[Senate Hearing 116-544]
[From the U.S. Government Publishing Office]
S. Hrg. 116-544
COMBATTING ROBOCALL FRAUD: USING
TELECOM ADVANCES AND LAW
ENFORCEMENT TO STOP SCAMMERS
AND PROTECT SENIORS
=======================================================================
HEARING
BEFORE THE
SPECIAL COMMITTEE ON AGING
UNITED STATES SENATE
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
WASHINGTON, DC
__________
JULY 17, 2019
__________
Serial No. 116-10
Printed for the use of the Special Committee on Aging
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
47-375 PDF WASHINGTON : 2022
-----------------------------------------------------------------------------------
SPECIAL COMMITTEE ON AGING
SUSAN M. COLLINS, Maine, Chairman
TIM SCOTT, South Carolina ROBERT P. CASEY, JR., Pennsylvania
RICHARD BURR, North Carolina KIRSTEN E. GILLIBRAND, New York
MARTHA McSALLY, Arizona RICHARD BLUMENTHAL, Connecticut
MARCO RUBIO, Florida ELIZABETH WARREN, Massachusetts
JOSH HAWLEY, Missouri DOUG JONES, Alabama
MIKE BRAUN, Indiana KYRSTEN SINEMA, Arizona
RICK SCOTT, Florida JACKY ROSEN, Nevada
----------
Sarah Khasawinah, Majority Acting Staff Director
Kathryn Mevis, Minority Staff Director
C O N T E N T S
----------
Page
Opening Statement of Senator Susan M. Collins, Chairman.......... 1
Opening Statement of Senator Robert P. Casey, Jr., Ranking Member 3
PANEL OF WITNESSES
Angela Stancik, Granddaughter of Scam Victim, Ganado, Texas...... 4
Jerry L. Sanders, Jr., Sheriff, Delaware County, Drexel Hill,
Pennsylvania................................................... 6
Delany De Leon-Colon, Postal Inspector in Charge, Criminal
Investigations Group, U.S. Postal Inspection Service,
Washington, D.C................................................ 8
David Frankel, Chief Executive Officer, Zipdx LLC, Monte Serano,
California..................................................... 10
APPENDIX
Prepared Witness Statements
Angela Stancik, Granddaughter of Scam Victim, Ganado, Texas...... 35
Jerry L. Sanders, Jr., Sheriff, Delaware County, Drexel Hill,
Pennsylvania................................................... 37
Delany De Leon-Colon, Postal Inspector in Charge, Criminal
Investigations Group, U.S. Postal Inspection Service,
Washington, D.C................................................ 40
David Frankel, Chief Executive Officer, Zipdx LLC, Monte Serano,
California..................................................... 44
Statements for the Record
Senator Robert P. Casey, Jr., Closing Remarks.................... 53
Electronic Transaction Associaton, Letter........................ 54
COMBATTING ROBOCALL FRAUD: USING
TELECOM ADVANCES AND LAW
ENFORCEMENT TO STOP SCAMMERS
AND PROTECT SENIORS
----------
WEDNESDAY, JULY 17, 2019
U.S. Senate,
Special Committee on Aging,
Washington, DC.
The Committee met, pursuant to notice, at 9:32 a.m., in
Room 562, Dirksen Senate Office Building, Hon. Susan M.
Collins, Chairman of the Committee, presiding.
Present: Senators Collins, McSally, Rubio, Hawley, Braun,
Rick Scott, Casey, Blumenthal, Jones, Sinema, and Rosen.
OPENING STATEMENT OF SENATOR
SUSAN M. COLLINS, CHAIRMAN
The Chairman. The hearing will come to order.
Good morning. Protecting American seniors from scammers who
seek to defraud them is a central goal of this Committee. In
the past 6 years, we have held 23 hearings on frauds and scams
targeting our seniors. Using just phones and the Internet,
fraudsters have proven to be relentless. To protect our
Nation's seniors, we must continue not only to prosecute con
artists who steal literally billions from our seniors, but also
to find new, more effective ways to block illegal spoofing and
robocalls at the network level.
Last year, robocallers generated more than 26 billion
unwanted calls that reached Americans' mobile phones. When
landlines are included, the number soars to 48 billion. In
Maine alone, our residents received an astonishing 93 million
robocalls last year. That is an average of 73 calls to each
person in our State, so far this year, scammers are on pace to
generate more than 58 billion unwanted, illegal robocalls
targeting American consumers.
These scams overwhelmingly are initiated by offshore
robocallers who are using new technologies to perpetuate their
schemes. Today we will focus on a practice called ``spoofing.''
This allows scammers to mask their identity by replacing the
Caller ID tied to their actual phone number with one that fits
their story. When victims see the ``Internal Revenue Service''
or the ``local Sheriff's Department'' pop-up on their Caller
ID, they understandably answer the phone. They also are
worried, scared, and often easily hustled into doing whatever
the scammers demand.
With the emergence of the modern Voice Over Internet
Protocol technology--or ``VoIP,'' criminals can now operate
from call centers anywhere in the world--as far away from
American law enforcement as they can possibly get--using VoIP
to hide their identity while generating millions of robocalls
at a very low cost.
Our Committee has called on regulators and the business
community to work together more aggressively to stop scammers
from using VoIP and other technologies to facilitate fraud. We
have seen some progress on that front. US Telecom developed
Traceback, a program to identify the source of illegal
robocalls. Carriers are working to implement new technology
called ``SHAKEN/STIR'' that will allow consumers to tell
whether or not the Caller ID that shows up on their phones is
legitimate or has been spoofed. But the implementation and the
cost of these technologies to protect consumers has been slow.
On the positive side, we are seeing a more aggressive and
coordinated approach against robocallers by the Federal
Government. In 2016, the Department of Justice led a Federal
investigation that closed down five call centers in India. A
few weeks ago, the Federal Trade Commission and its law
enforcement partners announced Operation Call it Quits, a major
crackdown against foreign and domestic defendants allegedly
responsible for more than a billion calls to consumers
nationwide.
The Federal Communications Commission has also been more
active.
These Federal actions represent progress that our Committee
has pressed for to crack down on robocallers. Now the Committee
is calling for a next generation approach--not only to crack
down on the criminals, but also to consider new network-wide
solutions to prevent robocall spoofing frauds in the first
place.
We have recently taken an important step in the Senate by
passing the TRACED Act, of which I was proud to be a cosponsor.
I hope it will be signed into law soon.
Today, along with many of my colleagues, I am introducing
the Anti-Spoofing Penalties Modernization Act, which will
complement the TRACED Act's provisions on robocallers by
doubling existing penalties and by extending the statute of
limitations on prosecuting illegal spoofing.
Despite all of these efforts, the number of robocalls is
expected to soar. To defeat these scammers, we need new
technological approaches. We know from experience that the
scammers are ruthless and relentless, and as long as these
fraudsters can access our telephone network, they will continue
to flood our phones with billions of calls in search of new
victims. The key to defeating these scammers is to block the
illegal robocalls from foreign call centers closer to their
source before they can reach the American consumer. Today we
will learn about new network level approaches with the
potential to ultimately stop robocall spoofing fraud
altogether.
Beyond the technology--and we will be reminded of this
today--we must never forget that our purpose is to protect the
victims of these notorious scammers. Too many seniors continue
to lose their hard-earned money and often their entire
retirement savings to con artists.
Even worse, as we will hear today, these scams can shatter
the lives of seniors and their families and impose a cost that
cannot be measured in money alone.
I am now pleased to turn to our Ranking Member, Senator
Casey, for his opening statement.
OPENING STATEMENT OF SENATOR
ROBERT P. CASEY, JR., RANKING MEMBER
Senator Casey. Thank you, Chairman Collins, for holding
this hearing and also for your opening statement.
I know that many in our country are divided on a range of
issues, but we are united as Americans in despising these
robocalls.
For some, these calls have become more than just a
nuisance. The con artists on the other end of the line often
turn a conversation into a heist--literally.
They threaten our aging loved ones, and they rip away their
hard-earned savings, and as we will hear today, these criminals
can cause terrible tragedy. The perpetrators of these crimes
must be pursued and prosecuted to the full extent of the law,
and they should be behind bars.
I was pleased to support resources for the Department of
Justice and the Federal Trade Commission to successfully engage
in two of the largest coordinated sweeps of companies
facilitating these calls and the criminals making them.
Unfortunately, even these actions that took place earlier
this year have not deterred the con artists. As one of our
witnesses, Sheriff Sanders from Pennsylvania, will explain,
some fraudsters only seem ever more emboldened.
They rig phone lines so the number that shows up on Caller
ID appears to be the number of a local police or sheriff's
office. Sheriff Sanders and local law enforcement officials
across the country do not take such impersonation lightly.
These schemes are requiring an investment of time and
resources from officers across the country. Instead of focusing
only on what they do best--keeping our streets and our
communities safe--local law enforcement officials must spend
precious time keeping the phone lines safe.
This is one of the reasons why I am pleased to have
introduced, with Senator Moran, the Stop Senior Scams Act just
recently. This bill would create another line of defense
against scammers by giving bank tellers, cashiers, and others
the tools to spot a scam and prevent--prevent--someone from
ever handing over cash to a stranger on the phone.
We hope that this bill is enacted swiftly. Much of what we
will discuss today is how these crimes occur, but we must not
forget the important role that both industry and regulators
play in preventing an illegal robocall from being connected in
the first place, and so we must make sure that the rules are in
place to allow industry to adopt and to implement the most up-
to-date call authentication and blocking technologies.
I am pleased that the Senate recently passed the TRACED
Act, as Senator Collins referred to, and that the Federal
Communications Commission recently finalized new rules to help
get this technology to every consumer with a telephone, but as
we will hear today, we have a lot more to do. The mental and
financial health, indeed the very well-being, of our loved ones
is at stake.
I look forward to hearing more from our witnesses. We thank
our witnesses. And I also look forward to working with Chairman
Collins and other colleagues to put an end to these destructive
calls.
Thank you, Madam Chair.
The Chairman. Thank you very much, Senator Casey.
I also want to thank Senator Scott of Florida for being
with us today. He has been a very active member of the Aging
Committee, and we are very happy to have him here.
We will now turn to our witnesses. Our first witness is
Angela Stancik, who joins us from Texas. She is the
granddaughter of Marjorie Jones of Lake Charles, Louisiana.
Today Ms. Stancik testifies in memory of her grandmother and as
a voice for the scores, the hundreds of Americans who have
fallen victim to elder fraud.
I will now turn to the Ranking Member to introduce our
witness from the Commonwealth.
Senator Casey. I am pleased to introduce Sheriff Jerry
Sanders from Drexel Hill, Pennsylvania. Sheriff Sanders has
served as sheriff of Delaware County since January 2018. He
previously served as a sheriff's deputy in the city of
Philadelphia and later retired as chief inspector. In addition
to his law enforcement background, Sheriff Sanders is a
minister in his church and is the chaplain at a local
retirement community. As we will hear from his testimony, even
law enforcement and religious leaders are not spared from
getting tangled up in these robocalls.
I would also like to welcome the sheriff's wife, Juanita,
who I think is right behind him, over his right shoulder, and
his chief deputy, Mike Donohue, both of whom have made the trip
to be with us today from Delaware County, Pennsylvania, right
next to Philadelphia.
Thank you both for being here, and, Sheriff Sanders, I look
forward to hearing your testimony. Thank you.
The Chairman. Thank you.
Our third witness will be Delany De Leon-Colon, a Postal
Inspector who oversees the Criminal Investigative Unit of the
United States Postal Service. Throughout her 15 years of
service for the Postal Service, she has managed teams focusing
on various forms of theft, fraud, and money laundering that
frequently result from these robocalls.
Finally, we will be pleased to welcome David Frankel. Mr.
Frankel is a telecommunications expert who has worked in high-
performance computer and networking technology since 1974. He
helped to implement the telecom industry's Traceback effort,
which assists law enforcement in tracking down the origin of
illegal robocalls.
Thank you all for joining us, and we will begin with Ms.
Stancik.
STATEMENT OF ANGELA STANCIK, GRANDDAUGHTER
OF SCAM VICTIM, GANADO, TEXAS
Ms. Stancik. Good morning. Thank you, Chairman Collins,
Ranking Member Casey, and other members of the Committee for
inviting me to be here today. I am very honored. My
grandmother, Marjorie Jones, was a victim of elder fraud. There
are no words to express what she meant to me and my family and
how much we all loved and adored her. The examples of her faith
and love cannot be confined to words, and she will forever be
missed.
My grandmother was targeted and pursued nonstop by a ring
of fraudsters. Over time, these individuals used creative and
cunning tactics to gain her trust. They told her she had won a
large cash prize and all she needed to do was pay the taxes and
fees.
I first realized my grandmother was a victim of elder fraud
by the last conversation I ever had with her. Reliving that
phone call is very painful. She explained that she needed
$6,000 wired to her as soon as possible. Her forceful tone and
desperation was very upsetting. I could hear the panic in her
voice, and she was very, very afraid.
This phone call set off many red flags, and everyone grew
extremely concerned about her financial situation. We do not
know of a single time in her entire life where she ever
borrowed money from an individual. My father informed me that
he had wired her $8,000 the week prior, and he assured me he
was trying to find out what was happening. He mentioned his
fears that someone was scamming her, but because she was so
desperate and scared, he sent her the $6,000 she wanted anyway.
Sadly, she died less than a week later.
It pains me to talk about my grandmother's horrific death
because she chose to take her own life. It is extremely hard to
imagine a loved one committing suicide, but she did, because
these individuals preyed on her and on her good heart. Her
golden years and the last chapter of her life was taken from
her. It is clear to us that the circumstances that led to her
death were caused by these criminals.
After her death we found out just how much these criminals
had taken from her. We found hidden in a closet several bags
full of wire receipts where she had been sending large sums of
money overseas. My family visited these wire marketing services
to talk with the clerks and discovered that they had warned her
that this was not legitimate and they believed it was a scam.
She continued to wire money, but used a different location.
We also discovered not only did they drain her of all the
money it took her a lifetime to save, but that she had taken
out a reverse mortgage on her home and she cashed out all of
her life insurance. My grandmother died with $69 in her bank
account.
In the summer of 2016, we were notified by the Department
of Justice that the individuals who committed this crime
against her were caught. One of them had been extradited from
Costa Rica and was already in the sentencing phase for her
punishment. I traveled from Houston to Charlotte, North
Carolina, to read my victim impact statement to the court and
to finally face one of the individuals who did this, because of
that statement, I was invited to speak with former Attorney
General Jeff Sessions in February 2018, when he announced the
Elder Fraud Sweep. Since then, I have been contacted by many
Americans who are facing this exact type of scam, and
personally I know two other close family friends that have been
impacted by the ``grandparent scam'' and the ``medical debt
collection scam.''
On behalf of my grandmother, Marjorie Jones, I want to
thank the Committee for hearing and exploring the growing and
difficult problem of fraud against the elderly. We live in a
fast-paced, youth-oriented society, and elder issues are not
high on the social agenda. But you have the ability to show
great leadership by shining a light on this topic, so again, I
thank you for your passion that has helped raise awareness.
Thank you for recognizing that as a Government, as a society.
and as individuals, we must increase our efforts to ensure that
our seniors are protected from the criminals that prey on them.
Our seniors in this country deserve to live out their lives
with dignity and honor.
Thank you.
The Chairman. Thank you very much for your moving testimony
and for your willingness to come forward and share such a
painful, horrible story with us, because you have been willing
to do that, I am sure that you have alerted so many around this
Nation, and that is a tremendous way to honor the memory of
your grandmother, so I thank you for your courage and speaking
out publicly, and I am so sorry for what you and your family
have endured. Thank you for being here.
Sheriff Sanders.
STATEMENT OF JERRY L. SANDERS JR., SHERIFF,
DELAWARE COUNTY, DREXEL HILL, PENNSYLVANIA
Mr. Sanders. Chairman Collins, Ranking Member Casey, and
members of the Committee, I am Sheriff Jerry L. Sanders Jr.,
and I serve as the sheriff of Delaware County, Pennsylvania.
Thank you for the opportunity to testify before the Committee
about my office's experience with scammers using robocall and
spoofing technologies.
The Delaware County Sheriff's Office experiences occasional
reports from citizens about receiving scam or ``robo'' calls
from unknown persons.
These scams vary, but the most common form is the caller
claims the potential victim has missed jury duty, and there is
a warrant for their arrest. The caller will identify themselves
as a member of the sheriff's office, typically using a fake
name. In one recent incident, the caller used the name of an
actual deputy, going so far as to use the deputy's voicemail
greeting as their own. If the sheriff's office is able to get a
number from a potential victim, calling it back typically
results in no answer. On occasion, someone will answer, but
once they realize the call is from the sheriff's office and we
are asking legitimate questions, they typically terminate the
call.
Another aspect of this is the callers often use
``spoofing'' technology. This is when they are able to program
the actual sheriff's office main number to show on the
potential victim's Caller ID. This is often how we find out
about the calls. The potential victim, in most cases people who
realized something was amiss, terminates the call and calls
back using the displayed number, which is the actual office
number. We will tell them that this is a scam. The sheriff's
office does not call people that we have business with, that it
is either done through U.S. mail or in most cases in-person
service by the deputy. In addition, under no circumstances
would we ever ask for information over the phone and never ask
for money or any other valuable thing to avoid obligation or
arrest.
In two separate incidents that occurred over the last
several months, professionals were targeted. The scammers
convinced two of them that they were subject to arrest for
missing jury duty. In one case, they were able to get the
victim to travel to a bank to withdraw $3,000 and then on to
retail establishments where she was instructed to purchase
thousands of dollars in money cards or gift cards and ended up
mailing them off. The victim's husband grew suspicions and
looked on the sheriff's web page on the county website and saw
the scam alert, but it was too late.
In the most recent case, a similar ruse was used, and they
advised one of the victims, a 65-year-old doctor, that he was
subject to arrest for not responding to a grand jury subpoena.
They had him convinced enough that they had him on the phone
for approximately an hour and had coaxed him all the way to a
bank in Media, Pennsylvania, and that was approximately 10
miles and 20 minutes away, and they instructed him to withdraw
$6,000. They advised him that he should stay on the phone, not
answer or communicate with anyone, and to follow their
instructions. His wife in the meantime grew suspicious and
tried to call him repeatedly. When she could not reach him, she
called the sheriff's office. With that call and information she
was able to provide, we were able to contact the bank and
actually intercept the victim as he was parking his vehicle and
thwart the execution of the scam and saved the victim thousands
of dollars.
In the most recent case, the victim was approached by the
chief deputy, who was in plainclothes and arrived in an
unmarked car. When the chief first approached, the man was
skeptical as to who he was, saying that he had the sheriff's
office on the phone. The scammer terminated the call by the
time the chief took the victim's phone. Once the victim
realized what had just happened, he explained that he was
chiefly concerned about his medical license and that if he were
to be arrested, that his license would be jeopardized, as well
as his position as a medical director--losing sight of the fact
that this was an elaborate ruse. With them keeping him on the
phone, running him across the county, telling him to not speak
to anyone, et cetera, this was, in fact, just a ruse. He was
actually intercepted a block from the courthouse, with the
building in view, but instead of going in to verify, he was
actually going to the bank to withdraw the money. He then
likely would have been directed to go the to a ``federally
authorized retailer'' to purchase money or gift cards, which he
would then be instructed to give all pertinent information over
the phone, and in some cases to mail them.
In the three most recent cases, it is believed the scammers
were able to gather personal information on the potential
victims, two medical professionals and an architect beforehand,
most likely from the web. This enhances the scammers' ability
to convince the victim that since they know much about them
that the call is legitimate. This gets the victim off balance,
and with the threat of potential arrest and then the offer of
the out by paying a fine, they opt for that to avoid
``arrest.''
Frequent targets are older persons who typically have great
respect for authority and tend to be much more trusting.
These type scams circulate through the State. We will often
see emails from other sheriffs' offices. In response, when we
experience them, we push out press and social media
notifications to warn the public, and we have a permanent alert
on the county website.
Unfortunately, given the limits of manpower and resources,
local law enforcement can do little to investigate these crimes
to arrest. Often trying to keep the public aware to avoid
victimization is the best we can do.
I was pleased to learn that Senator Casey has introduced
legislation that would help train bank tellers, cashiers, and
others about how to spot a potential scam victim and to
intervene to stop it. In this way, they would serve as another
line of defense, protecting our family, friends, and neighbors
from these criminals. I also think that more must be done by
the telecommunications industry to stop these callers from
getting through in the first place.
Thank you for the opportunity to speak before the Committee
today. I look forward to answering any questions you may have.
The Chairman. Thank you very much, Sheriff, for being with
us today.
Ms. De Leon-Colon? Did I get it close? Colon, right?
Ms. De Leon-Colon. Yes, correct.
STATEMENT OF DELANY DE LEON-COLON, POSTAL
INSPECTOR IN CHARGE, CRIMINAL INVESTIGATIONS
GROUP, U.S. POSTAL INSPECTION SERVICE,
WASHINGTON, D.C.
Ms. De Leon-Colon. Good morning, Chairman Collins, Ranking
Member Casey, and members of the Committee. I appreciate the
opportunity to testify on efforts to combat fraud.
My name is Delany De Leon-Colon. I am the Inspector in
Charge of the Postal Inspection Service's Criminal
Investigation Group. I oversee several national programs,
including mail fraud.
Prior to arriving to Washington, DC, I was the Assistant
Inspector in Charge of our Miami field office. In that role I,
with authorities in Jamaica to investigate lottery and
sweepstakes fraud. I began my law enforcement career with the
Immigration and Naturalization Service, later with the Secret
Service, before being appointed as a Postal Inspector in 2004.
Every day, consumers of all ages are bombarded by marketing
pitches, promotions, and offers. As a law enforcement officer,
I have seen how persuasive language and high-tech deception are
used to catch the attention of consumers and convince them to
part with their money.
Imagine your phone rings and the voice on the other ends
tells you it is your lucky day. However, you must first pay a
little cash, called an ``insurance fee.''
Once an individual has been persuaded to pay an initial
fee, the scheme's operator takes the relationship to the next
level, asking for yet more money, while emotionally isolating
the individual from friends and family. Most of the victims we
interview were not aware that call-spoofing technology existed.
By their own admission, they overcame their doubts and bought
into the caller's fabulous claims because of the information
displayed on their Caller ID. Spoofed phone numbers were
instrumental in leading victims to believe the call they
received was for real.
The case in which Ms. Stancik testified was investigated by
Postal Inspectors in North Carolina with assistance from the
Federal Bureau of Investigation, Internal Revenue Service,
Homeland Security Investigations, and prosecuted by the
Department of Justice Fraud Section.
The investigation entailed an offshore call center run by
Andrew Smith, a Jamaican national, and Christopher Griffin, a
U.S. citizen, both living in Costa Rica. Smith and Griffin,
along with others they supervised, posed as representatives of
the Securities and Exchange Commission and Federal Trade
Commission. They contacted consumers in the United States,
claiming they had won a prize.
The Costa Rican call center took steps to conceal its true
identity, using call-spoofing technology that made it appear
the calls they made came from Washington, DC, which lent
considerable weight to the scam. Other Internet-enabled
technologies also played a part. At trial, one victim testified
she was warned to keep paying as the caller knew where she and
her family lived. He used images and other information from the
Internet to make his point.
Payments to Costa Rica were sent by wire transfer or
through money orders sent by mail or private couriers. Smith
and Griffin also hired runners to meet victims at their homes
to collect their cash.
Nine defendants were charged. Eight worked in the call
center, while one was caught laundering funds between the
United States and Costa Rica. Postal Inspectors identified
approximately 1,800 people living who collectively lost more
than $10 million just in connection with this particular case.
One such person was Ms. Stancik's grandmother, Ms. Marjorie
Jones.
Several defendants were extradited to the United States,
while others were arrested within the United States. Three
remain fugitives. Smith and Griffin were both convicted and, in
April of this year, sentenced to more than 20 years in Federal
prison. Ms. Stancik testified on behalf of her grandmother at
the sentencing of one of the defendants.
The Inspection Service is aggressively investigating frauds
where there is a connection to the U.S. Mail, even when the
mail is not the first point of contact. We participate in the
newly formed Department of Justice Elder Fraud Strike Force and
have Inspectors working full-time in Jamaica and in EUROPOL in
The Hague.
We also know an issue as broad as this requires efforts on
many fronts. We engage with consumers of all stages of life to
teach them how to recognize schemes and take steps to safeguard
their finances, including how to contact service providers for
help blocking these unwanted and unsolicited calls.
Again, I want to thank the Committee for holding this
hearing. I applaud the Committee's efforts to address the issue
of phone technologies that facilitate schemes and that give
scammers an unfair advantage.
Thank you.
The Chairman. Thank you so much for your testimony and for
the great work that you are doing.
Mr. Frankel, thank you for being here.
STATEMENT OF DAVID FRANKEL, CHIEF EXECUTIVE
OFFICER, ZIPDX LLC, MONTE SERANO, CALIFORNIA
Mr. Frankel. Thank you and good morning, Senator Collins,
Ranking Member Casey, and members of the Special Committee. My
name is David Frankel; I am the CEO of ZipDX LLC, a provider of
specialized telecommunications applications. I am honored to be
here.
I note that this week we are celebrating 50 years since
some smart Americans came together and put our own on the Moon.
I would like to believe that two generations later we can
collectively across industry and enforcement and regulation get
our phone network back from the scammers that have taken it
hostage.
In my remarks today, I want to share my perspective on
illegal robocalls, including how they work technically and
commercially and why they persist. I will attempt to convince
you that this problem can be addressed through a cooperative
and focused effort to stop robocalls closer to their source.
I have prepared a diagram that illustrates the path taken
by most robocalls. Before I start, I want to make a critical
point clear: There is no way to send a call, robo or otherwise,
to a U.S.-based consumer telephone except by arrangement with a
so-called originating provider here in the United States. In
other words, robocallers located outside the United States, or
inside, for that matter, must buy what is called ``call
termination'' service from an originating provider to get their
robocalls onto our U.S. network. Calls typically pass through
multiple subsequent providers before reaching the telecom
carriers that directly serve consumers.
These originating providers do not have to invest in any
equipment. Standard computing resources can be used to process
these calls, and those resources can easily be rented in the
cloud. They do this with Voice over Internet Protocol and so
are referred to as ``VoIP providers.''
The robocallers' approach is to place an enormous number of
calls through his VoIP providers in the hope of finding a
handful of victims. If a robocaller snags just $100 from each
of 50 victims a day, he could collect $100,000 a month. He will
need to hire a few humans to close each deal, but the magic of
robocalling is that most of the work, making millions of very
cheap calls in search of potential victims, is done by
computer. Even after paying his staff and those phone
providers, our example robocaller could be clearing 70 grand in
profit each month. It is no wonder that this is such a
profitable endeavor.
The select subset of VoIP providers that enable the
robocallers are generally small operations with low overhead.
On a monthly basis, a VoIP provider in this country serving
multiple robocallers and placing 100 million robocalls onto the
U.S. network could earn $50,000 to $100,000 in profit. Thirty
such operators would account for 3 billion illegal robocalls
each month.
The best place to stop this illegal traffic is with those
providers where the traffic is most concentrated. As the
illegal calls move through the network, they disperse and are
commingled with other calls, making detection more difficult.
We should know the source of each call from its Caller ID,
but that takes us immediately to the problem of spoofing.
Illegal robocallers and scammers go out of their way to choose
a VoIP provider that allows them to play fast and loose with
Caller ID. Ultimately, the new SHAKEN/STIR protocol that
carriers are implementing will help make clear whether a Caller
ID is authentic. But while we wait for that protocol, the
telecom industry today has a process called ``Traceback'' to
identify the source of a given call. Providers have records of
each call handled by their networks. Working cooperatively,
each provider, starting with the carrier that serves the called
consumer at the bottom of my diagram, searches its records and
identifies the next provider in the chain upward that passed
the call to it until the provider who allowed the robocalls
onto the network in the first place is reached.
Traceback used to be entirely manual and required subpoenas
to each provider, taking weeks to months. Now the process has
been automated and can be completed in days or even hours. We
do not have to trace back billions or millions of calls. One
successful example can get us to the source. By tracing back
selected call examples from illegal robocall campaigns, the
providers that allowed those calls onto the U.S. network can be
identified and notified to take steps to stop the calls.
Regulators must step in where providers refuse to mitigate the
calls.
In closing, we must be prudent about who gets what kind of
access to the U.S. telephone network. It makes no sense for a
robocaller in India, identified only by a gmail address, to be
placing huge numbers of calls that look like they are
originating from all over the USA. VoIP providers within our
own borders that allow that to happen are the best choke point
to stop the illegal robocall scourge. We must engage those
providers to be part of the solution rather than contributing
to the problem.
I welcome your questions.
The Chairman. Thank you very much, Mr. Frankel. I am going
to start with you because I feel strongly that, given the
enormous creativity of these ruthless criminals, we need a
technological solution that is closer to the source.
I have been trying to sort out--and that is why your
testimony is so helpful--whose responsibility is it to try to
identify these bogus, illegal robocalls, and you talked about
that they are small operators, but that they choose a VoIP
provider that allows them in, so whose responsibility is it? Is
someone making a lot of money from allowing these calls into
the system? We know the scammers are making billions of
dollars, as your example shows. But talk a little bit about
whom we should hold accountable.
Mr. Frankel. Certainly. Thanks for the question, so it is
indeed these small VoIP providers that are allowing those
scammers to make their calls. In the universe of
telecommunications providers--and there are many, many
hundreds, a few thousand of them perhaps, in this country--most
of them are upright businesses, and they are providing various
kinds of services to consumers, to other businesses that all
have legitimate needs to use the telephone network.
There are a small number of VoIP providers that cater to
the kind of traffic that is associated with robocalling, and
there are illegal robocalls, and there are legal robocalls, so
we talk about prescription reminders and school closings and
things like that which involve blasting out a lot of calls
periodically, and those are legitimate robocallers, and there
are providers that serve them.
Those same providers or providers holding themselves out to
serve that kind of need are the ones that are also potentially
conduit for these illegal calls, and those are the ones where
we need to have our focus and they need to be called upon to be
more diligent about to whom they grant access that allows the
massive calling and the spoofing that we see in the illegal
robocall domain.
The Chairman. Thank you. That is very helpful.
Let me just ask one other question. Is there a
technological barrier that makes it difficult to identify these
bad actors?
Mr. Frankel. Another great question, some might tell you
that it is challenging to know what is a good call and what is
a bad call. That is especially true because telecommunications
providers generally do not have access to the content of the
telephone call. That is private, and technologically they are
not monitoring what is being said when a call is placed, so
they do not know whether somebody is saying, ``Your
prescription is ready,'' or, ``You have just won a giant
sweepstakes.'' There are other characteristics that the
telecommunications providers do have access to that can make it
much more apparent and at least raise suspicions.
For example, when a customer is overseas, or even when they
are in this country, and they are making massive numbers of
calls and each one is from a different number, the Caller ID
shows a different number, that is suspicious. Why would that be
the case? Who would legitimately be doing that? If I am a
school, I am going to use the same number for every call I
place. If I am the pharmacy, I will have perhaps a group of my
pharmacy numbers in my library, but I will not be using other
random numbers, thousands, millions of them from all over the
country, so there are those clues, and the provider has the
technology to screen what number their customers are providing
as the Caller ID when the call is placed.
There absolutely are technology approaches and solutions
that can be applied if you choose to apply them. And you will
know that, as I said, there are thousands of VoIP providers or
providers of telecommunications services. These robocalls do
not originate from the vast majority of them. They originate
through a very small set of them, so we have an existence proof
that they can be prevented.
The Chairman. Thank you very much.
Senator Casey. Thanks very much.
Sheriff Sanders, I will start with you. You recently put an
ad in the local people in Delaware County that we wanted to
thank you for because you were providing a kind of public
education campaign about this issue, and I have no doubt that
that warning that you put in the paper prevented others from
falling victim to this crime.
I guess the question I have for you is: What did you learn
from that experience, Number one. Number two, how would you
recommend other law enforcement, especially local law
enforcement officials, engage in order to prevent this kind of
crime from being perpetrated?
Mr. Sanders. I believe that some agencies----
The Chairman. Could I ask you to turn on your mic, please?
Mr. Sanders. When other agencies become aware of phone
scams, I think that they should also make it known to the
public. I think that we should participate more in community
service in terms of going into senior homes, senior residences,
and speaking about phone scams and making people aware. I think
it is a joint effort that we all should, as we say here, make a
concerted effort to inform the most vulnerable portion of our
population.
I believe that the danger in not doing so makes the job of
law enforcement officers more dangerous because if people are
paranoid about authority and legitimate authority and cannot
tell the difference, our deputies, our officers on the street
can be exposed to additional danger when they knock on the door
and the citizen is paranoid about exposure to legitimate
authority and overquestioning on both sides. The deputy may be
there for a legitimate reason, may have a warrant, and deem the
activity on the other side of the door as being suspicious
enough to break, and here it is just a senior that has become
so questioning because they have been exposed to a phone scam.
I think that this is contagious, and it can spill into
other areas of law enforcement and make it more dangerous for
our officers and also more dangerous for the public.
Senator Casey. One thing you mentioned as we were talking
earlier today in the back is the potential to create both
danger but also doubt. In other words, when law enforcement
approaches a citizen, they may have doubts about that law
enforcement official or about the institution they represent
because of the proliferation of this fraud.
Mr. Sanders. Yes.
Senator Casey. And you have run into that directly, I
guess, in some way or another.
Mr. Sanders. Well, before becoming sheriff, which is more
administrative than hands on, I was a deputy for 23 years, and
when you knock on a door and you show your identification when
someone answers, if they are suspicious of that, that is a
situation that could escalate, and it could stem from paranoia
that began with phone scams.
Senator Casey. Well, we appreciate the fact that you have
brought real-life experience to this, not just from a distance
but from what you and your deputies have had to encounter.
Your testimony also highlighted a situation where your
deputies went to a bank to stop that resident from actually
completing the transaction, which would have cost them
thousands of dollars, and we are grateful for that. I have
introduced a bill, as I mentioned, to help educate basically
three groups of folks: bank tellers and others at financial
institutions, individuals who work at wire transfer companies,
and the third is those who work in a retail establishment.
Tell us about how that might have an impact and anything
else you hope that we would do by way of policy change or
legislation.
Mr. Sanders. Well, I consider all of these things that we
are talking about connected. Being here today, I think it is
part of a multi-pronged, proactive effort to educate our
seniors. I think that what we are talking about now should be
part of our conversation wherever we are at, in the houses of
worship, community centers, every level of government when they
have the forum where the public can speak, they can inform the
public, Federal as we are doing now, State, local--from all
corners, multi-pronged and concerted to alert our seniors. They
need us to do that.
We also know that suspicion can be triggered by a senior
that may have early onset dementia or some ailment that is
associated with or more prevalent among our seniors, so we have
to be there for them.
Senator Casey. Thanks, Sheriff.
The Chairman. Thank you.
Senator Braun. Thank you, Madam Chair.
Normally, when we are talking about something like this, we
do not have something as simple as a choke point. When you
mentioned that, that really kind of converges on, you know,
what the solution is to the problem. I have got several
questions here, and this is directed at Mr. Frankel, if you
could give me some quick answers. How long have scams been
around before technology made it really easy. Has this been
around since landlines, or is it----
Mr. Frankel. Thank you, Senator. To my knowledge, my own
personal experience, going back decades, the phone network has
been a conduit for scams of various kinds. In the beginning
they were scams against the phone company. There was a
technology called ``blue-boxing'' that scammers used to extract
money from phone companies, to get around pay phone charges and
things like that, so it is as old as that.
Senator Braun. The recent focus on the elderly has kind of
been along with the technology that is present to do it?
Mr. Frankel. That is correct. As phone calls have gotten
cheaper--some of you will remember when we used to pay 25 cents
to call across the country per minute, and now it is just
included in your cell phone plan, so technological progress has
brought the cost of calling way, way down, has made mass
calling available more readily to more people, including more
scammers.
Senator Braun. How many VoIP providers roughly are out
there? You said it is basically a small group that kind of
specializes in the scam.
Mr. Frankel. Well, I want to be clear that there are a
number of VoIP providers, and many of them are legitimate.
Senator Braun. Roughly how many would that be?
Mr. Frankel. I think there probably are a few hundred
businesses that use VoIP at the core of their business. Maybe a
thousand even.
Senator Braun. Yes.
Mr. Frankel. I would wager that there are a few dozen that
are positioned to have their platforms used for illegal----
Senator Braun. That seemingly would even make it easier to
remedy this.
Mr. Frankel. You would think so.
Senator Braun. I look at it kind of similar to the opioid
crisis where now we know that distributors, you know, had all
the data, saw something was askew, just did not do it. Here it
looks like, you know, it is an issue where it should not be
that difficult to flesh this out.
The next question would be: Has any third party taken an
interest in actually going after these couple dozen scammers in
the same way when you need help, you generally have someone
there that is going to help out the victim that has made this,
you know, a mission? Is anybody out there trying to help the
elderly that are getting scammed outside of the families?
Mr. Frankel. Well, I do not know that I can speak to that.
I can tell you that within the telecommunications industry, I
think we are seeing more and more and more support for
identifying and highlighting and dealing with these VoIP
providers that are the conduits for the----
Senator Braun. I think that would be wise for the
telecommunications industry, because the middleman distributing
drugs that were knowledgeable of it are all getting sued in
some form or another.
Mr. Frankel. I think it is a great analogy that you have
brought up.
Senator Braun. Yes. Have there been any civil or criminal
cases filed against anybody within the telecommunications
circuit, specifically the dozen or so VoIPs?
Mr. Frankel. One of the things that has surprised me is
that when the regulators have gone after the illegal
robocallers, they go after what they call the ``callers,'' the
``scammers.'' In fact, if you read the indictments and the
other notices, they do not name who the VoIP providers are that
enabled that to happen.
Now we are seeing a shift. I have just this week been
talking to enforcement authorities in this town, and they do
have license revocation authority. They do have injunctive
authority, and I am hoping----
Senator Braun. They have not used it.
Mr. Frankel. I am hoping that we start to see that happen.
Senator Braun. I will finish with this: It is like many of
the things I have been involved with here in a short time. It
amazes me how the underlying industries have the knowledge, put
up with it; it gets to a Committee hearing before anything gets
done.
I would say, like I have admonished the health care
industry, when it comes to fixing itself in general, the
telecommunications industry and VoIP ought to be concerned, and
it is surprising to me that they have not been taken to task
already. That is disappointing.
Mr. Frankel. They are concerned, and I think we are
rallying the troops.
Senator Braun. Thank you.
The Chairman. Thank you, Senator.
Senator Sinema. Thank you, Chairman Collins, Ranking Member
Casey, and all of our witnesses for being here today.
Robocalls are the No. 1 consumer complaint that the Arizona
Attorney General receives, and more than 550 million robocalls
have been placed to Arizonans in just the first 6 months of
2019.
Robocalls are more than just a nuisance, and while not
every call is a scam, we must go after the criminals who use
robocalls to harass seniors. For example, some criminals pose
as utility bill collectors and threaten to shut off people's
power in the dead of summer. In Arizona, where summer
temperatures can easily top 110 degrees, that is a threat to a
senior's health and well-being, and some do pay out of fear.
I also heard from Maggie, who is here today, whose elderly
parents in Tucson, Arizona, were robbed of their life savings
in a sweepstakes scam. Maggie's father is a 20-year veteran of
the United States Air Force, living with Alzheimer's, and has
lost much of what his family saved from his military pension.
Their story is horrifying, but all too common, and that is why
I have worked with Chairman Collins to pass the Senior Safe Act
into law last year, which empowers financial institutions to
identify and stop financial exploitation before families like
Maggie's lose everything.
I am proud to join Chairman Collins in introducing new
legislation this Congress, the Anti-Spoofing Penalties
Modernization Act, that updates existing penalties for illegal
spoofing that have not changed since they first became law in
2010. Our bill also helps enforcement partners by extending the
statute of limitations for these violations from 2 years to 3
years.
There have been increasing reports of hospital systems
getting inundated with thousands of robocalls a day, which jams
their phone systems and puts lives in danger. I heard from a
doctor in Scottsdale who is required to have her cell phone
with her at all times. She worries that every wasted minute
listening to an automated recording is a minute that is being
taken from a patient or a medical emergency.
This leads me to my first question to Mr. Frankel. What
could businesses and organizations, especially those that serve
vulnerable populations, do to combat these scams? To what
extent do you believe these types of scams that target
hospitals or pretend to be from law enforcement or from IRS
impact public health and safety?
Mr. Frankel. Well, Senator, thank you for the question. I
think whether it is a hospital or it is some other agency, I
mean, these are all damaging. And the robocallers are
indiscriminate in who they choose to target. It is just a
fishing expedition for them to see what works. They trade
stories amongst each other about what the most lucrative scam
is, and if it turns out the scam of the week is to target
hospitals, then that is what they are going to do. It
absolutely impacts the institutions, and I think that, again,
as the recipients of those calls, their ability to mitigate
that is--it is too far down the line to ask them to try to do
that. We can make them cautious. We absolutely have to educate
them. But we have to go back to the root cause.
In fact, I will tell you that I have spoken with a VoIP
provider in Scottsdale who admitted to me that he was allowing
4 million calls a day onto our network from a customer of his
in India, where all of those calls are spoofed. The Indian
caller is claiming to be calling from the United States, and he
is allowing this, and he is livid with me for calling him out
on it, and he has told me he is not going to cooperate with me
further, and that if I want to get more information from him, I
can get a subpoena, and so, you know, now I will chase down
authorities who can do that, but there is no excuse for that.
Senator Sinema. My second question is also for you. Adam
Dupuy is an assistant professor in the School of Computing
Informatics and Decision Systems Engineering at Arizona State
University. Experts like Adam have called for a national effort
to build a detailed map of the robocall ecosystem and have
raised concerns about Traceback and the new SHAKEN/STIR
protocols not being a silver bullet.
In your experience, do you believe there will still be gaps
in how we protect people from robocalls? Are there specific
challenges in rural areas that depend on older legacy
telecommunications systems?
Mr. Frankel. Thank you for that. I do not believe that we
will ever get this problem down to zero. The scammers are very
clever, and we will need to have programs and systems in place
that react to how they react to what we do, so it is a moving
target, and we need to plan for that.
That said, I think that there absolutely are things that we
can do that will dramatically reduce and limit this.
With respect to your question about rural communities,
certainly with respect to SHAKEN/STIR, call authentication
technology, that is a new technology. It relies on new networks
in order to work, and traditionally--and we know from the rural
providers that they tend to be the last to upgrade their
networks, so their ability to take advantage of that new
technology and offer that new technology to their customers is
some long way, years away. But these robocalls, these illegal
robocalls do not come into our network through rural carriers.
They come into the network, as the diagram showed, way upstream
from them, and if we stop them there, we will stop them for
everybody, and they will not be able to reach urban dwellers,
and they will not be able to reach--or they will be at least
very limited in their ability to reach rural customers as well.
Senator Sinema. Thank you.
Thank you, Madam Chairman.
The Chairman. Thank you.
Senator McSally. Thank you, Madam Chairman. I really
appreciate you having this really important hearing today. It
is impacting so many of all of our constituents around the
country. And I do want to point out Maggie Dickens, who is here
today--can you raise your hand, Maggie, and say hi?---and her
story of her parents that were robbed of nearly $750,000
because of these scams, and I want to share more of her story
because I think it is so important as we look at this issue.
The individuals who stole from her not only convinced them
to wire the money, but trained her parents to wrap cash in
magazines to send through the mail. They prepared scripts for
them to read to a banking institution to legitimize the need to
send these thousands of dollars internationally. They
impersonated her parents over the phone to the life insurance
company, allowing them to cash in her parents' life insurance
policies.
When the criminals did not get answers fast enough--and I
am reading your testimony--from Maggie's parents, they ``sent
taxicabs to my parents' home to deliver messages and try and
get my parents into the cabs. Additionally, the individuals
instructed my mother to open multiple credit card accounts and
advance cash and buy a large number of gift cards from retail
stores, all of which were sent overseas.''
They are both elderly, and your father was at the beginning
stages of Alzheimer's when all this happened, and he is a 20-
year Air Force veteran.
As they have gone through this experience and Maggie
started--as you understood what happened, you think about how
many people were touched just by what I just--how many people
they interacted with through this whole process. It starts with
a robocall. But then there are so many other people who are on
the front lines of identifying that something not right is
happening here, but nobody acted.
We have had a lot of great discussion today about what more
can be done. First, we have got to stop the robocall in the
first place. But there were so many other indications that they
were about to be robbed. What more can be done, Sheriff
Sanders, what you have seen in your experience, to address this
at the front lines of all these other people who were touched
in the midst of this scam as their life savings were robbed?
This is so tragic, and, Angela, your story is similar, but it
is happening everywhere. What else can we do, Sheriff?
Mr. Sanders. Well, the typical answer would be more police.
That is not the answer here. The answer is what we are doing
now. The answer is requiring the laws that are being proposed
by Senator Casey to be passed so that the technological
industry has some constraints and expectations, legal
expectations that it has to live up to. It is everything that
we are talking about. It is everything. It is family looking
out for elderly relatives. It is friends looking out for
elderly friends and making them aware of what we are aware of.
Everyone here needs to be making this part of our daily routine
and dialog when we come in contact with a senior, and they are
coming at us in a technological way, but our response has to
be----
Senator McSally. In a human way.
Ms. De Leon-Colon, you said that veterans are more likely
to be scammed. Maggie's dad was a veteran, so can you elaborate
more on this? As a veteran myself, this is deeply disturbing.
Ms. De Leon-Colon. Yes, it is because the scammers, they
are going to lock onto victims that will provide a benefit to
them through their schemes, so the veteran's benefits, it
entices the scammers in order to obtain access to their
information.
In order to add to what Sheriff Sanders said, education is
a great piece. We have to educate our veterans and their
families the same way that we have to educate the elderly. But
it is very important that we education the community as well as
their families in order to be able to identify when one of our
family members, elderly or a veteran, is being targeted.
Another aspect that we have to look to veterans is because
they utilize emotion, so they know that the camaraderie within
the veteran community is large, so when they entice them, they
tell them that they are veterans as well. They come into
conversation scheming up situations where you are going to help
other veterans, creating charities as well in order to help
your brother, and that is how they entice veterans.
Senator McSally. There is a special place in hell for
people who are preying upon those who served and sacrificed for
our country. We need to go after these people. But it starts
with a phone call.
I have got a neighbor. She is in her 60's. She is pretty
technologically savvy, and she all of a sudden is getting
nonstop calls. We do not know what shifted and what list she
got on, but nonstop robocalls, and the technology has got to be
there to stop it. I know we have talked about it. She has gone
to the provider, and they are saying, ``Well, you have got to
upgrade your phone if we are going to try something else on
it.'' She does not have the ability to upgrade her phone. She
cannot afford to upgrade her phone.
What else can we do, Mr. Frankel?
Mr. Frankel. Well, I hate to sound like a broken record,
Senator----
Senator McSally. I know.
Mr. Frankel [continuing]. but by the time the call gets to
your neighbor and to her provider, it is lost in a sea of
millions of other calls, many of which are legitimate, so
identifying it at that point is very, very difficult for her
provider. The stopping of the calls needs to move upstream to
the point where that concentration of millions of illegal calls
is coming into our network. That is the provider that has the
ability to identify and stop the calls, and unlike the rest of
the telecommunications community that is rallying and, like
you, is livid about these calls, these guys are just asleep at
the switch and letting it happen.
Senator McSally. They need to do more. In fact, the guy
there at the store said, ``Well, I just ignore them when they
come in.'' You cannot ignore hundreds of calls every day, and
you are missing out on loved ones and others.
I know I am way over my time, so thank you all for your
testimony, and thank you, Madam Chair.
The Chairman. Thank you very much for describing Maggie's
story as well. We appreciate that.
Senator Jones. Thank you, Chairman Collins, and also, thank
you, Chairman Collins, for all your leadership on this issue.
It is so important. As someone who has elderly parents, one of
whom still lives by her telephone, it is really important.
I want to highlight something because one of the problems I
see that we have--the education, we have talked about it.
Everybody has talked about it, and I want to come back. But
when elderly folks get calls from someone who appears to be a
legitimate law enforcement office or whatever, you can talk to
them all day long. But if the sheriff calls, they are going to
take that call, and recently, we had a constituent--and I think
this is all important for us on this dais here--call us to tell
us that they had gotten a call from Senator Jones' office
checking up on their Social Security benefits, and they have to
verify information about their Social Security number because
they are in--we have checked and my office knew that they were
about to lose their benefits if we did not get their number and
help them verify that. Now, that senior was smart enough to
call our office and say this is happening, so we are doing
that.
We can talk about education a lot, and I agree, and I talk
to my mom all the time about this. Where are our seniors,
though, getting most of their information so that the education
can be there? There are not that many of them out there that
are watching C-SPAN today to watch this hearing. There are not
many out there that are going to always read--my mom cannot see
good, so she gets something in the mail, she cannot see it.
Sheriff, Ms. Stancik, I think you can answer this better.
When we are educating folks, where are they getting their
information? Because it is a different generation that is not
getting it all on their telephone or their iPad. They are
looking at TV; they are listening to radio. Where can we do
that? Where are they getting their information? I will leave it
to anybody to answer that.
Mr. Sanders. Mr. Jones, I believe one place that should be
informing our seniors is places of worship. Many of our seniors
attend regularly, and I think that the leaders in faith-based
organizations should make this information available to our
seniors.
Senator Jones. Okay. Ms. Stancik, do you want to--where was
your grandmother getting her information?
Ms. Stancik. I would say doctors' offices would be a good
place. Anyplace like you said, in church, even with PSAs or
other mailers that they can get, they do get a lot of mail. But
things that are easy for them to understand and easy for them
to read I think would help. But doctors' offices, places of
worship, all those are really good places to reach our elderly.
Senator Jones. Okay. Is it television? Can the media
companies help with this when they understand and know a scam,
that you report a scam, can somebody--can we tell the FCC or
somebody to say, for God's sakes, do some public service
announcements about this? And not just do it on the nightly
news because they do not always watch the nightly news. Would
that help?
Mr. Sanders. All of the above.
Senator Jones. All right. Mr. Frankel, let me followup with
you real quick because technology jumps way ahead quickly, and
I think that the generation--my mother's generation now and
maybe mine--I am 65, and so maybe even mine--they are not
always as technologically savvy. But as our population ages and
my children and those in the 50 or so range, they are going to
know about this a lot better. They are going to be better
educated. But there is going to be something else.
What is it we have got to do to stay ahead of the game?
What are we looking at in 5 years, 10 years down the road so
that folks that are 50 years old now or 55 years old now, who
are pretty technologically savvy and they know when they get a
call from the sheriff that they are going to come arrest them
because they did not pay a parking ticket, they know that that
is a scam. But what is the next big thing here that we need to
be looking at? How do we stay ahead of the game?
Mr. Frankel. Well, sometimes I say, Senator, we need to
think like a robocaller or think like a scammer. First of all,
the stories we have heard, the scammers are employing a broader
range of technologies. It may start with a robocall today. I
think as long as the telephone is around, they are going to
continue to use it. We have seen scams that originate in email,
so that is an ongoing threat. But I think, my prediction is
that they are going to become more targeted. There is going to
be more social engineering. We have got so much information
about ourselves now out on the Internet that it is very easy
for a scammer to go and research all the details, and now you
have gone and admitted exactly how old you are and who your
parents are and so on, and they can go find all that
information pretty quickly.
Senator Jones. It has been out there for a long time
anyway, so that is OK. But I get what you are saying.
Mr. Frankel. I understand, but it is becoming more
available and more detailed, and scammers are going to become
more resourceful in using it to establish credibility and to
perpetrate scams of larger scale, more damaging scams in a more
targeted way. That is my prediction.
I also think that it is going to move to businesses, so you
are going to see--we have seen it a little bit, but there are
businesses that have been bilked out of hundreds of thousands
of dollars and millions through wire transfer scams and things
like that where people impersonate the CFO or the comptroller
or the treasurer or something like that, and they can do that
credibly because they have gone and gathered a lot of
information on the Internet, and then they use the telephone as
an entry point.
Senator Jones. Great. Well, thank you. Thank you very much.
Thank you, Madam Chairman.
The Chairman. Thank you.
Senator Hawley. Thank you, Madam Chair. Thank you for
holding this hearing on such an important topic, and thanks to
all of you for being here to discuss an issue that,
unfortunately, affects all of us every day.
You know, I served as the Attorney General of my State, and
I can tell you that this was the top consumer complaint to my
office by far, and just last year, 2018, we had nearly 50,000
complaints in the State of Missouri, 50,000 complaints of
illegal telemarketing calls, and many of those came from
residents who were signed up on the State's no-call list. You
can imagine their incredible frustration to understand why in
the world they are still getting these calls.
As Attorney General, I joined a multi-State coalition of
other Attorneys General to seek ways to stop and reduce
robocalls, and these fraudulent schemes are outrageous
violations of privacy, I know firsthand, and frustrate and harm
Missourians and Americans on a daily basis.
Like many of my colleagues here on the Committee, I was
proud to cosponsor the TRACED Act, which passed the Senate in
May, and I am proud to join Senator Collins on the Anti-
Spoofing Penalties Modernization Act, which I hope will soon
move forward, and I hope that both of these will make a real
difference.
Mr. Frankel, can I just start with you? I want to come back
to the topic that Senator Sinema raised about rural
communities. Looking at the STIR/SHAKEN authentication
technology, a lot of rural carriers still use the legacy--and
you were, I think, alluding to this with Senator Sinema---the
legacy time-division multiplexing, TDM, networks rather than
the voice IP technology, so am I right in thinking that the
STIR/SHAKEN authentication technology cannot be used by
carriers that use TDM networks? Is that right?
Mr. Frankel. In its present form, that is correct, Senator.
Senator Hawley. Can you just give us a brief description
for the lay person as to why those two are not compatible, why
we should care about that, why that is a problem?
Mr. Frankel. Well, you should not have to care about it.
The industry should care about it for you. But a brief
explanation, the TDM technology dates back to the late 1970's,
deployed largely in the early 1980's. You know, the same reason
that you cannot run modern programs on a 20-year-old computer,
these protocols do not work in that old technology. It is good
enough to carry telephone calls, but it is not good enough to
carry all of the signatures and the encryption data that is
associated with this latest STIR/SHAKEN.
Senator Hawley. Got it. What are some other ways, then, in
your view, that we can protect rural residents and others who
use carriers that rely on TDM networks? You mentioned stopping
these calls up network. What are some things, what are some
solutions for folks who use these networks that we can be
pursuing?
Mr. Frankel. Well, I really do believe stopping it up
network where the calls do enter our U.S. telecom system, that
is the right place to stop them, and that is not dependent on
all of the technology down at the customer-serving, the
consumer-serving level, be it rural or otherwise. That is
dependent up higher in the system where we have a small number
of providers through which the bulk of these calls come. That
is where they should be stopped, and the providers down there
at the consumer level I think should actually be demanding of
the rest of the industry upstream, saying: Do not send us this
garbage. We will not accept it, and we require that you and the
people upstream from you, everybody up the chain, needs to be
responsible and needs to be diligent and do whatever it takes
to stop those calls.
Senator Hawley. Are there policy steps that we could take,
regulatory or otherwise, incentives that we could put in place
to help stop these up network?
Mr. Frankel. Well, I think there is certainly encouragement
that you can provide to do that. Certainly I also hear concerns
from the industry. We are a very litigious society, and so, for
example, providers are concerned that we are going to get in
antitrust trouble if we all agree down at the customer-serving
level that we will not accept this garbage from up higher. Is
somebody going to accuse us of colluding to stop robocalls?
Now, I think that is ridiculous, and you are smiling, but I
hear that, you know, routinely from people. We need to be very
careful what steps we take because we do not want to get in
that kind of trouble.
I will tell you that I went to a few having identified a
couple of these providers, I called them, engaged with them via
email and telephone, saying, ``Please can you stop.'' And what
I got back from two of them was threats that they were going to
sue me for fraud and harassment. Can you imagine, these
providers that are putting millions of calls, garbage calls, on
the network every day are telling me that I am acting
fraudulently and harassing them?
Senator Hawley. That is incredible.
Thank you, Madam Chair.
The Chairman. Thank you. That is absolutely outrageous.
Senator Blumenthal. Thank you all for being here today.
Thank you, Madam Chair, for having this hearing.
If this is the fifth hearing on robocalls since I have
been in the U.S. Senate, it is probably the 150th. I was
Attorney General of my State as well. This problem has been
endemic as a consumer challenge for years and years, and the
technology is there to stop these calls, correct? I do not see
anyone disagreeing. It is there.
I have introduced a measure called the ``ROBOCOP Act,''
which would require telecom companies to verify Caller ID and
provide--here is the important part--free robocall-blocking
technology to consumers. We have taken action in the Commerce
Committee to approve a measure that is called the TRACED Act.
It is on the floor of the Senate now. But it still fails to
require this technology, which is there and it has been there
for years, to be provided to consumers.
Is there anyone here who opposes the ROBOCOP Act? Or to put
it more positively, would all of you support a measure to
provide this existing technology to consumers to block
robocalls? And we are not talking about public service, you
know, your community is about to be flooded or there is a
criminal shooter in your midst. We are talking about commercial
robocalls that are done to harass and exploit seniors and the
rest of us. Anybody here who opposes it? Would everyone here
support it?
Mr. Frankel. Senator, if I may, I do not oppose the bill,
but I have to tell you that the blocking technology at the
terminating end of the call where it is about to be delivered
to the consumer is trivially defeated by a robocaller.
Senator Blumenthal. Well, with the great scientific
knowledge we have--and we are celebrating the Apollo
anniversary. If we can put a man on the Moon, can we defeat
that kind of robocall ingenuity?
Mr. Frankel. That is absolutely what we have to do, but you
have to recognize that for every phone call that there is a
point of origination and there is a point of termination. There
is the caller and the called party, and if the caller's
provider is complicit in the perpetration of these illegal
calls, then at the terminating end they are virtually helpless
to do anything about it, so engaging the major providers to
provide the best blocking technology they have is not going to
work if there is somebody at the originating end that is
complicit in defeating that technology.
Senator Blumenthal. What would be necessary in terms of
technology to block that complicity?
Mr. Frankel. Well, you have to hold those originating
providers accountable for what they allow onto the network.
Senator Blumenthal. Are suggesting that holding them
accountable, holding them legally liable would be the answer?
Mr. Frankel. I think that would be helpful, yes.
Senator Blumenthal. That should be part of the bill?
Mr. Frankel. I am not a law writer, but I think we should
figure out, yes, how--they are so obstinate, this handful, I
think there are tools that exist today that we need to fully
deploy to rein them in, and to the extent that can be
backstopped with legislation, I think we should be pursuing
that.
Senator Blumenthal. Thank you.
Thank you, Madam Chair.
The Chairman. Thank you, Senator.
Senator Rick Scott. Thank you, Chairman Collins and Ranking
Member Casey, for doing this. Clearly, in Florida, as Senator
Rubio and I will testify, both of us have had plenty of phone
calls from people that have been scammed, and we have got a lot
of senior citizens in our State.
Ms. De Leon-Colon, thank you for being here from the great
State of Florida. What else can we be doing to just get the
public--I mean, the best thing is that the public would know. I
think we ought to pursue what Senator Blumenthal was talking
about, what legislation we can do. But what should we be doing
to get people more knowledgeable?
Ms. De Leon-Colon. What the Postal Inspection Service is
doing, we have compiled a series of public announcements that
they are focused toward elderly and they are provided across
the Nation, and we have actually collaborated as well with the
National Center on Elder Abuse in order to prepare literature
that will actually focus and speak to that senior citizen so
that the information that they are receiving is good for them
and is in a way that they can understand, and they are informed
on how to avoid being targeted, also where to report and what
to except and what the trends are as well.
We have national campaigns, National Consumer Protection
Week, that we do in collaboration with the Federal Trade
Commission, and we do that yearly. We go out to the post
offices, and we provide talks to our customers.
We also have first-line--we have our clerks out there that
have the interaction, and they usually know at the small post
offices, they know their customers, and they identify--they
also speak to them as well, and also they call us. They know to
call us.
Education is key, and it is not just to the elderly
community. It is society's responsibility, so we need to go to
those churches, we need to go to those doctors, medical
facilities. We need to have those social workers aware, and law
enforcement has to be a part of it. It is a holistic approach.
Senator Rick Scott. Just take seniors in Florida as an
example. What percentage of seniors in Florida do you think are
aware of all the games, how they can be taken advantage of?
Ms. De Leon-Colon. I do not have that information. I would
like to provide it to you at a later time.
Senator Rick Scott. OK. Do you have any feel for--I mean,
are people getting more knowledgeable about it?
Ms. De Leon-Colon. I think there is, and the way I believe
people are getting more knowledge on it is that we are
educating their family as well, so when we go visit our elder
parents, we look through the mail. Tell them to look through
the mail. Sometimes you are there, we see the phone calls. They
do have to have their autonomy, but it is okay. They took care
of us. It is our turn to take care of them. Actually, letting
society know that it is society's responsibility, it is not
just the elderly's responsibility to take care of themselves,
so I believe that has helped put the message out there.
Also, legislation, the cases that we are working in
collaboration within the State, local, and international
authorities helps as well, has helped shine a light on this
issue.
Senator Rick Scott. Thank you.
Sheriff Sanders, what have you been able to do that has
worked in your area to get--take whatever group, but seniors
more knowledgeable about what is going on?
Mr. Sanders. Community affairs, going out to the public
arena in terms of senior centers. We schedule with their
directors to appear and give advisories on this. We also put
out public information articles about web scammers, and we also
ask for suggestions as to what more we can do because all of
us, if we invite comments such as you are doing today, we are
collectively stronger. In my office, we ask for suggestions as
to what more we can do.
Senator Rick Scott. Ms. Stancik, you have been trying to
make people more aware because of what happened to your
grandmother. First of all, my heart goes out to you. What do
you think has worked the best as you have watched what is going
on around the country?
Ms. Stancik. I am not an expert. I can only speak from my
grandmother's situation. I wish that there would have been more
things in place to alert her. I know so many people that this
has happened to now. I mentioned in my testimony I know some
very close family friends who are victims of the grandparent
scam, and I wish that I would have reached out to them more to
explain to them the way that these criminals are reaching out
to them. They lost I believe $4,000 through this scam, and they
live on a fixed income, and this really hurt them.
I tell everyone I know, when I hear of a new scam, I call
my parents. I tell them. I live in a very rural area, but
everyone that will listen, I tell.
Senator Rick Scott. Thank you.
Ms. Stancik. Thank you for that question.
Senator Rick Scott. Thank you, Chairman Collins.
The Chairman. Thank you very much, Senator Scott.
Senator Rosen. Thank you for bringing this very important
hearing. I know we are here on Aging, but these robocalls,
these scams, they affect everyone regardless of age, and so we
need to bring this probably to every committee, to the whole
Senate, because it is very important.
I have to say that I have a little bit of an irony here
because I was on the floor voting in the Senate last week, and
I stepped away. I was waiting for an important call, so I had a
call from a number I did not know. I thought that was the call,
so I stepped off the floor, and I answered the phone. Well,
unbeknownst to me, my Social Security number had been
deactivated. I am standing off the floor of
the U.S. Senate as a Senator receiving a robocall you know,
with: ``If you do not press this number, you will be
deactivated.'' I mean, the whole robot voice and everything.
Now, that is--excuse me--pretty ironic when you think about
that, so--excuse me, I am suffering from a summer cold, so
nobody is immune to that, not even United States Senators.
My question is--excuse me one moment. I am sorry.
Many people, especially the elderly, have plans where they
have to pay for every incoming call--I really apologize, so do
you think--I have had calls from constituents. This really
increases their bill, so can we require cell phone companies to
have some kind of mediation so that people do not have to pay
for these incoming robocalls? Anyone have a comment on that?
Mr. Frankel. Senator, I do not speak for the industry. I am
very familiar with it. It is very difficult--in fact, as I
explained, it is virtually impossible for the terminating
carrier, for AT&T Mobility or Verizon Wireless, T-Mobile,
Sprint, to know that this is a scam call and to block it or to
not charge for it or count against a minutes plan for it.
I mean, in some cases, when they do manage to block the
call, the good news is it does not go through; you do not get
charged for it. If they put ``Scam Likely'' on it and you
decline the call, you will not get charged for it, but beyond
that, there is not a mechanism, certainly not an automatic
mechanism, and I would just tell you--I will just stop talking
at this point.
Senator Rosen. Because of my summer cold, I apologize.
Thank you.
The Chairman. Thank you, and we wish you better health
soon.
Senator Rubio. Thank you. Thank you all for being here. Let
me just say the numbers are startling: 26.3 billion of these
type of calls in 2018. It feels like at least 5 percent of them
were to me, I got to tell you, because just in the last 6
months--I just wrote some thing I remember: this robot voice
telling me I am going to jail; I forgot who I owed money to on
that one. There was another one saying they had stolen my
Social Security number at the border--these are actually
voicemails that they leave. ``Somebody stole your Social
Security number at the border. We need you to call us right
away.'' Some are in a foreign language, like a recorded
statement, so I do not know what those are about.
The point is I think I count last night I had 106 or 86--I
forget--blocked. You know, every time when you get one of these
calls, you just put it on your block list. I have more blocked
numbers than I have contacts at this point, but, you know, they
keep moving on these things and the like, so it is just
overwhelming.
Part of this, too, is you get afraid--you cannot answer
your phone for legitimate calls anymore, right? Like you pick
it up, if you do not recognize it, just because it says ``John
Smith,'' it is not John Smith. You know, they have figured out
a way to spoof so it is your local area code.
The purpose of this hearing in particular, I want to focus
on two parts. First, Ms. De Leon-Colon, being in the Miramar
office, between Broward, Palm Beach, Miami-Dade, a huge
concentration of elderly citizens, and particularly in addition
to that, a huge number of elderly citizens who perhaps are not
fully proficient in English, making them, I think, even more
vulnerable to sort of the fear, and on top of everything else,
you know, senior citizens have good credit ratings, have
complied with the law. The last thing they want to do is be
outside of it and someone is calling them telling them,
``Unless you pay us, something bad is going to happen to you.''
I think you have touched on it, and maybe I missed it
before I came in, but this really seems to me like something
that calls for a much broader, with industry participation,
public awareness, public service campaign that we have led on
multiple other efforts. Everybody knows now you do not leave an
animal in a locked car with the windows up--or even with the
windows down, for that matter, in the middle of the summer--or
at any point, for that matter. People now know you should not
be eating foods that the package has been tampered with. You
name it. On numerous occasions, with sudden infant death
syndrome, this Nation has undertaken an effort to inform people
about the dangers and the types of dangers that lie out there,
and I guess it is for everybody, but most certainly knowing the
intricacies of Florida, it just seems to me like this is
something that is beyond just the elderly population.
Oftentimes the people who spot this are their children or their
caregivers, and a lot of times, the other thing I have come
across is that when someone falls victim, they realize it, and
there is shame associated with it, so they do not want to tell
anybody about it.
That is why I think it is so important that we have a broad
sort of public awareness campaign that includes everyone from
retailers and others. You know, if an elderly person shows up
at your point of sale and is buying--I do not know what this
year's scam is. It used to be--what was it, iTunes or cards? I
mean, that is suspicious, you are buying 100 iTunes cards or
something, all the way to their caregivers, their children, and
themselves. I really, really think that this is the kind of
issue that really calls for a much broader public awareness
campaign. Everyone knows these calls are coming in. I still am
shocked at how many well-informed individuals fall for this for
whatever reason.
I do not know if that is something any of you have had
experience with, or do you think we are doing enough to inform
people? I have got to tell you, most people know these calls
are annoying. I am not sure how many people know the risks of
the scam end of it.
Ms. De Leon-Colon. Senator, education is key. Prevention--
you prevent a crime, it is not going to be enticing for the
scammers, so prevention is key, education as well, and
legislation. It is a holistic approach. Educating the elderly,
educating society does help. We brought this issue to light
today, and you can tell word of mouth, you go, you visit your
parents, you visit your grandparents, the caregivers. It has
made an impact, and I think it is important to continue because
scammers change their tactics. Technology evolves, and they
will evolve with the times as well, so it is a continuous
effort.
PSAs are very powerful. I think that also a lot of the
people who have been victimized do not want to come forward
because it does not seek certain structure. It happens--some of
the elderly, when we have sat with them during our enforcement
operations, and we speak to witnesses and victims. They come
forth and say, ``This was my last opportunity to leave
something to my family.'' It is not a matter of their
education. It is our responsibility and it is their opportunity
to leave something behind, so education is key to prevent.
Mr. Frankel. Senator, if I might, I am all for education
campaigns, and I think doing it through caregivers and through
places like where my parents live, continuing care facilities,
those are all great places to do this, and I know it is
happening and I applaud it.
I would just tell you, if I were a robocaller, down the
road I am going to call you, and I am going to say, ``Hi. I am
from the IRS. I know you have heard our announcements that we
do not make phone calls and we do not collect money via gift
cards, but we have got a new program, and that has changed.''
You say that to a million people, a few of them are going to be
compelled to believe it. You are going to sound so credible:
``It was my department that put that ad on television. That was
2 years ago when we produced it, but we have a new program
thanks to new technology, and it is actually cheaper for you
now to deal with us over the phone and to pay your tax debts
via this new''----
Senator Rubio. I am out of time, but just say that I 100
percent agree that we can tell people not to leave sugar out
because the ants are going to come, like in your example, but
you have still got to go after the ants. I ran out of time, but
I do think it is worth--it is outside the jurisdiction of this
Committee, but the idea that--one of the points you made is
that there are very few legitimate entities that need the
ability to make millions of calls per day, have a valid reason
for using different calling numbers, and it makes no sense when
they are outside of a country and their only identifier is
gmail. I think that is really worth exploring further, because
I think that is a great point.
The Chairman. Thank you very much. That is a reason for you
to cosponsor my bill to double the penalties.
It is very clear that we need an all-of-the-above approach
to this issue. We definitely need to get the technology
implemented that can stop these calls and the spoofing, which I
think is what causes people to answer and believe those calls,
and we also need effective enforcement, law enforcement for
those who have ripped off people in this country, and we need
the educational campaign.
All of you have played a role in each of those areas, and I
want to thank you so much for your participation today in this
hearing. Each of you has really made a difference.
We are going to pursue this because when you look at the
numbers, as Senator Rubio has said and as I outlined in my
opening statement, it is billions of calls coming in, and I
talked to a veteran in Portland, Maine, who testified at one of
our previous hearings, and he said, ``When I saw the IRS was
calling me, I assumed that I must have missed a tax bill.''
Then when the next call was the Portland Police Department
saying, ``We have a warrant for your arrest unless you pay up
your tax debt immediately,'' no wonder he believed that, so the
spoofing is so much a part of these scams.
I want to thank the Postal Inspection Service for your
enforcement, and the Justice Department. All the agencies are
much more activated than ever before. The TRACED Act
legislation that each of us has introduced, the Senior Safe
Act, which became law last year, is making a difference, and
allowing financial institutions to question these transactions
without worrying about violating bank secrecy or privacy laws,
so it is an all-of-the-above approach.
Our votes have started, so much as I would love to do
another round of questions, we are not going to be able to. I
would ask Ms. De Leon-Colon if you would leave with us some
copies of the literature that you held up, because we can help
distribute that. We have a Fraud Book that we put out every
year, and that would be a welcome supplement to our educational
issues.
Mr. Frankel. Most certainly, we will be glad to. Thank you.
The Chairman. Thank you.
Committee members will have until Friday, July 26th, to
submit additional questions for the record, and again, I want
to thank each of you for being here, for putting a human face
on the problem, talking about law enforcement, the educational
campaigns and technology. We need an all-of-the-above approach
to put an end to scams perpetuated through robocalls that are
literally costing Americans, but particularly our seniors,
billions of dollars each year.
Senator Casey. Madam Chair, thank you very much. I want to
thank our witnesses. In the interest of time, I will submit a
statement for the record, but I do want to thank you for the
work you did today because you have helped advance the ball on
this. We have got a lot more work to do at the prevention
level, but also at the choke point that was discussed earlier
about making sure we are doing both prevention and, frankly,
prosecution and using every bit of technology to stop it.
Ms. Stancik, we are just grateful you are willing to bring
your personal story. That has got to be very difficult to do,
but you are helping a lot of other people by doing it, so we
are grateful.
Sheriff, I will see you back home, and I will submit a
statement for the record.
Senator Casey. Thank you, Madam Chair.
The Chairman. Thank you very much.
This hearing is now adjourned. I also want to thank our
staff for their hard work, too.
[Whereupon, at 11:14 a.m., the Committee was adjourned.]
=======================================================================
APPENDIX
=======================================================================
Prepared Witness Statements
=======================================================================
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
=======================================================================
Statements for the Record
=======================================================================
Closing Remarks
Senator Robert P. Casey, Jr., Ranking Member
July 17, 2019
Thank you, Chairman Collins, for holding this hearing
today.
As we learned today, scammers are still using illegal
robocalls to pick the pockets of our aging loved ones. We also
heard about the devastating impact these calls can have on
seniors and their families. We cannot sit back and let this
continue. It is our sacred duty to step in. This is why we must
re-double our efforts to make sure that older adults are made
aware of potential scams before they send money to these con
artists. We must also continue our efforts to stop these con
artists from ever connecting with consumers. Our nation's
seniors are depending on us.
I look forward to continuing the work with you, Senator
Collins, on this important issue, and hope that we can find
some way put a stop to this once and for all.
Thank you.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
[all]