actions. And we try 
to harmonize our processes and our implementation as well as we 
can.
    Mr. Lance. Thank you.
    Mr. Harris, I am interested in your office. I do not know 
much about it. As I understand it, you are appointed by the 
chief judge of the circuit Court of Cook County. Is that 
accurate?
    Mr. Harris. That is correct.
    Mr. Lance. And is that true in all of the counties in 
Illinois, or only in Cook County with several million people?
    Mr. Harris. Actually, it is only in Cook County that there 
is a public guardian like myself. The other public guardians 
are appointed by the Governor.
    Mr. Lance. By the Governor in the various counties, or are 
there jurisdictions?
    Mr. Harris. It would be in the various counties, which 
becomes a problem sometimes in downstate because some of the 
counties are so small.
    Mr. Lance. Yes. Yes. And then do you report to the Circuit 
Court of Cook County? How does that work?
    Mr. Harris. Yes. I act under the auspices--obviously I am 
an appointed person on each one of my cases, and so we have to 
report to the court on an annual basis. We file inventories. We 
also file a yearly accounting and kind of a goings-on of the 
wards. Kind of a social on what we have done with the wards. We 
also file a yearly annual report with the Cook County 
commissioners.
    Mr. Lance. Thank you. Well, very good luck with your 
continued work. It is certainly a matter of strong public 
policy as well as the other members of the panel.
    I yield back the balance of my time.
    Mr. Burgess. The gentleman yields back. The Chair thanks 
the gentleman.
    The Chair recognizes the other gentleman from New Jersey, 
the ranking member of the full committee, Mr. Pallone, 5 
minutes for your questions, please.
    Mr. Pallone. Thank you, Mr. Chairman.
    I wanted to ask Mr. Kaufmann, a variety of consumer scams 
emerge during tax filing season, one of which is a phone call 
from a person who falsely claims to represent the IRS. I think 
that is what my colleague----
    Mr. Lance. Would the ranking member yield for a moment? 
This happened to me personally, my wife personally, yesterday. 
Yesterday.
    Mr. Pallone. I thought you were saying that when I walked 
in, but I wasn't sure. Thanks.
    So, you know, this person threatens the victim with arrest, 
deportation, or suspension of a license if an amount of money 
is not paid immediately. And these scammers are very aggressive 
and may use personal information about the victim to seem 
legitimate. And it definitely has affected many constituents in 
my district. I mean, I am not making this up. People have, 
including seniors, one of whom was recently threatened with a 
home foreclosure if they didn't pay a specified amount.
    So, Mr. Kaufman, I would like my constituents to be 
prepared when they receive a phone call from an IRS imposter. 
Can you confirm that an actual IRS agent would never call to 
demand immediate payment, ask for credit or debit card numbers 
over the phone or threaten arrest for not paying?
    Mr. Kaufman. Yes. I can absolutely confirm that. Those are 
imposter scams and consumers should hang up and not provide any 
information.
    Mr. Pallone. All right. I appreciate that. I am probably 
going to repeat what you just said, just so we don't--you know, 
so people understand that in my district.
    I wanted to ask also about reporting incidents of elderly 
fraud. Many consider financial exploitation to be a silent 
crime because victims are often too ashamed or embarrassed to 
report what has happened. Additionally, it can be challenging 
for many seniors to serve as a criminal witness, and law 
enforcement officials regularly identify lack of reporting and 
the difficulty obtaining relevant data as challenges to both 
identity and to combat elder financial exploitation.
    So, Mr. Kaufman, can you explain the role the Consumer 
Sentinel Network Database plays in combatting senior financial 
exploitation? Are there any challenges the FTC faces with 
respect to the database, and what steps need to be taken to 
increase both the use of the database and reporting of senior 
financial exploitation in general?
    Mr. Kaufman. The database is a very important tool for law 
enforcement agencies, and we continue to develop it and improve 
it. We have some enhancements in the works right now. But it 
really is a tool for law enforcement agencies throughout the 
country to have access to our millions of customer complaints, 
and to look for trends and to look for specific areas they 
might be interested in. It has been a very effective tool and 
many of our cases--many, many of our cases have originated from 
complaints that we have received and that are in our Consumer 
Sentinel database.
    Mr. Pallone. OK. Let me ask Ms. Canan, can you give us an 
update on the Consumer Complaint Database at the CFPB, how many 
complaints do you receive, what types of fraud are you seeing, 
and how has this information been useful to you in developing 
policy proposals?
    Ms. Canan. Well, I will say that we know that there have 
been in excess of 63,000 complaints that have been submitted by 
consumers 62 and older, since we began accepting complaints. 
What we do is we cull through them. We look at them to see how 
older consumers are faring in the marketplace. We know from 
looking at the complaints that there are many older consumers 
who are having difficulties with their mortgages and with debt 
collection. Those are the two largest areas that older 
consumers are complaining about. Which, by the way, is not 
unlike their younger counterparts. There is often a 
misconception that older consumers are not engaged fully in the 
marketplace. That simply is not true. And that is borne out by 
the complaints that we see.
    Our consumer response section for complaints, of course, is 
focused on consumer products and services which is what the 
bureau focuses on. However, consumers also add narratives into 
their complaints, and we have the opportunity to find instances 
of financial exploitation, of stories that are related to that, 
in the complaints as well.
    Mr. Pallone. All right. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Burgess. The Chair thanks the gentleman. The gentleman 
yields back.
    The Chair recognizes the gentleman from Mississippi, Mr. 
Harper, 5 minutes for questions, please.
    Mr. Harper. Thank you, Mr. Chairman, and thanks to each of 
you for being here. And we certainly have a lot of issues that 
need to be discussed.
    I know this will come as a surprise, but we do some 
bipartisan work on occasion. So I, along with Representative 
Castor, have introduced legislation in July, H.R. 3099, the 
Raise Family Caregivers Act, which would implement the 
bipartisan recommendation of the Federal Commission on Long-
Term Care that Congress require the development of a national 
strategy to support family caregivers, similar in scope to the 
national strategy developed to address Alzheimer's disease.
    The bipartisan legislation would require the development, 
maintenance, and updating of an integrated national strategy to 
recognize and support family caregivers. I think this is an 
underreported issue. Unless you are living in the middle of it, 
a lot of people don't understand what is going through. My 
motheris almost 92. We are going through issues with sitters 
and ourselves trying to take care of her and deal with those 
issues. And it is a difficult problem for a lot of families.
    And we deal with constant--and I can just tell from 
personal experience, for a number of years we had phone calls, 
you know, credit card offers, switch your credit card over 
here, do this, change your phone service to the cable. And then 
you don't like that and you can change back and we would lose 
her phone number. So we finally were able to get to the point, 
and hopefully this would be something to do to help the 
families that are doing this is to tell that person to say: I 
won't do anything until you talk to so and so, my son, my 
daughter, my trusted family member. And those things, you know, 
sometimes will help.
    But this is a question for Mr. Kaufmann and Ms. Canan as 
well. I am interested in whether your agencies have focused on 
the caregiver's role in protecting the elderly from fraud. And 
you mentioned some, but do you have particular educational 
materials or guides for these caregivers and others in a 
fiduciary position to seniors, and how are lawyers and 
financial institutions dealing with the risk of fraud against 
their elderly clients? Mr. Kaufmann.
    Mr. Kaufman. Sure. At the FTC we have a wide range of 
consumer materials available. We have got materials that are 
focused specifically, 14 years, our Pass It On campaign has 
been highly effective for seniors. But I think the CFPB has 
more materials on specifically caregivers and financial 
institutions of that nature. So I think I might defer to my 
colleague here.
    Mr. Harper. Miss Canan.
    Ms. Canan. Thank you. Excuse me.
    Mr. Harper. Take your time.
    Ms. Canan. I am actually very happy to have this 
opportunity to tell you about one of our very popular 
publications, which we call Managing Someone Else's Money. 
These are how-to user friendly guides, for non-professional 
fiduciaries. People who are taking care of the financial 
matters for a family member or a friend. And it includes 
information that helps the lay fiduciary know what his or her 
responsibilities and duties are. So, in other words, if you are 
caring for someone and you have access to their money, it is 
not OK to buy a car with those funds. Simple things like that 
which should be known, but unfortunately sometimes there is 
some confusion.
    In addition, in these guides we include information about 
how to spot scams and frauds and what you can do to protect the 
person who you are caring for as a financial caregiver.
    We have these national guides we are just in the process of 
embarking on rolling out State specific guides, including a 
template which would allow States to do their own as well.
    Mr. Harper. OK. You mention you had 63,000 complaints 
involving people 62 years of age and older. You mentioned 
mortgage related, debt, you know, collection. Of course we have 
the Federal Fair Debt Collection Practices Act that deals with 
a lot of that. So of that 63,000, you are not saying that all 
63,000 were fraud, you are just saying those were complaints 
that were registered. Correct?
    Ms. Canan. Correct. That is correct.
    Mr. Harper. All right. If in the time that I have for both 
you, Mr. Kaufmann, and Ms. Canan as well, I am certainly very 
interested in the cross-agency initiatives that protect seniors 
from fraud, abuse, neglect and exploitation.
    Would you both very quickly discuss your work with the 
Elder Justice Coordinating Council housed at the Department of 
Health and Human Services, whether the council's efforts have 
been constructed towards your agency's efforts, and what do you 
think could be improved?if I may be allowed to continue, Mr. 
Chairman, to an answer on that or----
    Mr. Burgess. Proceed.
    Mr. Harper. OK. Thank you.
    Mr. Kaufman. We are members of the council. We have 
participated in a number of events. We have partnered with 
organizations throughout the country, senior organizations. We 
found it to be an effective tool for sharing information with 
other law enforcement agencies. And I can't think of any 
improvements at the moment.
    Mr. Harper. Thank you.
    Ms. Canan. Yes. So we are one of the 11 Federal agencies. 
We have been very active in participating in the Elder Justice 
coordinating Council. We too find it very helpful for 
coordinating our actions. You know, each agency brings to the 
table different expertise in different jurisdictions. It is 
clearly a situation where we need all hands on deck and our 
work often will compliment those of our sister agencies.
    Mr. Harper. Thank you very much.
    I yield back.
    Mr. Burgess. The Chair thanks the gentleman. The gentleman 
yields back.
    The Chair recognizes the gentleman from Massachusetts, Mr. 
Kennedy, 5 minutes for questions, please.
    Mr. Kennedy. Thank you, Mr. Chairman. Appreciate it. Always 
a pleasure to hear you get Massachusetts out of the--as often 
as we possible can from our friends from Texas. So thank you 
very much.
    To the distinguished panel, thank you very much for being 
here. It is a pleasure to have you here. And I wanted to focus 
on an aspect of Medicare if we can.
    Their open enrollment period started on October 15 and runs 
through December 7. For the Nation's 54 million Medicare 
beneficiaries, this is an important time to consider changes to 
their health and drug plans. However, Medicare beneficiaries 
should be vigilant as this period also represents an 
opportunity for fraud.
    According to a recent article by U.S. News and World 
Report, a common request for Medicare scams is that a victim 
reveal their Medicare number. It is important that our seniors 
know how easy it is to spot these open enrollment scams.
    So, Mr. Kaufman, I would like to start with you, sir. I 
understand that the FTC won a victory in Federal Court last 
October after filing a complaint against a telemarketing scheme 
that was designed to trick and did trick seniors by pretending 
to be part of Medicare. Could you describe the specifics of 
that case and why that victory is so important for consumers?
    Mr. Kaufman. Sure. Thank you for acknowledging this case. 
It is a very important case. The entity was called Sun Bright. 
Telemarketers were claiming to be affiliated with Medicare. 
They falsely promised new cards for consumers and required 
people to provide their bank account numbers. They of course 
used those bank account numbers to withdrawal several hundred 
dollars from the consumers that were contacted.
    It is very consistent with the cases we have seen 
repeatedly where they are misrepresenting affiliations with 
Government entities or other entities in order to scam 
consumers out of their personal information and then out of 
their financial benefits.
    Mr. Kennedy. So how does the FTC then coordinate with CMS 
to prevent this type of fraud?
    Mr. Kaufman. We do work with them. We talk to them. We also 
issue alerts. When there are changes in health benefits that 
are publicly available, we know that the frauds will follow. 
That is one thing we have always seen at the FTC. When there is 
a new program, a new scare, frauds will always follow from it. 
So we will always issue alerts and scam alerts and blog about 
it.
    Mr. Kennedy. And just so everyone is clear, Mr. Kaufman, is 
it true that Medicare will never call or email seniors with 
products offered or for requests for their Medicare number?
    Mr. Kaufman. That is correct. And they will not ask for 
your bank account information in particular.
    Mr. Kennedy. And insurance agents are not allowed to visit 
your home to sell or endorse any Medicare product. Is that 
right?
    Mr. Kaufman. That is my understanding, but I would have to 
verify that and get back to you if that's OK.
    Mr. Kennedy. My understanding as well. But thank you. So 
what should consumers do if they or someone they know has 
received one of these fake Medicare solicitations?
    Mr. Kaufman. Hopefully they have not provided their 
information. If they have, they should contact their bank 
immediately and try to rectify the situation. They should also 
file a complaint with the FTC at ftc.gov/complaint.
    Mr. Kennedy. Great. Thank you very much sir. Any of the 
other witnesses have anything to add?
    With that I yield back.
    Ms. Schakowsky. I was just going to dig in my purse for my 
Medicare card. Every once in awhile we hear from people who say 
how come Social Security numbers are on the Medicare card? So 
it is in the wallets of everybody who is over 65, and we are 
told that it would be very cumbersome and costly to change 
that, but is that a bad idea? Either one of you can answer. It 
is right there. That is the number. So when we talk about 
Medicare number, it is a Social Security number.
    Mr. Burgess. Will the gentlelady yield on that point?
    Ms. Schakowsky. Yes.
    Mr. Burgess. And I am not sure about this, and I will to 
look into it for you, but I believe in the Medicare reform that 
we passed in March and April of this year, the removal of the 
Social Security card, that was one of the Ways and Means 
provisions that was added to the bill called MACRA that was 
passed earlier this year, the bill that repealed the 
sustainable growth rate formula. But I will find out about that 
because that was a weakness inherent in the system.
    Mr. Kaufman. But I very much agree with you. It is 
important that Social Security numbers not be shared or readily 
accessible or publicly displayed, but we would be glad to talk 
to you more about that issue.
    Ms. Schakowsky. OK. And maybe we did fix it. That is good.
    Mr. Burgess. Every now and then we fix something. The Chair 
thanks the gentlelady. The Chair recognizes the gentleman from 
Oklahoma, Mr. Mullin, for 5 minutes for questions.
    Mr. Mullin. I can honestly tell you I can't tell you what a 
card for Medicare looks like. I haven't got one. Anyways, thank 
you so much for being here.
    Something started happening to us about a month ago in our 
office which was very odd. We started getting people calling 
us, saying they had received a call from our office, pretending 
to be from our office to get personal information. And it 
worries me because their automatic trust that we have built 
with our constituents is getting phone calls from people 
supposedly being from our office.
    Now, I can imagine in business we use a rule that you only 
receive roughly around 1 percent of your actual complaints, and 
I would wonder if that factor would play true that I am only 
receiving about 1 percent of those that are receiving those 
calls. Now, is there an enforcement that--do we lack 
enforcement? Do we lack the ability to go after these 
individuals even if we get their information? What is the 
penalties for doing this? And Mr. Kaufmann or Ms. Canan, can 
one of you guys talk on that?
    Mr. Kaufman. We have definitely seen a rise in imposter 
scams. I have also received phone calls in my office from 
people who have been contacted by me who were not contacted by 
me. So it is definitely a prevalent scheme and fraud that is 
out there.
    The FTC is bringing actions when we can find the 
perpetrators. We are a civil law enforcement agency, so we can 
only bring civil actions. We also know criminal law enforcement 
is looking at it as well. But consumer education is a really 
important focus here.
    Mr. Mullin. Well, we talk about consumer education, but I 
will just use my grandparents for example. They are checked 
out. And I am not saying that in a bad way. My grandpa is Papa, 
he is 94 years old. Grandma is I think 89. They are not reading 
these manuals that come out. They are not getting online. They 
are not reading this stuff. We are talking about the most 
vulnerable. Ones that didn't grow up with the computers, one 
that has a cell phone but the numbers are this big on it. 
Information is for younger generations, not these other 
generations.
    Mr. Kaufman. Well I would encourage you to take a look at 
our Pass it On brochure. We have a one-pager on imposter scams. 
It is about three paragraphs long. It describes what the scams 
are, what they are trying to do, and what consumers should do. 
We researched with seniors to find out effective ways to 
communicate it.
    Mr. Mullin. Right. I get that, but what I am saying is, is 
there an enforcement problem here? Because it is growing. It is 
not going backwards, and obviously it is profitable or they 
wouldn't be doing it. So how can we help you on the enforcement 
side of it? There has to be someone knowing that if you do this 
there is a better chance you are going to get caught, not a 
very slim chance you are going to get caught.
    Mr. Kaufman. We continue to bring cases. There is always 
more that we can do. We are also getting more and more criminal 
law enforcement agencies interested. So I think the combination 
of the FTC working with other law enforcement agencies is 
starting to make a dent, but it is a problem.
    Mr. Mullin. Mr. Harris, I believe, if I understand it 
correctly, you guys have recovered roughly, is it $50 million 
in stolen assets?
    Mr. Harris. Yes.
    Mr. Mullin. What are your best tools? Maybe we can work 
together here, because if they were able to recover that out of 
one county, I am just floored.
    Mr. Harris. I think, you know, we too are a civil 
litigation organization, and for us the more practical thing is 
to get the money back because they need it. You know, the 
people we work with need it.
    I think that criminal enforcement is important. And when I 
first became public guardian almost 11 years ago, I think there 
was fewer criminal cases being brought against people, again 
because of problems with witnesses and recordkeeping and 
telling. But since then it has increased, the amount of 
litigation, both from the State's Attorney's office in Cook 
County as well as the U.S. Attorney's Office.
    Mr. Mullin. So, Mr. Harris, what I am trying to get to 
though, is what is the most effective tools you are using, to 
make that happen in one county, to recover $50 million?
    Mr. Harris. We largely work with the Probate Act, and there 
is a specific section of the Probate Act called the Citations 
Section in which we can recover properties that have been 
embezzled, stolen, concealed from wards. It is really just us 
lawyers doing our work and doing our job.
    Mr. Mullin. How do you find the people?
    Mr. Harris. We get referrals from all sources, from banks, 
from neighbors, from churches, from hospitals. And once we have 
an intake and if they qualify, then those are cases that we go 
after.
    Mr. Mullin. So really basically you have to just spend the 
time. You have got to be able to have the resources to be able 
to spend the time to go after and follow the lead----
    Mr. Harris. That is absolutely true. When I first became 
public guardian, we had one person working on it. Because of 
the growth in this area, we have added more resources, and I 
work on it and other people as well.
    Mr. Mullin. Mr. Harris, I appreciate it.
    And, Mr. Kaufman and Ms. Canan, I do appreciate what you 
are doing, but I really think we are going to have to step up 
the enforcement side of it. As I go back to say what I said 
earlier, we have got to make it to where they believe there is 
better chance they are going to get caught than a slim chance 
they are going to get caught.
    Mr. Chairman, I yield back.
    Mr. Burgess. The Chair thanks the gentleman. The Chair 
recognizes the gentlelady from Indiana, Mrs. Brooks, 5 minutes 
for your questions, please.
    Mrs. Brooks. In my home State of Indiana, our Attorney 
General is taking a lead in combatting fraud targeting seniors. 
Six years ago they launched a free senior consumer protection 
workshop that has actually traveled to all 92 counties in 
Indiana, and has reached over 2,000 elderly Hoosiers and their 
families. And I appreciate that we have to take a multilevel 
approach in working on this, whether it is the Federal, State, 
or local levels.
    And I do have to say that when you think about retirement 
security, and I talk about security a lot, and retirement 
security is part of that, when I am out talking with 
constituents, people often are embarrassed. They don't want to 
share if they have been scammed. And I appreciate the work that 
you all are doing. They don't want to share with their 
families. They don't want to share, they don't want to talk 
about it, and it might even take a while for them to realize 
it.
    I am a former U.S. attorney, and I am curious whether or 
not any U.S. attorney's offices, whether in the civil division 
or the criminal division, are engaged? I know they are on 
identity theft because that is something that we have been 
working on for a very, very long time, as the Justice 
Department has worked on it. I am curious whether or not any of 
you are working with any U.S. attorney's offices on any task 
forces, whether it is a civil division or a criminal division? 
This is for any of you.
    Mr. Kaufman. Sure. We work closely with a number of U.S. 
attorneys throughout the country. We have the Criminal Liaison 
Unit at the FTC. Although we lack criminal authority, we 
realize that a lot of our cases should be prosecuted 
criminally, and we provide referrals, leads, information to the 
Court, to criminal law enforcement.
    Indeed, since we started this program in 2003, well, over 
700 of our defendants have been prosecuted criminally on a 
variety of frauds, not just seniors.
    Mrs. Brooks. Right. OK. Terrific. Mrs. Canan?
    Ms. Canan. So I am in the consumer education division in 
the bureau, and I would have to get back to you regarding 
whether our enforcement teams are engaged with U.S. attorneys. 
I suspect that they are.
    I know that we are in frequent contact with the Department 
of Justice, and we have frequent communications with DAs around 
the country who are prosecuting elder exploitation and abuse.
    Mrs. Brooks. Terrific. Mr. Harris?
    Mr. Harris. In our small office we do work with the U.S. 
Attorney's Office. I think it is the relationships have 
developed over the years in working with cases. It has worked 
out very well. We have even worked with the postal inspectors 
on some cases as well.
    So I think it becomes for us, it becomes relationship 
building, and I think we have established that, at least in 
Chicago.
    Mrs. Brooks. OK. Thank you. Just with respect to your 
respective agencies, I am curious; how many people work on this 
specifically? How many FTEs, going back to my days in Justice. 
How FTEs are kind of focused on this?
    Mr. Kaufman. At the FTC we don't have our attorneys 
designated as working specifically on senior issues, so they 
are really spread throughout our Bureau. We have about 440 
people in the Bureau of Consumer Protection, working on a wide 
range of issues, but we have brought a number of cases 
affecting seniors, and it is an area of interest throughout our 
Bureau.
    Mrs. Brooks. Thank you. Ms. Canan?
    Ms. Canan. So our office is small. We are determined and 
dedicated, but we are small. We are under 10 full-time 
employees. But we have the benefit of being able to work with 
other divisions and offices throughout the Bureau.
    So, when we become aware of a particular problem where it 
appears that it may include violations of the law, we bring in 
other divisions that have the ability to engage in enforcement 
or supervision. We also have a market division and research 
division, too. So we are frequently working. So even though we 
are small, we have the benefit of being able to work with 
others around the Bureau.
    Mrs. Brooks. Thank you. Mr. Kaufman, when the FTC does, on 
those rare occasions when you recover the funds, how is it 
determined, how do you ensure that the victims ever receive the 
funds?
    Mr. Kaufman. That is always our first priority. If there is 
enough money to get back to consumers, we get customer lists, 
and we will do some sort of pro rata distribution. There are 
cases where we are very successful on that. There are cases 
where the funds are no longer available and we can't find them. 
But our number one priority--well, number one is stopping the 
conduct. Number two is getting money back to the consumers.
    Mrs. Brooks. How does that happen actually?
    Mr. Kaufman. We actually have a redress office in our 
Bureau that coordinates it. We have contractors we work with. 
Depending on the nature of the fraud, often we will have 
customer lists and we can just send out checks. Sometimes there 
might be a claims process. It varies depending upon how the 
consumers were defrauded and what information we have.
    Mrs. Brooks. OK. And just one last question if I might, Mr. 
Chairman. How do we make sure, Mr. Harris, when so many of 
these financial abuse go underreported, underrecognized, 
underprosecuted, what would you like for us to do?
    Mr. Harris. I think one of the things that is lacking are 
organizations like mine, not necessarily that do guardianship 
work, but that focus on recovering moneys on a local level for 
seniors. There is a lot of people we can't help, and if there 
is some way that the Federal Government can support legal 
assistance foundations, or other legal services, you know, for 
establishing attorneys in those offices that focus specifically 
on this area, I think that would be very helpful.
    Mrs. Brooks. Thank you all for your work. I yield back.
    Mr. Burgess. The Chair thanks the gentlelady. The 
gentlelady yields back. The Chair recognizes the gentleman from 
North Carolina, Mr. Butterfield, 5 minutes for questions, 
please.
    Mr. Butterfield. Thank you very much, Mr. Chairman, for 
convening this important hearing today, and thank you to the 
three witnesses, Mr. Kaufman, Ms. Canan, and Mr. Harris. Mr. 
Harris, I am not going to be able to get to you today, but 
these questions going to be directed to the other two. Please 
don't take that personally.
    But I know a little bit about the Cook County Public 
Guardian Program. It is one of the best in the Nation. What was 
your predecessor's name, the gentleman that was there before 
you.
    Mr. Harris. Patrick Murphy.
    Mr. Butterfield. Patrick Murphy, that was his name. My 
daughter, stepdaughter, Tracey Caveness Glass--don't get 
surprised, but that was my stepdaughter. She worked for Patrick 
for some years there in Chicago.
    I never heard of the Public Guardian Program until she went 
to work there, and I have the greatest amount of respect. So 
thank you for the work that you do.
    Mr. Harris. Thank you.
    Mr. Butterfield. The FTC recently created a program called 
Pass it On, in which the Commission reaches out to older 
Americans with information about avoiding common types of fraud 
by contacting them at places where they gather and interact, 
like libraries, clubs, and adult living facilities.
    And so Mr. Kaufman, let's start with you. Can you explain 
why that approach might be more effective at disseminating the 
antifraud information than, say, publishing the information on 
a Web site or even a mailer?
    Mr. Kaufman. Absolutely. We engaged in research before we 
instituted the Pass it On program. We met with seniors, we met 
with people who provide support with seniors. We discussed what 
is the best way to effectively communicate information in 
short, clear, concise information on specific topics. We have 
so far given way I think about 3 million copies of it to I 
think it is more than 8,000 different organizations around the 
country. So there is a lot of research and thinking that went 
through it, and we are going to issue additional aspects of it 
in the coming year.
    Mr. Butterfield. The Pass it On initiative seems to 
emphasize the importance of striking the right tone in 
educating seniors about potential fraudulent schemes that is 
respectful and nonjudgmental. Do you find that seniors, Mr. 
Kaufman, respond better to advice given to them by people of 
their own age, their own generation? How can the financial 
literacy community honor this preference going forward?
    Mr. Kaufman. Our research has shown that it is an effective 
tool. This is a campaign that we launched about a year ago. We 
are continuing to explore it, but it has shown effectiveness, 
and it has been very successful. We have gotten a lot of very 
positive feedback about the program. We will continue to 
monitor it and see how it can be modified and improved over 
time.
    Mr. Butterfield. And Ms. Canan, as someone who also 
promotes financial literacy, do you agree with this approach in 
general?
    Ms. Canan. Yes, we do. And we have very similar materials, 
or at least the type of materials that are written in plain 
language that are nonjudgmental, and we frequently will 
actually use the FTC's materials, its Pass it On materials, and 
we go to conferences together and share tables and distribute 
our materials jointly.
    Mr. Butterfield. All right. Finally, Mr. Chairman, the FTC 
conducted a workshop in October of last year that explored some 
of these issues, including how fraud affects different 
communities in different ways. Mr. Kaufman, what were some of 
the outcomes from this workshop in terms of the senior 
community? Do consumer groups and the industry know how to 
address the problems that are really, really unique?
    Mr. Kaufman. Yes. Our Every Community Initiative, we kicked 
it off about a year, year and a half ago. Actually Pass it On 
is one of the results of that. We realized we had experts on 
senior issues that provided information about best ways to 
reach seniors.
    We also focused on issues affecting Spanish-speaking 
Americans, African Americans, and that continues to be a very 
important issue for us. We are looking for law enforcement 
actions and targets where they are targeting specific 
populations, and we want to make sure that our law enforcement 
and our education programs reach all Americans.
    Mr. Butterfield. Very well said. And I thank all three of 
you. Mr. Chairman, I am going to set a record today. I have got 
to be in the Cannon Building in about 30 seconds, and so I am 
going to yield back. I yield back.
    Mr. Burgess. The Chair thanks the gentleman. The Chair 
recognizes the gentleman from Kentucky, Mr. Guthrie, 5 minutes 
for your questions, please.
    Mr. Guthrie. Thank you very much. I appreciate that. And 
thank you, Mr. Chairman. Thank you for being here. I have been 
in another hearing of the subcommittee of the same committee, 
so I apologize, I missed some of it. Mr. Kaufman and Ms. Canan, 
I want to ask you a couple questions on your regional offices. 
How involved are your regional offices in combatting fraud 
against the elderly?
    Mr. Kaufman. Our regional offices, we have eight throughout 
the country, are incredibly involved. They do a good deal of 
our litigation. They do a lot of our fraud work, and they also 
do a lot of outreach on the local level.
    So, actually our regional offices provide enormous benefits 
to the Bureau, and it is very important to us that they are 
there and they are on the ground and bringing actions and doing 
outreach.
    Mr. Guthrie. OK. Ms. Canan?
    Ms. Canan. So I may have to get back to you with more 
detailed information because I don't want to say anything that 
may be incorrect, but it is my understanding that our regional 
offices are mostly occupied by our examiners. We have a full 
team of examiners that are examining financial institutions.
    And nonetheless, in our headquarters we have a nationwide 
approach. And our enforcement actions are nationwide. Our 
consumer education engagement is nationwide as well.
    Mr. Guthrie. OK. Do either of you guys--it may not be as 
applicable to you, Ms. Canan, given the setup of your regional 
offices--but do either of your agencies measure engagement on 
this issue on a regional level to see if there are trends that 
either target or scam seniors in one area more than another?
    Ms. Canan. I will start. Yes, absolutely. So, we are 
frequently going through our consumer complaints, just as one 
example. And in the process of doing that, we look for 
geographical, you know, spikes in complaints and things of that 
sort. In addition we are frequently conferring with 
stakeholders that are nationwide around the country, having 
calls and hearing from people on the ground about particular 
problems that they are seeing.
    Mr. Guthrie. OK.
    Mr. Kaufman. And at the FTC we have hosted over the past 
few years, 30 different what we call Common Ground Conferences 
throughout the country. We get together law enforcers from 
other Federal agencies, local authorities, consumer 
organizations, and we have a daylong discussion of the issues 
that they are seeing. So it is a way for us to get more 
information to develop relationships and to keep abreast of 
trends that are happening.
    Mr. Guthrie. OK, thank you. And then also, Mr. Kaufman, 
actually Mr. Butterfield kind of went down the path I was going 
to go. I wanted to hear more about the Pass it On program, 
which I think you have explained well. You said you are going 
to be looking at the effectiveness of the Pass it On. I know 
you have other programs. How do you all measure the 
effectiveness? What do you all when do you a review of 
effectiveness?
    Mr. Kaufman. You know, it is challenging to measure 
effectiveness in fraud. That is something we wrestle with. We 
bring a lot of law enforcement. We do a lot of consumer 
education. Our materials seem to be popular. There is a high 
demand. We get a lot of requests for it. We have a lot of 
organizations that take our materials and just stamp their logo 
on it and use it, and we are delighted when they do that. We 
just want to get the message out.
    But measuring effectiveness is challenging. We keep 
bringing more cases, and that is one measure of our success. 
And thereceptiveness people have to our materials is one 
measure as well, but it is a challenge to precisely measure how 
effective are we being. We also, I will say, do a survey every 
year of one of our consumer education Web sites to see whether 
consumers are satisfied with it, and we have done quite well 
there as well.
    Mr. Guthrie. OK. A lot of times it is hard to measure the 
crime that you prevent from being committed. It is hard to 
define that. I understand that. Well thank you, and I will join 
Mr. Butterfield in yielding back time.
    Mr. Burgess. The Chair thanks the gentleman. The Chair 
recognizes the gentleman from Florida, Mr. Bilirakis, for 5 
minutes of questions.
    Mr. Bilirakis. Thank you, Mr. Chairman. I appreciate it, 
and I thank the panel for their testimony. Mr. Kaufman, in your 
testimony you state the importance of the FTC recognizing 
trends in fraud against the elderly as the population of older 
Americans continues to grow. As you may know, the census 
estimates that the number of seniors 65 and older will surpass 
Americans under age 18 for the first time. Actually we are 18 
years away from that, 2033.
    So what resources is the FTC putting toward following 
trends and fraud against the elderly, allocating resources to 
enforce against criminals targeting the elderly and educating 
seniors of the risks?
    Mr. Kaufman. It is a very important priority area for us. 
Our Consumer Sentinel database, which has millions of 
complaints, is an incredibly important tool for us. It is self-
reported information that we get at the FTC as well as other 
law enforcement agencies, the BBBs. They all share information, 
put it into this database, and we are very frequently analyzing 
it, looking for trends, and looking for developments. We are 
also continuing teaching more law enforcement and more 
outreach. It is a very important priority for us.
    Mr. Bilirakis. OK good. And I want to commend you. I have 
had several senior seminars in my area in central Florida, and 
you participated, the FTC has, and they have done a wonderful 
job.
    And maybe this question also is for Mr. Harris. Is there a 
line, maybe anonymous line, where someone, a friend of a loved 
one who is having trouble, and elderly person is having trouble 
or maybe has been taken advantage of where a person can call 
and report an incident?
    Mr. Kaufman. We collect complaints as ftc.gov/complaints, 
and we also have a toll-free number; it is 1-877-FTCHELP.
    Mr. Bilirakis. Very good. Sir, is there a number--I know 
that you do a wonderful job but most seniors do not qualify for 
your services. Do you refer some seniors to other programs 
where they can be helped? And also is there an anonymous line 
or maybe a 211--we have 211 in Florida--where a person can call 
and be made aware of some of these services?
    But specifically is there an anonymous line where maybe a 
friend of a loved one who is having difficulty can share those 
concerns with your particular program?
    Mr. Harris. With my office you can call our office directly 
at 312-603-0800, and we would refer you to either to an adult 
protective services agency that is monitored by the State of 
Illinois, or the City of Chicago, or you can call 311 quite 
frankly in Chicago and get help in that way as well.
    Mr. Bilirakis. What are the ways that you gather 
information with regard to maybe candidates that need your 
services?
    Mr. Harris. We talk to their medical providers, doctors. We 
also have some investigatory power to look at previous reports 
of adult abuse or exploitation of some of our wards. We also 
have some access to financial records, vis--vis an 
investigatory process if we opened it for an intake.
    We use subpoena power once we have a case that is opened 
and other legal tools like depositions and other discovery 
tools.
    Mr. Bilirakis. Very good. Thank you. And I will follow the 
trend and yield back my time. Thank you, Mr. Chairman.
    Mr. Burgess. The Chair thanks the gentleman. The Chair just 
does want to observe because questions did come up on Social 
Security numbers on Medicare cards, and that, indeed, was part 
of the law that was passed in April. My understanding, and I 
have got crack staff who are always watching me, and they 
provided me the information. I think it is within 4 years' 
time. It is an agreement between the Secretary of Health and 
Human Services and the Commissioner for Social Security, but 
that is a change that is coming. It is not going to be an 
immediate change. If anyone gets their Medicare card in the 
next couple of months, it may very well not have reflected that 
change, but it was passed by the House and Senate, signed into 
law by the President, so one of those times where things did 
work as intended.
    Seeing that there are no further Members wishing to ask 
questions for the first panel, I wanted to thank our witnesses 
for being here today. This will conclude our first panel, and 
we will take a 2-minute recess to set up for the second panel.
    [Recess.]
    Mr. Burgess. I want to welcome everyone back. Thank you for 
your patience and taking time to be here today. We will move 
into the second panel for today's hearing. We will follow the 
same format as the first panel. Each witness will be given 5 
minutes for an opening statement followed by a round of 
questions from Members.
    For our second panel, we want to welcome the following 
witnesses: Professor Charles Wallace, the Undergraduate Program 
Director For Computer Science at Michigan Technical University; 
and Ms. Tobie Stanger, Senior Editor for Consumer Reports. We 
appreciate both of you being here this morning. We will begin 
with you, Professor Wallace, and you are recognized for 5 
minutes for an opening statement, please.

   STATEMENTS OF CHARLES WALLACE, DIRECTOR OF UNDERGRADUATE 
 STUDIES, COMPUTER SCIENCE DEPARTMENT, MICHIGAN TECHNOLOGICAL 
 UNIVERSITY, AND TOBIE STANGER, SENIOR EDITOR, CONSUMER REPORTS

                  STATEMENT OF CHARLES WALLACE

    Mr. Wallace. Very well. Thank you, members of the 
subcommittee, for the opportunity to speak at this meeting. And 
the students in my discrete math course, who get the day off, 
also thank you.
    My name is Charles Wallace. I am Associate Professor of 
Computer Science at Michigan Technological University. Michigan 
Tech is a researched-focused university located in the upper 
Peninsula of Michigan with an emphasis on technology, 
engineering, and scientific degree programs.
    For the past 4 years, our Breaking Digital Barriers Group 
at Michigan Tech, has organized and participated in an ongoing 
outreach program in conjunction with the local public library 
called Online at the Library. It trains elderly residents of 
our rural community in digital literacy skills and exposes our 
students to the realities faced by digital non-natives.
    Through our experiences, we have identified recurring 
themes. Of these, the theme most germane to the current hearing 
is anxiety versus exploration. Lacking appropriate grounding in 
this new technology, our senior patrons alternate between naive 
trust and paralyzing suspicion, neither of which leads to 
comfortable, productive use. Our program addresses this problem 
by providing a safe place for learning among peers, interaction 
with mentors who model appropriate use, and develops a healthy 
balance between caution and exploration.
    Residents over age 65 constitute over 15 percent of the 
population of our rural area. Because of the larger-than-
average number of elders without family support, many of whom 
are below the poverty line, there is a strong need to help with 
digital literacy in this community. The experience of using a 
computing device is well known to cause anxiety in elders, and 
our experiences bear this out. Many learners are fearful of 
going online because of stories of fraud and identity theft 
they have heard in the media and experiences of relatives and 
friends.
    Without a basis of understanding for how malware and other 
threats work, they have no model for how to minimize their 
threat level. Anything can be a threat. So many learners fear 
using a computer altogether. One unfortunate consequence of 
this anxiety is the reluctance to explore. And for newcomers to 
a software product or service, this is a vital form of 
learning, exploration.
    To complicate matters further, in practice it is often far 
from clear whether a user is a victim of true criminals or 
simply aggressive businesses pushing a product. For example, 
Mitch, a 60-year-old recreational computer user runs a small 
service-based local business. He paid a company hundreds of 
dollars because they convinced him, after many hours on the 
phone, that his business needed to be on prioritized search 
lists through Google and Bing. However, Mitch did not know what 
the service was or how it helped his business, how he could 
access his accounts with the service, or where he would be able 
to see the effects of the service.
    After several months, he attended as a participant in the 
library help sessions and described his experience. Tutors 
determined after a lot of exploring and calling the company 
that sold the service to him, what the service does and 
explained to him what he had paid for. Mitch's business has no 
online presence, and being a local business, being searchable 
as an advertiser on search engines does not help him. In this 
case, Mitch was not a victim of fraud or theft strictly 
speaking but paid a legitimate business to help him without 
understanding the services he was paying for. It is clear that 
basic literacy and secure online behavior is an essential 
weapon in fighting fraud against the elderly.
    We believe that Online At the Library serves as an 
effective and replicable learning model, a safe place for 
learning, asking potentially embarrassing questions, and 
gaining strength from seeing peers in the same position, 
personal contact with mentors who can model appropriate 
behavior and attitudes. Development of healthy online behavior, 
finding a balance that keeps seniors safe without stifling 
their creativity and productive energy.
    Breaking Digital Barriers members are developing a 
sociotechnological approach to help older learners with 
strategies for navigating the Internet. This approach involves 
small interactive group learning activities, along with 
software tools to help them with navigation. Over the next 2 
years Breaking Digital Barriers will help similar learning 
programs around the upper Peninsula of Michigan and through the 
rest of Michigan. More information can be found at our Breaking 
Digital Barriers Web site at mtu.edu/bdb. Thank you.
    [The prepared statement of Mr. Wallace follows:]
    
    
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    Mr. Burgess. The Chair thanks the gentleman.
    Ms. Stanger, you are recognized for 5 minutes for 
questions, please.

                   STATEMENT OF TOBIE STANGER

    Ms. Stanger. Chairman Burgess, Ranking Member Schakowsky, 
committee members, thank you for inviting me to speak. My tame 
is Tobie Stanger. I am a Senior Editor at Consumer Reports. And 
I also represent today its advocacy arm, Consumer Union.
    You may wonder why Consumer Reporters, which is better 
known for rating products and cars, would highlight elder 
scams. Retirement security is at its core, a consumer issue. 
People have a right to expect that their hard-earned savings 
are protected. When I was asked to testify, I was a bit 
nervous, but then I thought about Edna Schmeets, an 86-year-old 
great-grandmother from Harvey, North Dakota, who had the 
courage to testify in Federal court earlier this year against a 
man from Jamaica who was part of a vast conspiracy to defraud 
dozens of people, mainly seniors, in a sweepstakes scam. Edna 
herself lost nearly $300,000, her life's savings.
    Most seniors would not be willing to talk, but Edna was 
angry and she wanted her money back. So in spite of being 
nervous and scared, she spoke out. Sadly, her money may never 
be returned, but she helped convict a really bad guy.
    Edna was one of eight victims who spoke for me for a recent 
article on elder scams that you mentioned that appeared in 
Consumer Reports. I am truly grateful for their willingness to 
have their names and portraits published. They told me they did 
it to warn other people so others might be spared. This isn't 
typical of elder scam victims. Most elder fraud cases go 
unreported. The victims are embarrassed and ashamed. Among 
other things, they are scared that if they tell, people will 
think they are unsophisticated or stupid or losing their 
cognitive abilities. But honestly, these scams can victimize 
anyone.
    The criminals catch people off guard. They sound very 
convincing. They require their victims to make very quick 
decisions, and they insist on secrecy. This is their job. They 
do it all day long. Their tactics could work on anyone in the 
right circumstances, but the scammers know that seniors, in 
part because they are proud and want to retain their dignity, 
often keep quiet, so we don't hear about these crimes as often 
as we should, and that is my point today.
    These scams are rampant. They are growing in number and 
complexity. They run the gamut from to sketchy phone and mail 
solicitations to shady contractors to dishonest financial 
advisers. We need to document them better, and seniors need to 
feel safe about speaking up about their victimization and 
getting help.
    Understandably, they are concerned about losing 
independence if they admit they have been taken or need help 
avoiding getting conned in the first place. But there are 
measures they can take that preserve their dignity and 
independence. For example, there is a Web-based service called 
EverSafe. The service identifies any unusual activity in a 
senior's account and then sends alerts to the senior or to a 
trusted adult child or other third party, but the senior 
doesn't have to allow direct access to the account, so the 
senior can retain control.
    Of course, Consumer Reports recommends signing up for the 
Federal Do Not Call Registry and the Direct Marketing 
Association's mail preference service to reduce unwanted calls 
and mail. We have also tested and recommended some call-
blocking machines that block robocalls which can be the basis 
of phone scams. Notably we found a free robocall blocking 
service called Nomorobo, and it is very effective; but it is 
not available on traditional land lines, which is what seniors 
often have. There is no reason why tools to block unwanted 
calls can't be made available on land lines, but the three top 
land-line providers don't offer them.
    So Consumers Union has an End Robocalls campaign that has 
gathered more than half a million petition signatures. We are 
soon going to deliver it to the phone companies to demand that 
free, more effective tools be offered.
    These developments can help stem elder scams, but they must 
be supplemented by communication and education. Elder financial 
exploitation needs to be part of the national conversation. We 
have published articles about it. Other publications have. But 
I would a lot of to see a Hollywood movie on this. It is a plot 
with poignant stories, heroic investigators and victims, piles 
of money, and even some exotic locations.
    Thankfully, some seniors are willing to speak out. There is 
an acting troupe in Los Angeles called the Stop Senior Scams 
Acting Program. The actors are all seniors. The oldest is 97. 
They write skits dramatizing scams, and they perform them in 
senior centers and other locations. Some of the actors 
themselves have been scam victims, so they can speak from 
experience. After performances, audience members often come up 
to them to report that they, too, have been scammed. These 
people might not be willing to tell their own families, but 
they will tell their peers.
    There is no dearth of creativity, initiative, and will, to 
make a dent in this horrific crime. But seniors themselves need 
to feel it is safe to talk about it with law enforcement, adult 
protective services, peers, and their families. As one of the 
actors in the Stop Senior Scams Program said, don't keep it a 
secret. You are not the only one. Thank you.
    [The statement of Ms. Stanger follows:]
    
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    Mr. Burgess. Thank you.
    And I thank both of you for your testimony. We will move 
into the question portion of the hearing. We will begin the 
questioning on this side. I will yield to Mr. Harper 5 minutes 
for questions, please.
    Mr. Harper. Thank you, Mr. Chairman, and thanks to you both 
for being here. Some great stories. I know your class is very 
excited today. They are probably watching as we speak, so we 
wish them well, just in case they are there.
    Ms. Stanger, you have spent obviously a significant amount 
of time putting together the Lies, Secrets, and Scams piece for 
Consumer Reports. What was the most shocking thing you learned 
while you were researching the article?
    Ms. Stanger. I think the most shocking thing is that it 
really is so rampant. It seems everywhere. Every person I 
turned to in the elder-justice community and adult protective 
services, when I would call them and say I was doing this, they 
would say, thank you. We need to have this publicized. Please. 
It is everywhere.
    In my own family with my husband and I together, we can 
think of four instances of various elder abuse situations. It 
is everywhere, and it is really underreported. It was very hard 
to get eight people to talk with me. It took a lot of effort, 
and I am very grateful for their bravery, because people are 
afraid to talk. And so the conversation, I think, needs to 
change to not being afraid.
    Mr. Harper. And it is so humiliating for them to have to 
share that, and they would rather just suffer in silence, so 
that does take a lot of courage to do that. I know dealing in 
the last year with a gentleman, a senior, who fell for one of 
the scams of, you know, ``send us some money and you are going 
to get a lot of money back.'' He was thinking, This will help 
me pay for my adult kids' graduate school, and I am going to 
take care of my wife, and we said don't do it, and he did it 
anyway, and he kept doing it to the tune of probably most of 
his savings, even though his wife--I don't know yet that he 
still has grasped what he has done.
    And it is a very difficult thing because when you have 
people that can't really control that, and fall prey to that, 
and they don't have someone overseeing, it is very difficult. I 
know in your article you talk about some of the great senior-
led initiatives to educate their peers about the fraud risk. 
Have you seen any similar initiatives to educate caregivers, 
and what experience with the caregivers to the seniors did you 
have in your research?
    Ms. Stanger. Well, I think the CFPB's program that they 
talked about where they have got several booklets to educate 
caregivers and people who have fiduciary duty over seniors' 
accounts, I think those are very helpful. Those are pretty new, 
and as I understand they are being promulgated in different 
States, so I think that is very helpful. But yes, I think 
caregivers need more education. That is something we can 
started to do in our publication.
    Clearly, I spoke with one woman who, exactly the same 
thing, her father and mother were involved in a scam, and she 
just did not know how to stop them. And so widespread education 
can be very useful. I found a victim specialist from the FBI in 
Los Angeles who people come to her when they have relatives who 
are repeat scam victims. And these are often the toughest 
because they have developed an emotional relationship with the 
scammer often, and they really trust them. And this woman from 
the FBI, she tells people call me. If somebody calls you, you 
call me, and I am going to walk you through this. I am going to 
keep you from getting scammed again. And sometimes it requires 
really, you know, hand-in-hand cooperation.
    Mr. Harper. And some of these, you will see that they will 
get into it. They will send them a few thousand dollars, and, 
well, we have got these additional costs over here we are going 
to have to cover, and all of a sudden they think, well, I am in 
this far and they keep going and going. And it is just 
heartbreaking what you see. But thanks for your work on that. 
And I really do appreciate it.
    Professor Wallace, in your testimony you talk about how in 
your experience you have seen a lot of anxiety about using 
technology, and very naive trust about technology that pose 
risks for consumers, and things are constantly moving as we 
see; and my adult daughter has, because I know we are on the 
record here, has quit using Facebook once my wife, her mom, 
started getting on Facebook.
    Mr. Wallace. Facebook is for old people.
    Mr. Harper. There you go. There you go. So we are seeing 
all this transition there. So what are the most effective 
methods you have found to teach seniors that they can be safe 
online without thinking they are going to break their device or 
trusting every single popup that comes through on the screen?
    Mr. Wallace. Yes. It is a tough problem. One thing that 
helps a lot is being among peers, and realizing that they are 
not alone and that other newcomers to the technology are 
struggling with the same kinds of issues.
    One exercise that we have done in the past that I think has 
been pretty effective, has been considering what they do with 
physical postal mail that they get, that looks suspicious. It 
has a certain smell to it, right? And you get something in the 
mail and you look at it and say, no, I am going to--I am going 
to throw this in the waste bin right.
    Mr. Harper. Professor Wallace, my time is long over. I am 
going to yield back and hopefully they can finish back up on 
this later.
    Mr. Wallace. Oh, OK. Sure. Sure.
    Mr. Harper. Thank you.
    Mr. Burgess. The Chair thanks the gentleman. The gentleman 
yields back. The Chair recognizes the gentlelady from Illinois, 
5 minutes for questions, please.
    Ms. Schakowsky. First, Ms. Stanger, during our first panel 
we talked about shame, and we have talked about it again in 
this panel. So I am wondering if there are tools, other than 
the individual having to report, that couldn't be more 
effective? In your article you mentioned several cases in which 
a bank allowed older people to repeatedly withdraw large 
amounts of money.
    And presumably when it was out of order for that particular 
person, and actually did nothing to investigate whether fraud 
was involved, and perhaps didn't even notify anybody, until the 
point at which the person attempted to get a loan from the 
bank. So what should be, or is being done, to encourage banks 
to take a more active role in intervening in these situations.
    Ms. Stanger. So I don't have that much information on this 
except that there are some banks that are making it part of 
their companywide effort, such as Wells Fargo, I understand, 
where they are educating everybody to be a reporter. Not every 
State has the same law, in terms of who is supposed to be a, 
you know, has to report when they think elder fraud is 
happening. It varies from State to State.
    There are companies themselves that are taking it upon 
themselves to do this. And I can't speak in great detail about 
what the bankers associations are doing, but there are some 
banks that are saying if you think there is something going on, 
you need to speak up right away and not wait until time goes 
by. But certainly more education at all levels from the 
teller--you know, the teller is often the person that sees the 
senior taking out the money, and it is a fine line between 
letting them have control over their money and putting up a red 
flag.
    We also think it is a good idea for family members to have 
a relationship with the local bank. Often seniors do go to 
local branches. I don't know how much they are doing their 
banking online, as opposed to other population groups, but 
often seniors go to the bank, especially if they are going to 
be taking out a large amount of money. They are going to go to 
the teller, and so it is a good idea for the families to have a 
relationship with the bank so that this kind of conversation 
can be had.
    Ms. Schakowsky. I have a feeling if that woman who was 
trying to help her son Will, purportedly in Peru and needing 
help, even if the teller would have said you are taking out a 
lot of money, that she might have shared that story. Oh, my 
grandson is in trouble, and I am trying to help him. It just 
seems like those kinds of conversations even could help. I 
don't know how one enforces that however.
    I have one other question for you and then for Professor 
Wallace. I think some people think that these might be small 
scam operations, but you pointed out that actually some of 
these are fairly big-time operators. I wonder if you could talk 
about that a little bit?
    Ms. Stanger. So we looked at something called the Jamaican 
lottery scam, which, you may have heard about. It operates not 
just out of Jamaica, but other foreign countries as well, Costa 
Rica, Israel, Canada, I think. This is where people are called, 
elderly people are called. The scammers have a list that they 
have collected. It may be because somebody has responded to 
something in the mail, and then they sent something back, their 
name, maybe a phone number, maybe even some money because they 
think they are going to be receiving something.
    And these lists are created, and these scammers get a hold 
of these lists, and they know now that this is somebody who has 
already responded once to a mailing. And so, then they will 
call these seniors, and they are very, very organized. They 
know how to get seniors' emotions. They know how to draw the 
senior in, and they often use threats, and these things go on 
for months and months, and people lose hundreds of thousands of 
dollars. So they are very organized.
    Ms. Schakowsky. Mr. Wallace, your testimony mentioned the 
Breaking Digital Barriers program at Michigan Tech, that could 
serve as a national model. What are some of the common themes 
that you observed in seniors that have taken that course, and 
do you believe these trends will be reflective of seniors 
nationwide?
    Mr. Wallace. Yes. Certainly the anxiety and the fear of 
adopting the technology is a profound one, and we need to 
balance this concern about fraud, which is absolutely 
legitimate, with something that encourages them to explore in a 
safe way.
    And so finding that balance is really a key issue for us. 
And we still struggle with it, but we are looking for metaphors 
and ways in which we can relate it to their life off line. What 
do you do to be sensible and safe and secure in your regular 
life? Can you transfer those kinds of skills over to the 
digital world? And so, that is one of the things that I think 
is certainly----
    Ms. Schakowsky. Although I do want to say that, the Pew 
Research Center reports 35 percent of Americans age 65 and 
older currently use social media, up 27 percent from 2014. So 
more and more people are. And in 2014, Pew reported 59 percent 
of this age group using the Internet, with 71 percent going on 
daily. So we are seeing more and more seniors.
    Mr. Wallace. For sure. And especially in our area, it is 
vital for them to go online because so many of their family 
members live far away now. And so it is a tremendous asset for 
them, really a lifeline in a way. So it is important for them 
to adopt this technology.
    Ms. Schakowsky. Thank you. I yield back.
    Mr. Burgess. Great. The gentlelady's time has expired. The 
gentlelady yields back. The Chair recognizes Mr. Mullin of 
Oklahoma, 5 minutes for your questions. Please.
    Mr. Mullin. Thank you, Mr. Chairman, and thank you both for 
being here. Professor Wallace, what gave you the idea to even 
start this up? Just taking a look at you, I am very impressed--
not by your looks--I am just very impressed by the idea that 
you would take this initiative. I mean, was this something 
driven by you, by your students, what made you even think of 
this?
    Mr. Wallace. One driving force is, the type of material 
that I teach to our students involves understanding users of 
the technology that they are developing. So our students are 
going to be developing the software that we all are going to be 
using in just a few years. I want them to understand what 
regular people are like and certainly people who don't have 
that kind of deep understanding of the technology that they do.
    Very often what happens is software people will develop 
software for other software people, and so we need to have a 
broader view of what the user base is going to be like. And by 
the way, one thing I want to insert here--I got a message from 
one of my colleagues in Breaking Digital Barriers--this is not 
exclusively a senior problem. Digital literacy is something 
that is a concern for people across age groups.
    We have worked with people who are, well they are younger 
than I am, so by definition, they are not old, who struggle 
with the technology, too. And so in general this is a larger 
issue that impacts seniors greatly, but I think we also need to 
keep in mind it is a broader issue.
    Mr. Mullin. Thank you for seeing a need. And then I am 
assuming that once you started down this path, it became a 
passion because the amount of work you have put into this, this 
wasn't just a class project. Did you get personally involved in 
it to some degree, surprisingly?
    Mr. Wallace. Yes. I think it is fair to say that everyone 
who has participated in it, students, faculty, really take a 
personal interest in it. And it is the kind of work that is so 
much fun that it doesn't feel like work.
    Apart from the learning that goes on in our sessions, it is 
also a social session, and it is a way for generations to meet 
and work together in a productive way. It is just a lot of fun.
    Mr. Mullin. Well, thank you. Ms., I hope I say this right, 
Stanger did I say that right?
    Ms. Stanger. Yes that is right.
    Mr. Mullin. Now, kind of the same question applies to you, 
too. The way I understand this wasn't exactly your background. 
You just started down this path, and one door opened to 
another, and now it has become almost a passion if I am seeing 
that right. Was there something that led you down this road?
    Ms. Stanger. Well, I would say number one, it is my 
passion. But I am a personal finance editor. I am a senior 
editor in personal finance at Consumer Reports. This is 
actually the second piece we have written on this.
    Two years ago we wrote more about scams, or I should say 
fraud committed by family members and people that the seniors 
know. This one is more about scams by strangers. But, yes, I 
feel very strongly about it.
    And Consumers Reports and Consumers Union, retirement 
security is very important to us. I write on all sorts of 
retirement issues, so I am very interested. But you can't help 
when you speak to these seniors, even one or two of them, you 
have to get drawn in because it is just, it is heartbreaking, 
and there is so much that we can do, I think.
    Mr. Mullin. If you could pick maybe two things that you 
would like to see for, maybe there has to be a required 
personal interaction, there has to be something signed before 
you could do it, what would you give this panel or this 
hearing, what would you give us two suggestions to say, hey, 
work on this?
    Ms. Stanger. Believe it or not, I think this Stop Senior 
Scams dramatic group was very impressive, the only one I know 
of in the country. And I don't think it is particularly 
difficult to fund a little theatre group in all communities in 
the country where they could be communicating to each other. 
This is senior to senior. It gets the actors themselves out of 
the house.
    You know, isolation is a major part of this. Getting people 
out, getting people into the community to talk to each other is 
very important, and there is that communication. So that is, I 
just think dealing at a grass-roots level can really make a 
difference, and I think that was reflected in many other of the 
statements.
    What else? I think just supporting the work, I think the 
FTC is doing some wonderful work. The Pass it On really is a 
very useful and, again, grass-roots effort, and I think the, 
CFPB's, specifically collection of anecdotes from people is 
very helpful. Obviously they don't always know what the age is, 
I think, am I right that they don't collect the ages of all the 
people who report, but certainly if people are reporting about 
problems with reverse mortgages, they know that is somebody 62 
and older.
    The more we can get in anecdotes, that helps me as a 
reporter, and it just helps in collection of data. We need more 
data.
    Mr. Mullin. Thank you for the work that both you all do. 
Mr. Chairman, I yield back.
    Mr. Burgess. The Chair thanks the gentleman. The gentleman 
yields back. The Chair recognizes the gentlelady from Indiana, 
Mrs. Brooks, 5 minutes for your questions.
    Mrs. Brooks. Thank you, Mr. Chairman. Professor Wallace, 
prior to coming to Congress, I was at IV Tech Community 
College, as a senior administrator, and I was there during the 
recession from 2007 until 2011. And I must say that college and 
community college exploded in enrollment during that time 
period because so many people had gotten laid off of their 
jobs, of all ages, but particularly those who were 40, 50 years 
old, who had gotten laid off their jobs needed to come back to 
college because they had no digital literacy skills. And they 
couldn't even apply for jobs online because of that digital 
literacy or lack, illiteracy.
    So I am very pleased that you are doing this. How would you 
encourage other schools? I mean, how much are you talking about 
this? Obviously this is a nice platform for you to publicize, 
but how are other communities, you know, are they taking up 
your baton and, you know, doing what you are doing, or are you 
a unique program in the country? I am really not that familiar 
with the various programs.
    And then, secondly, what are some of the strategies you are 
using that are actually teaching the seniors?
    Mr. Wallace. We are certainly not unique. There are several 
other efforts in this regard. I want to include SeniorNet, 
Cyber-Seniors, Generations Online. There are a lot of groups 
that are doing similar kind of work in this space.
    Mrs. Brooks. Do they actually go into the communities like 
you are doing, or are they more online educational tools?
    Mr. Wallace. There are a variety of approaches. Some of 
them are truly working one-on-one. So, I don't want to claim 
that we are the only ones doing this kind of work.
    Obviously this is a tremendous platform to raise awareness. 
I was also invited to the White House Conference on Aging over 
the summer which also gave me a platform to speak out about 
this.
    And certainly within the State of Michigan, there has been 
a tremendous amount of interest that has come up from that, and 
so we are working now in conjunction with other universities. I 
feel like it is a very easy model to implement, and what we are 
in the business of doing right now is, codifying what we do at 
Michigan Tech so that we can distribute that to other schools 
and give them a leg up on the whole process.
    Mrs. Brooks. What are some strategies that you have found 
that have worked best when you are teaching?
    Mr. Wallace. Well, as I said in my statement, having tutors 
sort of model their own behavior and speak out loud about it is 
an important piece of it. So having an experienced computer 
user say, well, looking at what is on the screen, well, in this 
case I would be thinking about this, and I would be worried 
about this, and I would want to try out this.
    And working out what is going on in their minds, saying it 
out loud is an important piece to articulate that this is a 
process just like working with any other aspect of life. You 
have to weigh the pros and cons and think about things in a 
sensible way. For instance, looking at junk mail that you get 
in your mailbox compared to a potential scam by email. That 
kind of brings it back to familiar territory, which I think is 
useful. This is not something entirely new. It is different, 
and you have to learn how to use it, but it is not entirely.
    I just want to say that Ms. Stanger and I are both in 
solidarity on this issue, that education in this regard is an 
extremely effective and low-cost way of addressing this problem 
of fraud online. A little bit of education I think can go a 
long way to stem some of the problems that we see that take 
immense amounts of time and efforts to cure later.
    Mrs. Brooks. Thank you. I know we focus a lot on education 
of our young, of the children getting online, but we don't 
spend nearly enough time educating seniors. Ms. Stanger, I 
would like you to know that every time I go home and visit my 
parents, Consumer Reports is front and center.
    But I do want to ask you, are there enough, in you 
research, available and accessible tools, for seniors to 
report? Have you found in your research, are there enough 
tools, and do they know what they are?
    Ms. Stanger. I think the last part of your question is the 
important thing. There are plenty of tools. We have several, in 
our article, several places where people can report. Obviously 
AARP is very involved, and they have their scams and fraud 
page. The CFPB, there is something called the Financial Fraud 
Enforcement Task Force stopfraud.gov, where you can report.
    On the Senate side, they have the Special Commission on 
Aging Hotline, and that is a good sort of place you can call 
up, and they will tell you where to go for help. But I think a 
lot of people, the first person they might go to report it to 
is the police first, is local law enforcement. And my 
understanding is that there could be more training with local 
law enforcement. I spoke with local prosecutors who said, you 
know, there are still police who when somebody comes to them 
and say I have been scammed and this person called me, the cop 
said, well, is thinking to themselves, well, that was kind of 
stupid. Why did you do that? And they have to be trained.
    I understand that the Justice Department is getting 
involved in training local police to spot elder abuse, not just 
financial elder abuse, but also physical abuse and emotional 
abuse and so forth. So at the very local level, where people 
are doing the reporting, I think there has to be better 
training. In some communities, some large communities there are 
task forces, in Seattle, I think in San Diego, where different 
groups have come together and really created a public face. And 
that can help.
    In San Diego there is a fellow named Paul Greenwood who is 
an assistant district attorney, I think. And he is very well 
known, and one of the people that we profiled was involved in a 
scam. He got caught--he didn't get caught, he sent money in a 
scam, and then he thought better of it and he told a friend, 
and the friend went to Paul Greenwood's office, and Paul 
Greenwood working with I think it was Wells Fargo, was able to 
stop the payments that he was making to a scammer.
    So it can work, not always, but it can work sometimes if 
people report it quickly and they know where to go. And on a 
local level, I am not sure that that always happens.
    Mrs. Brooks. Thank you. Thanks for your efforts in 
protecting our seniors to both of you. Appreciate it.
    I yield back.
    Mr. Burgess. The gentlelady yields back. The Chair thanks 
the gentlelady.
    The Chair recognizes the gentlemen from Kentucky, Mr. 
Guthrie, 5 minutes for questions, please
    Mr. Guthrie. Thank you very much. Thank you for being here. 
And I guess a lot of us prepared the same kind of a question. 
So it is very similar, because I was going to ask you what the 
biggest take-away is you got from the aged seniors. But what in 
your, Ms. Stanger, in your article, but what do you think was 
the common--was there a common thread--you said isolation. I 
think there seems that people are isolated, and so when the 
phone rings they answer the phone and engage in conversation. 
But is there something common among the aged that we should be 
looking for, or several things that were common?
    Ms. Stanger. So one common thread is that they--well, in 
many of them they were acting, sadly, because they wanted to 
provide for somebody, for children or grandchildren. They 
thought this would be great. You know, I am getting these 
winnings and it can help me. The priest that we--Father Ortiz 
who we profiled, he was hoping to get the money and use it to 
fund a school.
    The scammers know this. They really know how to just push 
those emotional buttons, and that is what is sad. The oldest 
people who were scammed, people in their 80s, those I have been 
told, and it seemed to be true from my research, they get 
scammed for bigger amounts of money. Younger people maybe are a 
little bit more likely to report, and maybe they don't go as 
far.
    But in general it is because people really were--they 
really trusted these scammers at some point, and the other 
major thing is that they were told: Don't tell anybody, and so 
they kept it to themselves because they were afraid of what 
would happen if they did tell. And that is why they were 
scammed by so much.
    And finally when it finally either somebody caught on or 
they themselves thought, you know what, this isn't sounding 
right, and then they reported. So it is the secrecy.
    Mr. Guthrie. Yes, no, I guess another question I would say 
what do you think we should be looking for in our district. But 
I have a friend who had a older brother that was being scammed 
and for several hundred thousand dollars and knew it was 
going--and tried to get him and he couldn't get him to stop. 
And there is no legal way because then he was just an adult. 
Have you seen that in--were some of the others trying to--
family members saying, ``Don't do this. This is scamming,'' and 
it just keeps going or----
    Ms. Stanger. Yes. I mean, I did----
    Mr. Guthrie. And I think that is the trust they build. I 
didn't think about that case. You just said that. It was the 
trust that they build with the scammer.
    Ms. Stanger. That is right.
    Mr. Guthrie. Which is an oxymoron, I think. Trust with a 
scammer, but----
    Ms. Stanger. It is true. Unfortunately, some of the worst 
cases, the repeat cases, they develop a relationship with the 
scammer. And relatives are saying, you know, ``You can't do 
this, Dad. No, no, no.'' This is true, you know. And they trust 
the scammer more than they trust the adult child.
    I am at a loss, really, to know what to say except that, if 
a senior can at least be told, you know what, they can be--if 
they can be shown some of the things that don't make sense, 
then maybe they will start to realize, Oh, you know, this Web 
address, that doesn't seem right. It doesn't have a dot-gov at 
the end. Right.
    Mr. Guthrie. Right.
    Ms. Stanger. You know, some of these things that seniors 
may not think about, the URLs and so forth that somebody 
younger knows about, just knows. You know, the pop-up that says 
Microsoft says that you have a problem with your computer. 
``Click here.'' Well, a lot of younger people, not all, but a 
lot of younger people will know, ugh, ugh, ugh. I am not going 
there. But somebody who is not as familiar won't know. And so 
it is just education.
    The victim specialist in Los Angeles said that was some of 
the victims that the she dealt with she actually wrote down 
something like a script for them to put next to the phone so 
when somebody called they knew what to say. It requires real 
preparation. It is almost an addiction for some people, sadly.
    Mr. Guthrie. So, professor, it might have been in this 
case, I was--Professor Wallace, I know Ms. Schakowsky asked you 
some questions. And ones she asked I was going to ask, but I 
don't know if you ever got done your answer, because there were 
several questions was: What trends do you see in your online 
program? What are the trends and are there some sessions more 
popular than others?
    Mr. Wallace. Trends. Well, certainly a trend toward mobile 
devices now. We get a greater variety of types of devices 
coming in, which makes it harder for us to keep track of--we 
are not familiar with all of them ourselves, and so it takes a 
little while to learn them.
    Actually, that speaks to one thing that I think we try to 
get across to our learners is that we don't know everything. 
Even the tutors don't know everything. But we have sort of ways 
of approaching something new. So maybe it is a new device, but 
it could also be, you know, a new Web site or a new service of 
some kind. And so we have ways of looking at it, checking it 
out, making sure it is legitimate, you know, and moving on.
    So there is certainly a greater diversity, both in terms of 
the actual physical devices but also, really, in terms of the 
kinds of services that people are using. So that means that we 
have to teach them a more kind of agile way of approaching the 
technology. We can't just teach them how to use, you know, 
gmail in its current form right now because if we lock them 
into that, it is going to change. The interface will change 
over time. And so we need to teach them these kind of deeper 
skills.
    Again, it is getting back to the idea of what kinds of 
approaches do you use in the physical world to ensure yourself 
that this is something legitimate and perceived from there. So 
those kinds of techniques, we try to transfer them over to this 
digital world.
    Mr. Guthrie. Well, thank you. And I appreciate you guys 
doing this. And my time is expired so I will yield back.
    Mr. Burgess. The Chair thanks the gentleman.
    The Chair is going to recommend himself for 5 minutes for 
questions.
    I did let the other Members go first because I knew we were 
coming up on a vote, but it looks like we have got enough time 
to conclude this and adjourn the subcommittee before we go to 
record our votes.
    Ms. Stanger, I just wanted to know from you, what sort of 
response have you had since publishing the article that you did 
in Consumer Reports?
    Ms. Stanger. People in the elder-justice community, those 
are people who deal with, you know, lawyers and people in 
communities, workers who are very happy that it is out there 
because they think it gets the word out.
    Apparently the FTC called this little dramatic group to 
congratulate them. And maybe they will work together. That 
would be great. I haven't looked at the letters we have got 
recently so I don't know what readers are saying. We just hope 
that having it on the cover of a national magazine will get 
people to think more about it and think about it in their own 
lives.
    Mr. Burgess. Certainly drives the interest factor.
    Professor Wallace, you may have noticed that you have 
arrived in a digital-free zone, and it is ironic because we are 
the principal committee in the United States House of 
Representatives that deals with technology and communications, 
and they provide us a pad of paper and a pencil. So there is 
room, there is room for improvement.
    But I just wanted to ask you, in the healthcare space we 
have something known at syndromic surveillance where, for 
example, tissue sales and decongestant sales at a drugstore may 
be an early tip-off that there is a flu epidemic in a 
community. Is there any way to use that kind of surveillance in 
your world where there is an increased level of scamming 
activity?
    I can remember as a kid reading in the newspaper, they used 
to call them pigeon drops where someone would come to town and 
take advantage of people. And you'd see an article in the 
newspaper about there is some scammers in town so be careful. 
Is there any way now in the digital world that you have of 
getting tipped off and then getting the information out that 
there is an uptick in this type of activity?
    Mr. Wallace. Boy, I do not know of any effort in the that 
regard. But you have given me a great idea to take back to some 
of my faculty colleagues at Michigan Tech who work in that 
space. If it doesn't exist right now, I think that is a great 
idea.
    Mr. Burgess. Well, I don't even know if it is possible, but 
I also did not know, Ms. Stanger, in your article, about the 
little scratch-off money cards that people have. I didn't even 
know you could do that. So, and I don't know if there is any 
way of watching that kind of activity. That almost seems like 
legalized money laundering to me.
    Ms. Stanger. Well, I understand that that particular green 
dot card doesn't have the capability anymore. So I think they 
are trying to, you know, eliminate that. But the scammers come 
up with new things. Somebody told me that now the iPhone cards, 
I guess they are cards that you can--or I don't know, 
something----
    Mr. Burgess. Apple Pay.
    Ms. Stanger. Excuse me?
    Mr. Burgess. Apple Pay.
    Ms. Stanger. Apple--something is being used. I don't know 
if it is that, is being used. The scammers move on. They move 
on to new payment. They figure it out, unfortunately.
    Mr. Burgess. Yes, they are much more facile than the United 
States Congress.
    And both of you have mentioned and it has come up in 
several Members' questions, the isolation factor and how that 
is used and almost monetized to take advantage of people. Hard 
to know how to overcome that except that making families aware 
that that is a risk factor in this population.
    Mr. Wallace. It is ironic because the isolation is 
something that really motivates their computer use, at least in 
our case. A lot of people don't have relatives nearby, and so a 
great way to communicate is through social media and so on.
    And so the irony is of course then they are isolated and 
don't have feedback. But hopefully we are providing a service 
for them that does provide that. Working together as peers and 
working with mentors who know is a help.
    Mr. Burgess. And just as a general word to families to be 
on the lookout for when you know you have a family member who 
has tended to be isolated that they are perhaps at risk for 
being targeted by this type of activity.
    Professor Wallace, I just have to ask you one last brief 
question. It is off topic, but you referenced that Facebook was 
for old people. What is up with that?
    Mr. Wallace. I am just echoing the sentiment of my children 
who say that young people don't use it anymore.
    Mr. Burgess. So where are they? They are not on Facebook, 
where are they?
    Mr. Wallace. You think they are going to tell me?
    Mr. Burgess. They will tell you. OK. It is in development. 
All right.
    I will yield back the balance of my time. And seeing that 
there are no further Members wishing to ask questions for this 
panel, I do want to thank our witnesses for being here today.
    Before we conclude, I would like to submit the following 
document for the record by unanimous consent: a story by Ms. 
Stanger in the upcoming issue of Consumer Reports magazine. 
Without objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Burgess. Pursuant to committee rules, I remind Members 
they have 10 business days to submit additional questions for 
the record. And I ask the witnesses to submit their response 
within 10 business days upon receipt of such questions.
    Without objection, the subcommittee is adjourned.
    [Whereupon, at 11:35 a.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

                 Prepared statement of Hon. Fred Upton

    Elder fraud is a serious problem that threatens the very 
financial stability and wellbeing of our seniors and their 
families. Sadly, it's a problem that we are very familiar with 
in Michigan, and is an issue confronting every community and 
State. Seniors have always been targets for fraudsters, but the 
digital age has especially increased opportunities for 
predators of the elderly.
    From the Greatest Generation to the Baby Boomers, our 
retired and elderly population is projected to grow rapidly--in 
Michigan and across the country--and with it, the number of 
potential targets for elder fraud. By 2020, the number of 
Americans over 65 years old is projected to be 54.8 million, an 
increase of about 14 million since the last census.
    For those who have been unable to keep a family member from 
being defrauded in a scam, it is a heartbreaking occurrence. 
While some may view it as a ``petty crime,'' it is not.
    The consequences are real. And the effects are lasting. 
When fraudsters trick the elderly into parting with often 
limited retirement funds, they take more than just money. Many 
of these schemes also rob victims of their independence, 
dignity, and self-worth. These are possessions that money can't 
buy and that are difficult to reclaim.
    Make no mistake--the criminals who target the elderly put 
significant time and resources into their efforts. In one 
conspiracy, fraudsters posed as the victim's grandson and 
grandson's lawyer, claiming he was in a Mexican jail. These 
criminals took almost all of the victim's savings with 
elaborate stories. In another type of scheme, callers target 
older Americans and develop various relationships with them 
over the phone, eventually leading to the victim sending money 
under false impressions.
    These scams often require extensive profiling of the 
intended victims and persistent contact--in other words, 
material dedication to the crime. Criminals with these kinds of 
resources to commit elaborate and evolving forms of fraud 
warrant robust responses from Government at all levels.
    We in Congress, as well as regulators and law enforcement 
owe it to seniors to crack down on this despicable activity and 
ensure enough is being done to stop the perpetrators.
    We need to make sure that our Government response also 
allocates the appropriate resources to protecting our seniors 
in every community. I appreciate the diligent work being done 
at the FTC, Michigan Tech, Consumer Reports, the CFPB, and Cook 
County to put a stop to elder fraud and I look forward to 
today's very important discussion.

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