[Senate Hearing 117-131]
[From the U.S. Government Publishing Office]
S. Hrg. 117-131
FRAUDS, SCAMS AND COVID-19:
HOW CON ARTISTS HAVE TARGETED OLDER
AMERICANS DURING THE PANDEMIC
=======================================================================
HEARING
BEFORE THE
SPECIAL COMMITTEE ON AGING
UNITED STATES SENATE
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
WASHINGTON, DC
__________
SEPTEMBER 23, 2021
__________
Serial No. 117-08
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
46-487 PDF WASHINGTON : 2022
-----------------------------------------------------------------------------------
SPECIAL COMMITTEE ON AGING
ROBERT P. CASEY, JR., Pennsylvania, Chairman
KIRSTEN E. GILLIBRAND, New York TIM SCOTT, South Carolina
RICHARD BLUMENTHAL, Connecticut SUSAN M. COLLINS, Maine
ELIZABETH WARREN, Massachusetts RICHARD BURR, North Carolina
JACKY ROSEN, Nevada MARCO RUBIO, Florida
MARK KELLY, Arizona MIKE BRAUN, Indiana
RAPHAEL WARNOCK, Georgia RICK SCOTT, Florida
MIKE LEE, Utah
----------
Stacy Sanders, Majority Staff Director
Neri Martinez, Minority Staff Director
C O N T E N T S
----------
Page
Opening Statement of Senator Robert P. Casey, Jr., Chairman...... 1
Opening Statement of Senator Tim Scott, Ranking Member........... 3
PANEL OF WITNESSES
Lois Greisman, Associate Director, Bureau of Consumer Protection,
Federal Trade Commission, Washington, D.C...................... 5
Odette Williamson, Staff Attorney, National Consumer Law Center,
Boston, Massachusetts.......................................... 7
Kate Kleinert, Scan Survivor, Glenolden, Pennsylvania............ 8
Vee Daniel, President and CEO, Better Business Bureau Serving
Upstate South Carolina, Greenville, South Carolina............. 10
CLOSING STATEMENTS FOR THE RECORD
Closing Statement of Senator Robert P. Casey, Jr., Chairman...... 24
Closing Statement of Senator Tim Scott, Ranking Member........... 24
APPENDIX
Prepared Witness Statements
Lois Greisman, Associate Director, Bureau of Consumer Protection,
Federal Trade Commission, Washington, D.C...................... 31
Odette Williamson, Staff Attorney, National Consumer Law Center,
Boston, Massachusetts.......................................... 48
Kate Kleinert, Scan Survivor, Glenolden, Pennsylvania............ 60
Vee Daniel, President and CEO, Better Business Bureau Serving
Upstate South Carolina, Greenville, South Carolina............. 64
Questions and Responses for the Record
Lois Greisman, Associate Director, Bureau of Consumer Protection,
Federal Trade Commission, Washington, D.C...................... 69
Odette Williamson, Staff Attorney, National Consumer Law Center,
Boston, Massachusetts.......................................... 85
Kate Kleinert, Scan Survivor, Glenolden, Pennsylvania............ 91
Additional Statements for the Record
AARP Government Affairs, Bill Sweeney, Senior Vice President..... 95
AARP Government Affairs, Stop Senior Scams Act Letter of Support,
Bill Sweeney, Senior Vice President............................ 97
ASOP Global, John B. Hertig, Board President..................... 98
FRAUDS, SCAMS AND COVID-19:
HOW CON ARTISTS HAVE TARGETED OLDER
AMERICANS DURING THE PANDEMIC
----------
THURSDAY, SEPTEMBER 23, 2021
U.S. Senate,
Special Committee on Aging,
Washington, DC.
The Committee met, pursuant to notice, at 9:30 a.m., via
Webex, Hon. Robert P. Casey, Jr., Chairman of the Committee,
presiding.
Present: Senators Casey, Gillibrand, Blumenthal, Rosen,
Kelly, Warnock, Tim Scott, Collins, Braun, and Rick Scott.
OPENING STATEMENT OF SENATOR
ROBERT P. CASEY, JR., CHAIRMAN
Chairman Casey. Good morning, everyone. The Senate Special
Committee on Aging will come to order. Today, the Committee
convenes a hearing to learn about how COVID-19 left older
Americans more vulnerable to frauds and scams.
In the early days of the pandemic, many seniors isolated
themselves in an effort to avoid contracting the virus but in
the process were cutoff from family and friends. Fraudsters saw
an opportunity, and they pounced. They preyed on the fear and
the uncertainty surrounding the disease as well as the
loneliness and isolation that resulted from the pandemic.
People were longing for human contact, and a friendly voice on
the phone or a beckoning message on Facebook, that became
harder to turn away from, all of that. At the same time,
without regular contact with friends and family, it was easier
for small scams to balloon into big scams.
Still today, 18 months into the pandemic, Federal agencies,
State governments, and advocates warn of con artists who will
do all of the following: Number one, pedal fake cures for the
Coronavirus, Number two, charge outrageous prices for
protective equipment, and third, seek to steal stimulus checks
and unemployment benefits. These types of scenarios, which are
exacerbated by the pandemic, are not hypothetical.
Today, the Committee will hear testimony from Kate
Kleinert. Kate is a resident of Glenolden, Pennsylvania, in
Delaware County, southeastern Pennsylvania. Last year, Kate
survived a scam in which a con artist defrauded her of tens of
thousands of dollars.
I want to thank Kate for being with us today. I will
introduce her later, more formally. Also, I want to say to Kate
and to so many others who come here to Congress to testify
about something that has happened to them personally, that is
an act of courage and sharing her story will help others.
The Federal Trade Commission's data shows that Kate was not
alone in the experience that she endured. A theme we will hear
from Kate and our other witnesses today is the importance of
education in stopping frauds and scams before they start.
Stories like Kate's are why I reintroduced the bipartisan
Stop Senior Scams Act with Senator Moran, Senate Bill 337. I
want to thank Ranking Member Scott for cosponsoring the bill
and others who are working with us. This bill will create an
advisory committee to ensure that banks and other businesses
have the information and tools they need to train their
employees to spot, and to speak up about, possible senior
scams.
I was also pleased that the American Rescue Plan that was
passed by Democrats in March of this year included funding for
the Elder Justice Act to support programs to combat elder
abuse, enhance adult protective services, and more. This is one
of the many programs that serve as frontline defenses against
elder financial exploitation and abuse.
In addition, the Aging Committee's annual Fraud Book, here
is the book I am referring to. This is this year's edition.
This provides tips on how older Americans can avoid being
scammed. This Fraud Book also provides lists of consumer watch
dogs and law enforcement agencies that can help people who
believe they or someone they love may have been scammed.
Starting today, this 2021 Fraud Book--the Committee's 2021, I
should say, Fraud Book, will be available for download on the
Aging Committee's website, at www.Aging.Senate.gov.
In 2013, the Aging Committee started its toll-free Fraud
Hotline with the goal of making it easier for seniors to report
fraud and to seek assistance. Since that time, since 2013, the
Committee has received thousands of calls, and the hope is that
the hotline provides the caller with helpful advice, but it
also helps the Committee keep a pulse on the types of threats
that older Americans are facing. For people listening at home,
the Fraud Hotline toll-free number is 1-855-303-9470. I will
say that again, 1-855-303-9470.
This hotline would not be possible without the efforts of
frontline staff receiving these calls and providing advice,
which is hard and often heartbreaking work. To that end, I
would like to thank Jose and Jasmine on my staff for their
efforts to keep the Fraud Hotline up and running.
This the first time that Ranking Member Scott and I have
released the Fraud Book together, and I think I can say on his
behalf that we are proud to do that and proud to join those who
have worked on this on the Committee for many years.
One final point, today's hearing will include Senators
participating both virtually and in person, and I guess it is
the second time we have done that. We also have votes coming
up. We are hoping to get through at least opening statements by
witnesses after Ranking Member Scott's statement, and then we
will see where we are with voting and determine whether we
should take a brief recess so we can vote and then come back
and continue the hearing.
I want to thank our witnesses and others who made this
hearing possible, and with that, I will yield and turn to our
Ranking Member, Senator Tim Scott.
OPENING STATEMENT OF SENATOR
TIM SCOTT, RANKING MEMBER
Senator Tim Scott. Thank you, Mr. Chairman. Thank you for
holding such an important hearing. There is no doubt about it
that during a pandemic the last thing you want to hear about
are frauds and scams, especially fraudsters, scammers who focus
on our senior population in their golden years. It is just
disgusting and heartbreaking to hear so many stories from so
many seniors who have had to deal with the challenges of fraud.
I thank you for your bipartisan leadership. Often people
look around our country and wonder if anything works in
Washington in a bipartisan fashion. I would say that with your
leadership we are not working in a bipartisan fashion; we are
just working in an American fashion. We are putting the
priorities of Americans before anything else.
When it comes to our seniors, I think it is really
important for us to continue to focus on ways to make sure that
our seniors appreciate the fact that the leadership here are
servant leaders, focusing on how we make sure that the
fraudsters and the scammers that are taking advantage of too
many of our seniors, that stops and that there are ways for us
to deal with those challenges.
I do appreciate the fact that we have a Fraud Hotline that
I think everyone should hear once again. It is 855-303-9470. I
say that because so many times, and there are so many
situations and scenarios, where our seniors face scams. The
older you get, the more isolated sometimes too many of our
seniors become and the more they face the challenges of
scammers.
There are a couple of ones that I want to point out. One is
the romance scam. Just deplorable, frankly, from my
perspective. I know that so many people in their golden years
lose a loved one or become widows or widowers, and they are
faced with something called the romance scam. In 2020, romance
scams reached $304 million in losses, a 50 percent increase
from 2019. What is in common is the fact that in the middle of
the pandemic seniors were isolated and lonely and maybe more
susceptible to this type of fraud and this type of scam.
Congress can do its part to help, and I thank again
Chairman Casey for the bill, the Stop the Senior Scams Act. It
creates an advisory group to educate industry employees on how
to identify and prevent scams targeting our seniors.
Forced isolation because of COVID makes our seniors so much
more vulnerable. I think of one in particular in South
Carolina. The romance fraud claimed 250 victims, who suffered
losses in excess of $4 million in 2020. A lovely lady, Judy, 66
years old, in South Carolina, a widow, began a relationship
with a man over social media. He slowly gained her trust and
then swindled her out of her resources. Ten thousand dollars, a
senior on a fixed income lost to this scam.
Today, we are releasing, as the Chairman noted, the 2021
Fraud Book. This is such an important guide that could help our
seniors avoid such challenging situations.
In 2020, the FBI Internet Crime Complaint Center received
over 791,000 complaints; 28 percent of the victims were over
the age of 60. This resulted in approximately $1 billion in
losses to our seniors.
A constituent of mine from Columbia, South Carolina, shared
that she received a phone call from someone pretending to be
her grandson. She did what most grandmothers would do. She
called her grandson back and tried to verify that it was him.
This car accident that supposedly he was in, that required an
immediate wire of money, $5,012. She wired the criminal
scammers when she could not get in touch with her grandson.
Unfortunately, these types of fraud, are very common. In 2020,
the grandparent scam was the fifth most reported type to our
Committee's Fraud Hotline.
Education and greater awareness are the best ways to make
seniors informed consumers. That is why I am proud of what we
have in South Carolina called Project Hope, helping our
precious and elderly. Based in Richland County, South Carolina,
Project Hope partners retired law enforcement volunteers with
our seniors. They check in on a weekly basis, and they make
sure that they are very aware of the potential scammers out
there and making sure that they create a firewall between the
scammers and our seniors. I am so thankful that there are
dedicated men and women of our law enforcement community, the
men and women of blue, who retire and still have a passion for
people, find a new way to serve their communities in Richland,
South Carolina.
I am also thankful to the Chairman and for the National
Senior Fraud Awareness Day, which this year was May 13, 2021.
This day will continue to help raise awareness about the
increasing number of scams targeting our seniors.
Finally, let me just say to the former Chairwoman of this
Committee, Susan Collins, who has been a strong leader on this
issue of fraud and scams, I thank her for her leadership.
I look forward to hearing the testimonies from our
witnesses today. I want to thank each and every one of you for
participating in this critical and very important meeting.
I yield back, Mr. Chairman.
Chairman Casey. Thank you, Ranking Member Scott. I want to
acknowledge, as we will throughout the hearing, members as they
appear. For those seeing this on television or listening, we
have members of the Committee in the room, but the witnesses
are remote, and wanted to acknowledge first Senator Rosen who
has joined us virtually.
Let's move now to our witnesses. Our first witness is Ms.
Lois Greisman. Ms. Greisman is the Associate Director of the
Bureau of Consumer Protection at the Federal Trade Commission,
where she heads the Agency's Division of Marketing Practices.
Ms. Greisman has dedicated much of her professional career to
combating fraud and working within the Federal Trade Commission
to hold these scammers accountable. Today, Ms. Greisman leads
the Commission's law enforcement initiatives tackling frauds
and scams. She also serves the Commission's Elder Justice
Coordinator.
Our second witness is Ms. Odette Williamson. Ms.
Williamson's career has been dedicated to protecting consumers
and combating elder abuse. She currently works as a staff
attorney at the National Consumer Law Center in Boston,
Massachusetts, where she works on issues of consumer justice
and economic security. Previously, Ms. Williamson served as the
Assistant Attorney General in the Massachusetts Office of the
Attorney General of the State, where she enforced consumer
protection laws and served on the Elder Law Advocates Strike
Force.
Next, I will turn to Ranking Member Scott to introduce our
next witness, Mrs. Vee Daniel.
Senator Tim Scott. Thank you, Mr. Chairman.
It is my pleasure to introduce Mrs. Vee Daniel from
Spartanburg, South Carolina. Mrs. Daniel has been President and
CEO of the Better Business Bureau serving the upper State of
South Carolina since 2011. The Better Business Bureau is a
nonprofit serving 10 counties in the upper part of the State.
They work with the public, including military service members
and seniors, to help consumers find businesses they can trust.
They also investigate and call out substandard marketplace
behavior.
During the COVID-19 pandemic, their senior hotline received
calls asking about various COVID-related products and claims.
The Better Business Bureau was able to inform callers of the
scams.
During Mrs. Daniel's tenure, the BBB also created and
implemented programs to help seniors better protect themselves
against frauds and scams. I look forward to hearing about this
program and the great work the Better Business Bureau does to
support seniors.
Mrs. Daniel, we thank you for your passion, your
commitment, and your service to seniors. Thank you for taking
the time to talk with us today, and I look forward to hearing
your whole testimony.
Thank you, Mr. Chairman.
Chairman Casey. Thank you, Ranking Member Scott.
Finally, I am pleased to introduce Ms. Kate Kleinert,
Kate, who is a resident of Glenolden, Pennsylvania. That
is, as I mentioned, Delaware County, in the southeastern corner
of our State. Kate retired from her career as an executive
secretary for various businesses to take care of her late
husband, Bernie, and currently manages public relations for a
local author. Over the pandemic, Kate became a survivor of a
scam and is now sharing her story to help others understand the
emotional and financial toll the scams can take.
Let us now move to the witness statements. We will begin
with Ms. Greisman.
Ms. Greisman, you may begin.
STATEMENT OF LOIS GREISMAN, ASSOCIATE DIRECTOR,
BUREAU OF CONSUMER PROTECTION,
FEDERAL TRADE COMMISSION, WASHINGTON, D.C.
Ms. Greisman. I am Lois Greisman. I appreciate the
opportunity to discuss the FTC's initiatives to protect older
adults. As always, my oral remarks and responses to any
question reflect my own views and do not necessarily reflect
those of the Commission or any individual commissioner.
Protecting older adults is a core element of the FTC's
work. We know older adults are targeted and adversely affected
by a wide range of scams. As many have mentioned, the pandemic
has exacerbated that deceptive and unfair marketing and has had
a particularly devastating impact on the health and finances of
older communities. I want to touch on three areas: data trends,
law enforcement, and education.
Starting with data trends, in 2020, the FTC's Consumer
Sentinel Network logged nearly 5 million reports from
consumers. Older adult reporting trends are based upon reports
about fraud from consumers who voluntarily identify themselves
as over age 60.
Three observations: First, as a general matter, younger
adults, age 20 to 59, are more likely to report losing money to
fraud than older adults, but quite disturbing is that older
adults reported much higher individual median losses than did
younger adults, and in fact, people age 80 and above reported
the largest median losses.
Second, we observed that older adults are more likely than
younger adults to lose money to certain types of scams, mainly
technical support scams, prize and sweepstakes scams, and
family and friend impersonation scams. That last category
includes the grandparent scam.
Third, the data indicate what types of scams are causing
the greatest dollar loss to older adults. One has already been
mentioned by you, romance scams, followed by prize/sweepstakes
scams and followed by business impersonator scams. The economic
harm is enormous, more than $600 million reported by older
adults in 2020, and we know this is just the tip of the
iceberg. Notably, reported losses to romance scams have
increased significantly in the years, and this trend has only
accelerated during the pandemic.
Shifting now to law enforcement, looking at the past year,
we have filed at least 13 cases that have a notable impact on
older adults. These range from investment scams to products to
treat or prevent COVID-19, to products to treat or prevent
cognitive decline.
When we file a case, we have two immediate goals: stop the
ongoing harm and preserve assets so that we can return money to
defrauded consumers. Over the years, the FTC has successfully
returned billions of dollars to consumers. For this year, we
have returned money to consumers or conducted the claims
process in at least 11 cases where we have seen older adults
impacted.
A recent Supreme Court decision, however, AMG, eliminated
the FTC's ability to obtain monetary relief for defrauded
consumers. Under Section 13(b) of the FTC Act. I cannot
underscore enough how vital this tool, Section 13(b), has been
to put money back into people's pockets. The economic impact of
the pandemic has been devastating, particularly so on older
adults who may be on fixed incomes. As a law enforcement
agency, we are committed to providing redress to defrauded
consumers, but to do so effectively and efficiently we need a
fixed 13(b).
Finally, the FTC devotes considerable resources engaging in
outreach and education for older adults. Since 2014, Pass It On
has been the FTC's signature fraud prevention education
campaign for older adults. It is a robust compendium of
resources to enable people to understand scams and to literally
pass on information about them to friends and family. In
addition, the FTC has continued to reach communities during the
pandemic, conducting nearly 100 pandemic-related outreach
events with partners in Fiscal Year 2021.
To sum up, I hope it is clear that protecting older adults
is a priority for the FTC. The devastating impact of the
pandemic on older adults has only emboldened its work. Finally,
restoring the FTC's ability to obtain monetary relief under
13(b) is critical to enable the Agency to continue to provide
redress to all those harmed by unfair and deceptive acts and
practices.
Thank you very much, and I look forward to your questions.
Chairman Casey. Thank you, Ms. Greisman, for your
statement.
We will now turn to Ms. Williamson. You may begin.
STATEMENT OF ODETTE WILLIAMSON, STAFF ATTORNEY,
NATIONAL CONSUMER LAW CENTER,
BOSTON, MASSACHUSETTS
Ms. Williamson. Mr. Chairman, Ranking Member Scott, and
members of the Special Committee on Aging, thank you for
inviting me to testify today regarding frauds and scams aimed
at older adults during the COVID-19 pandemic. I offer my
testimony on behalf of low-income clients of the National
Consumer Law Center.
The National Consumer Law Center uses its expertise on
consumer law and energy policy to work for consumer justice and
economic security for low-income people. At NCLC, I focus on
issues impacting older consumers, provide training through the
National Center on Law and Elder Rights, and direct our racial
justice initiative.
All consumers are vulnerable to frauds and scams, but
widespread illness and death, combined with the social
isolation brought on by the pandemic, created fertile ground
for the proliferation of scams aimed at older adults. This
includes bogus treatment and cures for COVID-19, romance scams,
government imposter scams, and fake charities. The list is
endless. Scammers are constantly developing new and creative
ways to steal money from consumers.
Scammers target older adults, whom they suspect are lonely,
isolated, confused, or financially distressed. Low--income
older adults, including those facing eviction, unemployment,
and economic uncertainty, are especially at risk as they search
for government programs or financial assistance.
Older adults in communities that are racially, ethnically,
or linguistically isolated face a special challenge. An FTC
fraud survey, for example, found that Latinos experience higher
rates of fraud than other populations. Scammers purchase ads on
Spanish language radio and exploit misinformation and confusion
regarding COVID-19 treatments, vaccines, and the availability
of financial assistance. Given the disproportionate impact of
the pandemic on communities of color, we expect to see further
uptick in frauds and scams aimed at these communities.
The impact of frauds and scams on older adults is simply
devastating. Depending on the amount of money or assets taken,
older adults can fall into poverty or homelessness. Scams also
impact the emotional and physical health of victims as they
struggle to live on fewer resources for food, medicine, and
other basic necessities. The financial strain and embarrassment
may cause older victims to become fearful, depressed, and even
suicidal.
The options to recover the money or assets stolen are few.
Many scams are not discovered early, and consumers' attempts to
stop or reverse payment is often too late or not possible.
Scammers are known for the speed with which they redeem gift
cards and pick up money wired to them, and consumers are rarely
able to retrieve funds sent through these mechanisms.
More protections are needed to give consumers a fighting
chance to recover money transferred to scammers. New payment
systems, such as the peer-to-peer, or P2P, payment platforms--
Venmo, Cash App, and others--are being used to facilitate
scams. The warnings provided by the payment apps are simply not
enough to protect consumers. Rather, Congress should modernize
the Federal law, the Electronic Funds Transfer Act, to add
protections for fraudulently induced payments and consumer
errors.
Finally, the Federal Reserve Board is in the middle of
developing a new P2P payment system called FedNow. However,
recently proposed rules for the FedNow program duplicate the
problems of existing P2P payment systems by failing to provide
consumers with protections against fraud and consumer errors.
Financial institutions and payment providers have a
responsibility to prevent accounts from being used for scams
and other illegal purposes. The Fed must make FedNow a model
for other payment systems and must not value speed and
convenience at the expense of safety.
Older consumers who have suffered the devastating health
and economic consequences of the COVID-19 pandemic deserve the
highest level of protection from frauds and scams.
I thank you for the opportunity to testify today and look
forward to your questions.
Chairman Casey. Thank you, Ms. Williamson, for your opening
statement.
Mrs. Daniel, you may begin.
I know we had some connection issues.
Senator Tim Scott. Yes. I think she may still be suffering
through the technology issues there.
Chairman Casey. Maybe we will move to our next witness, and
we can come back to Mrs. Daniel. We will move now to Kate
Kleinert.
STATEMENT OF KATE KLEINERT, SCAM SURVIVOR, GLENOLDEN,
PENNSYLVANIA
Ms. Kleinert. Good morning, Chairman Casey, Ranking Member
Scott, and members of the Aging Committee. My name is Kate
Kleinert, and I am scam survivor. I am from Glenolden,
Pennsylvania, and I have been widowed for 12 years. My husband,
Bernie, passed away in 2009. Since then, I have never looked
for any new romance in my life because I still felt married to
my husband. I was not interested in finding another love.
Last summer, in August 2020, I received a friend request on
Facebook that caught my eye. It was, unfortunately, the one in
a million that I decided to accept and become friends with. His
name is Tony. Well, that is what he told me. We exchanged
messages for a number of days, and he told me that he was
interested in the same things that he saw on my Facebook page,
like dogs and gardening. I thought that was wonderful.
We started talking on the phone through an app he had me
download. He told me he was a surgeon working in Iraq through a
contract with the United Nations and that he has two children,
a little boy and a girl.
Tony became romantic much more quickly than I did, and I
kept trying to put him off, saying we did not know each other.
Tony had the kids get in touch with me through e-mail, and they
started calling me ``mom,'' which is my Achilles heel because I
did not have children of my own. That put me head over heels.
The first request for money came from the girl who needed
some feminine supplies but was embarrassed to ask her father. I
sent her a gift card. I would go to any store, buy a gift card,
take a picture of the front, the back, and the receipt, and
send her that information through e-mail, and she could use it
to make purchases. From then, there was always some kind of an
emergency or some urgent need for money.
Things became more serious between Tony and I. He wanted to
get married. He even asked if I would go out and start looking
at houses. I was constantly sending him gift cards even though
now I was using up the last of my husband's life insurance. My
savings were gone. I was living on my credit cards, and he was
getting what I took from Social Security and my pension. In all
this time, only one person, an employee at a drugstore, ever
asked me if I knew who I was sending these gift cards to. I
kept doing this because he swore to me he would repay me the
minute he got back to the States and even sent me his passwords
to his account at Bank of America so I could see his balance,
which was a little over $2 million.
When he was finally allowed vacation, Tony was going to fly
to Philadelphia on December 10th, and I was going to pick him
up at the airport. I was so excited. I got all dressed up. My
hair was done. My nails were done. I waited all night long. He
never called. Even at this point, I never considered that it
was a scam. I was just worried about him.
Then the next morning I got a call from a man who said he
was Tony's lawyer and said that in Iraq someone had slipped
drugs into Tony's bag and he knew nothing about it but was
arrested at the airport and now needed money for bail. He asked
me for $20,000. The lawyer told me to do whatever I could, take
out a second mortgage on my home, borrow it from my family, do
whatever I could, but I was not able to do that.
I became suspicious when I asked to meet Tony in person,
but the lawyer said that he had been transferred to Oklahoma. I
became even more suspicious when Tony started calling me
himself five or six times a day from prison, asking for more
gift cards to buy better food. Something was not right.
By now, I had sent him a total of $39,000, which to some
people is not much, but to someone in my position it is a great
deal. I am still paying for that today because I cannot get
things repaired at the house. I have had no air conditioning
this summer. My refrigerator is off, and my stove is off. I
have been leaning on my sisters and a few friends to get me
through this. The loss that hurts the most was losing his love
and losing the family I thought I was going to have and what my
new future was going to be. That is much harder to deal with
than losing the money.
I have since come to find out that all those pictures he
sent me of himself were actually a doctor in Spain. I tried to
report this to the police but could not get anyone to listen to
me. I also called AARP's fraud number that was in their
magazine and got a retired detective who was supportive and
encouraged me to share my story. I have been frustrated at the
lack of options to recover the money that I have lost or the
ability to hold him responsible for these damages.
Even though this experience is painful to speak about, I
want to be an ambassador for this cause because it is so
devastating and many people have been through this but not
spoken about it. They continue to carry this heavy burden
alone. In my case, I got pulled in because I had forgotten how
good it felt to be loved. Thank you.
Chairman Casey. Kate, thank you for sharing your personal
story. It was a moving story when I read it but ever more so
when we hear it from you. We are just grateful you are here
with us.
I think we are going to try Mrs. Daniel again to see if she
is connected.
Ms. Daniel. Yes. Sorry about that.
Chairman Casey. Great.
STATEMENT OF VEE DANIEL, PRESIDENT AND CEO, BETTER
BUSINESS BUREAU SERVING UPSTATE SOUTH CAROLINA,
GREENVILLE, SOUTH CAROLINA
Ms. Daniel. Chairman Casey, Ranking Member Tim Scott, and
distinguished members of the Committee, thank you for the
opportunity to testify today on a topic of ``Fraud, Scams, and
COVID-19: How Con Artists Have Targeted Older Americans During
the Pandemic.''
My name is Vee Daniel. I am a college communications major
graduate, mother of an early childhood teacher, an intern
architect, and a new grandmother. I will be celebrating my 30th
wedding anniversary this year.
I serve as President and CEO of the Better Business Bureau
of the Upstate and the Better Business Bureau Education
Foundation, a position I have held since 2011. BBB is a
nonprofit promoting trust between consumers and businesses and
the marketplace and has been around for more than 100 years.
When I was first offered the position, I was intrigued. I
grew up with a father who was a huge advocate for the BBB. When
his friends needed assistance with customer service issues, my
dad would always say, call the BBB.
After a few weeks on the job, I received an invitation to
speak to a senior group about the latest scams. I will never
forget that day I spoke to those seniors and listened to their
scam stories. It was heartbreaking. I learned to speak louder,
ask questions, listen, and the most important part was
realizing education is the key to fighting senior fraud. That
is when I knew this role with the BBB was the perfect fit for
me. Since that day, I never turn down an opportunity to speak
to educate seniors. In 2015, we dubbed the program ``Savvy
Seniors'' because that is what we wanted to achieve.
During the pandemic, we witnessed new scams that involved
masks, non-FDA-approved medical supplies, immunity--boosting
products, and equipment through online purchases related to
COVID-19. We have also seen fake websites, phishing e-mails
that involve stimulus checks, price gouging, scammers
impersonating government agencies like Medicare, and promoting
fake vaccines. We have also seen an increase in romance scams
during COVID-19.
BBBs across the country rallied together to put out fraud
prevention messages, and we did thousands of media interviews
to try to warn consumers about all COVID-related scams we were
seeing. Senior groups were not able to meet during COVID-19, so
we partnered with our local Appalachian Council of Governments
Greenville office and Meals and Wheels to provide 1,000 BBB
Savvy Senior packets that included education information on
fraud and scams.
As part of a larger national effort, the BBB of the Upstate
has hosted Secure Your ID Day since 2009. Local BBBs from all
across the United States and Canada join in on the event
designed to protect consumers from the growing threat of
identity theft and provide education. Consumers and businesses
are encouraged to attend the free community service event and
properly shred and destroy sensitive documents. In 2018, BBB
Upstate partnered with AARP-South Carolina, and from that
partnership we have increased our shred events from 4 to now 8
events a year. Last week, we held two events, one in Greenville
and one in Anderson, with two happening in October in
Spartanburg and Simpsonville in our area. About 90 percent of
attendees are seniors.
BBB Scam Tracker is an online platform that enables
consumers and businesses to report scams and suspicious
activities. The data is analyzed, and reports are made
available to the general public, thus empowering consumers to
avoid losing money to scammers. The website features a
searchable heat map, so users can view the number, types, and
details about scammers, scams reported in their communities.
BBB Scam Tracker data enables local BBBs to educate consumers
and stop fraudsters by leveraging the power of technology and
our network of BBBs serving communities through North America
and Canada.
Using data from the BBB Scam Tracker, our foundation, the
BBB Institute for Marketplace Trust, released a report on the
rise of online scams during the COVID-19. The BBB Risk Index is
a formula that looks at scams in a different way: the volume of
each type of scam reported to BBB Scam Tracker; the
susceptibility rate, that is, how people who exposed to the
scam actually lose money; and the dollar loss. That formula
shows us which scams are the riskiest, and it may not be for
the scam with the most reports. For instance, romance scams
were the riskiest for ages 55 through 64, followed by online
purchases and investment scams. Travel, vacation, timeshare
scams were the riskiest for ages 65-plus, followed by online
purchases and romance scams.
Since BBB began tracking scams in this way in 2016, we have
seen a clear pattern. Although seniors are pretty savvy and
tend to fall for scams less frequently than the younger
demographic groups, they lose more money. This is partly
because the type of scams that target seniors--romance scams,
investment scams, family emergency scams--tend to be the higher
dollar amounts.
Although many seniors have gotten the message and are more
cautious than in the past, too many are still falling victim to
unscrupulous criminals. BBB is proud of the role we play in
educating seniors and all the consumers, but there is much more
that can be done, and we appreciate the attention this issue is
getting.
Thank you for the opportunity to be a witness today on a
relevant topic of how con artists have targeted older Americans
during the pandemic.
Chairman Casey. Mrs. Daniel, thanks so much for your
testimony.
I want to acknowledge two members of the Committee who are
here, or one who has been here and will be back, I guess.
Senator Collins is here with us.
Ranking Member Scott made reference, Senator Collins, to
the years when you were Chairman and producing the fraud and
scams book that the Committee has been using for so many years.
We thank you for being here.
Senator Braun was with us earlier, and I want to
acknowledge Senator Braun's attendance at the hearing, and
maybe he will be back here.
So we will take a brief recess now to vote, at least so
that Ranking Member Scott and I can vote, and then we will come
back and resume the hearing.
[Recess.]
Chairman Casey. Okay. The hearing will resume, and I wanted
to start by acknowledging that Senator Gillibrand and Senator
Warnock, have joined us via Webex. I will start with my
questions and then turn to Ranking Member Scott.
I want to start with Kate Kleinert. Kate, as I mentioned,
your story is so powerful, and unfortunately, for America it is
not unique. I think every member of the Committee was moved by
what you said. As I said, your written testimony was powerful
enough, but hearing it directly from you had a big impact on me
and I know other members. We are grateful you are here, and we
are grateful that your story can help other seniors when there
are scammers out there and perpetrators of fraud trying to rip
people off.
I wanted to focus on one part of your story and the story
of many others, Kate. You said that, or you know, I should say,
that social isolation is not something new for seniors, but for
many people the pandemic made this terrible isolation that much
worse. Do you believe the pandemic left you more susceptible to
being scammed?
Ms. Kleinert. I really do. When I think back to the
beginning of the pandemic, when we were first locked down and
it was so strange to be home without any physical contact with
other folks, not seeing your family, it was very hard and
upsetting to be by yourself. I think when this man was kind to
me on the Facebook that I did react to it more than I would
have at any other time.
Chairman Casey. Yes, I think that is understandable. I
thought it was noteworthy among many things you said that as
much as you lost a significant dollar amount, some $39,000--I
was just recounting that to some reporters in the hallway as we
went out to vote. I was struck as well by what you said on page
three of your testimony, where you said ``The loss that hurts
the most was losing his love and losing the family I thought I
was going to have and what my new future was going to be.''
That tells us so much about how devastating these scams can be.
So, Kate, we are grateful for your testimony, and I may be
able to come back to you later with some other questions.
This question I will direct to Ms. Williamson and Mrs.
Daniel together, and it does not matter who answers first.
As we just made reference to Kate's testimony, she shared
that only one person, an employee at a retail store, warned her
that she might be a victim or might be a target of a scam.
Businesses and financial institutions are, of course, uniquely
situated to respond to these attempts to rip people off, but
often the employees of those institutions are not trained to
detect fraud or to speak in a sensitive and effective manner to
the consumer, to give them a heads-up based upon their
experience and their training.
As I mentioned, our bill, the bipartisan Stop Senior Scams
Act, would fill in these gaps in both knowledge and training so
that we have more instances so it is not just in Kate's case,
one person, but more than one person giving people a heads-up.
So in your view--and I guess maybe I will start with Mrs.
Daniel just to go in order. In your view, would this
legislation help reduce the risk . . . the risk of older
Americans being defrauded?
Ms. Daniel. Yes, I would think that it would. You know,
any--you know, there is lots of reports out there about, you
know, with education and everything. I mean, I think it is very
important that with the education and with the risk that we are
talking about--you know, I think it would definitely help. You
know, I think that during COVID-19, you know, it was more
risky, and it still is because COVID is still going on. I would
say, definitely, I think it is.
Chairman Casey. Ms. Williamson?
Ms. Williamson. I would also support the legislation. I
think we need more tools to prevent, to fight these scams up
front. Simply, the retail employees are first line of defense.
They are in these stores day in and day out. They know their
customers. If they have more training and more information on
these scams, they can simply warn the victims not to complete
this transaction.
It is simply better to not have the elder transfer away
that money than to try to get that money back on the back end.
There are just fewer options to retrieve that money once it is
transferred away.
Chairman Casey. Well, thank you very much. Just as you were
answering the question, I am reminded of a story from years ago
in this Committee where we heard the story about someone who
was a target of a scam, and it was not until he was in the
parking lot of the bank where he was about to transfer money
that he got someone to interrupt and say you have got to think
about this before you go into the bank. The more people that
can provide that warning, the better.
I will turn next to Ranking Member Scott.
Senator Tim Scott. Mr. Chairman, I will defer my opening
questions to my brother from another mother, Senator Scott from
Florida.
Senator Rick Scott. Thank you, Senator Scott.
[Inaudible.]
Chairman Casey. I think we need a microphone.
Senator Rick Scott. You worry about them every day, whether
somebody is going to try to take advantage of them. When you
hear the story of somebody that acts romantically interested
and takes somebody's life savings, it devastates you because it
is very difficult for law enforcement to find these people and
to track them down and to be able to prosecute them, and it is
so large. Your heart goes out to people that this happens to.
My first question is for Ms. Greisman. First, I want to
thank you for your hard work to protect our seniors and
everything you do to bring justice to the criminals who take
advantage of our older Americans. Are there any additional
resources or authorities you and your team need to carry out
your mission?
Ms. Greisman. Senator Scott, I appreciate the question. The
main tool we need back is our ability to obtain, effectively
and efficiently obtain, monetary relief under Section 13(b) of
the Federal Trade Commission Act. A remedy to fix that is what
truly needed so that we can put money back in people's pockets,
money back to people who are defrauded.
Senator Rick Scott. We have put out information out of our
office to give to seniors to try to get them to do it.
Ms. Kleinert, first off, I just want to tell you that it is
disgusting that this happened. It is disgusting that this
individual took your money and also disgusting that he gave you
hope when he should not have. Criminals are just like this,
they are despicable.
What advice do you give others to make sure this does not,
you know, happen to them? Is there anything when you look back
that you can say, gosh, I should have--there was a red flag I
did not see, that maybe somebody else will say they see your
testimony and they will not make--the same thing will not
happen to them?
Ms. Kleinert. I have really been astonished at the amount
of information that has been said today, the things that are
out there, programs that are out there, and I knew nothing
about them. I think there is a gap between what is being done
and the senior citizens, and we need to close that somehow.
I am not so sure the education of the retail personnel is
the way to go. If I am in the line at a drugstore, buying a
gift card, and there is a 19-year-old kid behind the cash
register with a Santa hat on, I do not think I am going to
listen to him about the dangers of buying that gift card.
I think there needs to be some kind of a pamphlet, a
brochure that has statistics, warning signs, and where to go,
not sitting at the cash register to take one if you want one,
not being handed to you by the cashier if he says, ``Would you
like to have this,'' but to be automatically put in the bag
when you are purchasing a gift card. Just put it in the bag.
People will go home. A lot of them will throw it away, but many
more, when they are by themselves, will sit and read this and
take it to heart.
There has to be more education out there, and it has to be
more visible to the senior citizens. Get commercials on the
television. Show scenarios of scams and how they come about.
Tell people that you are not dumb for falling for it, that
these people are so sophisticated and so good what they do that
you are not being stupid or making bad decisions by being taken
in by these people. They are smarter than you are.
Senator Rick Scott. Have you gotten much media attention?
Has the media been interested in your story?
Ms. Kleinert. I have been interviewed for a newspaper
article earlier in the spring, and AARP asked me to do a
podcast. I have done two podcasts, but that has been it.
Senator Rick Scott. Okay. Mrs. Vee Daniel, I want to thank
you for the work you have done. Do you think that local
businesses have the resources they need to educate their staff
on potential fraudulent activity, and is there anything else
that you think that we ought to be doing to help our small
businesses to do a better job to stop this?
Ms. Daniel. I think--well, thank you, Senator Scott.
Great question. I think there is definitely more education
that could be done. As I mentioned, most of our Savvy Seniors
are groups, and we do small business webinars actually to our
accredited businesses and non-accredited businesses. I think
there is definitely more education that we can do with small
businesses to, you know, alert them, the small business owners
and their staffs, of the, you know, prevention tips and what to
look out for.
So I definitely--you know, in our area, we cover 10
counties. We are a staff of nine, and you know, we try to do
the best that we can. I think definitely with more
collaboration just like we did with AARP this past year, and
more collaboration with government agencies, to be able to
provide more education.
Senator Rick Scott. Thank you.
Thank you, Chairman.
Chairman Casey. Senator Scott, thanks very much.
I will next turn to Ranking Member Scott.
Senator Tim Scott. Thank you, Mr. Chairman.
I will direct my first question to Mrs. Daniel. Mrs.
Daniel, under your leadership, the Better Business Bureau is
really making a difference in the lives of our fellow South
Carolinians. The Savvy Senior program provides tips on how to
spot the latest scams. Have you heard from golden Americans who
utilized the lessons they learn from the program and applied it
to their lives?
Ms. Daniel. Yes. That is the rewarding part. I mean, the
rewarding part is, you know, when you hear someone that says
that, you know, our prevention tips or red flags helped them
stop from becoming the next victim. It is very rewarding.
I can tell a little bit of a story we had, a short story. I
had an executive. He was a retired executive of a very large
business here in the Greenville area that came into the office,
and he wanted to talk because he had a new employment job that
he was starting to feel a little--you know, he was not sure
whether it was a scam or not. He came in and talked to us, and
you know, he said that basically what he was doing was he had
someone contact him about a job opportunity which was offering
a lot of money. What he started doing was packaging up items
that were shipped to him by his employer and then he would
reship them to someone else. As soon as he said that--because
we have seen that before. It is called employment scam. We just
immediately told him, you need to stop. What you are doing is
wrong. It is--you know, you should not be making that much
money. Then he says, well, I have not even been paid. He had
been doing it for a while. Then I said, you need to stop. He
agreed. He agreed. About a couple weeks later, we heard back
from him, and he told me that he got a call from the Mall of
America, an investigator from Mall of America, and that what he
was doing was wrong because what he was shipping was actually
bought from stolen credit cards.
Senator Tim Scott. Wow. Wow.
Ms. Daniel. He called me, and he asked me if I would reach
out to the guy from Mall of America, the investigator, and so I
did. I let him know the guy was very up and up. He is a very up
and up leader. He was a leader in our community, and you know,
he just got intertwined with something that he thought was
right, was wrong.
There was no charges or anything, and actually they worked
with him later on. We do not really know all the specifics
there. You know, without him coming into the office and talking
to us, my worry is he could have been indicted or he could be
in jail.
Senator Tim Scott. I guess.
Ms. Daniel. You know, that is just one example, but thank
you.
Senator Tim Scott. That is a very good example. Thank God
for your hard work and your dedication on such an important
issue.
Let me ask you one other question before I turn to Ms.
Greisman. Given your background and extensive experience with
the Better Business Bureau, can you help us understand how to
help our seniors who live in rural America? Sometimes they do
not get the same level of information and they are not perhaps
as connected to broadband. They may not have broadband
connections. They may not have the same access to information
as folks who live in more suburban areas. Is there a way that
the Savvy Senior program helps to encourage and inform our
rural golden Americans?
Ms. Daniel. Yes, the Savvy Senior program does. It is just
short, very short. Basically, the program over the years has
presented to senior groups in all parts of our 10 counties that
we cover, even rural areas. What I say is, whether we drive 10
miles or 100, we never say no to presenting education to
seniors about scams and fraud.
Senator Tim Scott. Excellent. Thank you very much.
Ms. Greisman, thank you for your work and certainly your
expertise. I am certainly proud to co-sponsor with Chairman
Casey Senate Bill 337, the Stop Senior Scams Act, which creates
an advisory group with industry stakeholders, and leading and
regulatory bodies, to identify opportunities for consumers,
companies, policymakers, and law enforcement to protect our
aging community.
In light of your work with the Commission, could you please
speak to how this new advisory group can serve to optimize the
Commission's current practices without duplicating work that
has already been done at the Federal level?
Ms. Greisman. Thank you, Senator Scott. Look, we are keen
to work with you and your staff on any type of legislation that
will enhance and improve our ability to serve older adults and
to do so more efficiently. We look forward to working with you
on that.
Senator Tim Scott. Thank you, ma'am.
Mr. Chairman.
Chairman Casey. Ranking Member Scott, thanks very much.
We are awaiting some other Senators. I wanted to continue
the question period with one that I had, and I will pick up
where the Ranking Member left off with regard to the witness,
in this case, Ms. Greisman.
We have heard Kate's story earlier that I made reference
to, and you heard Kate Kleinert's testimony. In particular, of
course, what she has identified is a particular kind of scam, a
romance scam. We know that she is not alone. Unfortunately,
this is one of the areas where there is an awful lot of
increase or growth in that kind of a scam. In fact, the Federal
Trade Commission reported a significant increase in reports of
these scams between 2019 and 2020 as Americans became more
isolated.
I just looked in your testimony, Ms. Greisman. I am looking
at page four. It says, ``For older adults, reported losses to
romance scams increased from near $84 million to about $139
million in 2020.'' So, 84 to 139. There are millions of
dollars. Every time it moves up the scale, millions of dollars.
Then it goes on to say, or your testimony, I should say, goes
on to say, ``Among older adults, hardest hit were the 60-69 and
70-79 age groups.'' Basically everybody over 60, between
basically 60 and 80, ``which reported $129 million of the 2020
losses,'' meaning $129 of the $139 million in losses were
reported by that age group, ``making romance scams the category
of highest reported losses for both groups.'' Obviously, a lot
of money and a big cohort of Americans being affected by this.
Ms. Greisman, here is my question. Based on this uptick in
romance scams and all the dollars lost because of it during the
pandemic, what work is the Commission doing to both educate
consumers and to prevent, or help consumers prevent, themselves
from being preyed upon by these so--called romance scammers?
Ms. Greisman. Thank you, Chairman. First of all, let me say
that Ms. Kleinert is indeed a compelling Ambassador, and her
testimony is courageous, and it highlights how sophisticated
romance scammers are and how they work hard to build trust and
cause enormous harm.
One of the main payment systems that romance scammers use
are money transfers, and the FTC in recent years has sued both
major--each of the major money transfer networks, MoneyGram and
Western Union. MoneyGram recently failed to live up to the
requirements of a prior order and crack down on fraudulent
transfers across its network, and Western Union facilitated
fraudulent--allegedly, facilitated fraudulent transfers on its
system. I think that type of law enforcement work goes a long
way toward minimizing the harm that is caused by wire transfers
in connection with romance scams.
On the education front, Pass It On, again, is our signature
education campaign. What we have seen, and I think what Ms.
Kleinert's testimony underscores, is how important it is that
people have the knowledge of scams, and that is a primary goal
of the FTC: to educate; push out information; to do it at
local, State, and Federal levels; work with our partners like
the Better Business Bureaus, consumer groups, AARP. Getting
information out there so that people are aware of the type of
scam, we know from research, makes it less likely they will
fall prey to that scam.
Chairman Casey. Well, thanks very much.
I am going to concede the rest of my time and turn to
Senator Gillibrand, who is, I think, connected for her
questions.
Senator Gillibrand. Yes. Thank you, Mr. Chairman.
Thank you, Ms. Greisman, for your testimony and the answer
to the Chairman's last question. I just have a follow-up
question. How can the FTC do more to get information out to
seniors in all of their communities so they can recognize this
fraud more?
I have been to assisted living facilities across New York,
and I have heard story after story. Stealing life savings. The
grandchild scam. You know, all the different kinds of ways. The
IRS scam. It does not end.
We know that a lot of these artists are--scam artists are
criminals, criminal networks. I know we arrested a criminal
network from India, one from Russia. The FBI works to subvert
these kinds of frauds.
I feel that the FTC needs to work in perhaps a different
way to make financial institutions more aware, to make sure
seniors are more aware, to make sure places where seniors go,
assisted living facilities are more aware. What can you do to
help solve this problem?
Ms. Greisman. Senator, maximizing our outreach, maximizing
our ability to reach in the communities is just a top priority,
and it is a challenge. It is especially more so--it is a
special challenge in a pandemic. I assure you our outreach
efforts are constantly being rethought, re--evaluated. It is
our goal to reach into the communities at the grassroots
levels, through local organizations like the public libraries,
through legal services. We have a tremendous network of
contacts, and we are constantly tapping them both to push out
information, so that they have access to the resources we have
and can use in their communities, and also to receive
information from them to inform our law enforcement work and
our education and outreach.
Senator Gillibrand. Is your outreach including sort of this
urgency, that if they are a scam that they are going to report
these scams? Obviously, if we do not give the FBI the
information and law enforcement the information to go after
them, they will have less data and information to be
successful.
Ms. Greisman. A core piece of information that is
indispensable to all of our outreach is to report what they are
hearing. Go to www.reportfraud.ftc.gov. It is absolutely,
incredibly important that we receive that information so that
we know what is going on and we can be proactive in our
enforcement.
Senator Gillibrand. Are you asking the institutions to do
the reporting? I can promise you no senior that has been
scammed is going to want to go to a website and report the
scam. If they are not willing to go to the police in the first
place, they are not going to go to a website. Are you asking
the assisted living facilities and the financial institutions
to do the reporting?
Ms. Greisman. We do receive data from certain contributors
in the private sector such as MoneyGram, Western Union, Better
Business Bureaus. I am not aware that any financial
institutions report directly to us, but that is certainly
something that we will give thought to. Appreciate it.
Senator Gillibrand. Ms. Kleinert, thank you so much for
sharing your story. I know it is a horrible, horrible thing.
You are very courageous, and you can prevent what happened to
you from happening to other people. Can you tell us what you
wish was available for you or how would you have been able to
be warned more effectively? What would have worked for you, and
what type of interventions or resources would be helpful for
you and your friends?
Ms. Kleinert. I think we need to get more of this
information out to the people. I had no idea where to go. I
tried reporting my problem to the police but could not get them
to listen to me. That was very discouraging, and I was giving
up at that point.
I did call the AARP fraud line and got a very nice man.
That is important, too, to have someone who is compassionate
and not speaking down to you, not talking to you like you are
senile and cannot make good decisions because that is not true.
That is--you already feel that way anyway by yourself. You do
not need someone else reinforcing that.
Senator Gillibrand. To be honest, Ms. Kleinert, these are
highly sophisticated criminals. This criminal enterprise of
senior fraud is worth hundreds of billions of dollars every
year. It is not a small thing. You guys are their primary
targets because seniors together have over a trillion dollars
of assets, you are a ripe, very rich target for these criminal
networks.
I guess what you are saying is you would like law
enforcement to be better informed so they could have put you in
touch with the right people. Police departments.
Ms. Kleinert. Yes.
Senator Gillibrand. That might be a way, Ms. Greisman. To
reach out to law enforcement so that the FTC can actually brief
every police department in America, you know, over the next
several years would be great because, you know, if Ms. Kleinert
has an extinct to report this to the police, and the police
make fun of her or do not take her seriously or say, well, you
are stupid, then not only does Ms. Kleinert not get justice or
does not get to effectively report, but it is going to make her
feel that it was her fault. That is exactly the opposite of the
nature of these crimes. They are highly sophisticated
adversaries, who are doing everything they can to steal
resources. Is that something the FTC can do, Ms. Greisman?
Ms. Greisman. We do work closely with local police offices
and have----
Senator Gillibrand. You put together a training for them,
like even just a deck of slides for police departments to use
to train all police officers?
Ms. Greisman. I do not know that we have specifically done
a training for police officers. We do have a tool kit actually
on stopping gift card scams, and the driving force of it, the
message, is that gift cards are for gifts. That tool kit is
targeted toward retailers, and it gives them information they
can display in their stores, interact with customers.
Senator Gillibrand. That is super helpful. Well, maybe
then--I mean, on this Committee, we will have recommendations
because that is what our committees do, but just from this
hearing alone I hope that you will take some of the information
you learned here and implement it.
Chairman Casey. Well, thanks very much, Senator.
Senator Gillibrand. Thank you, Mr. Chairman.
Chairman Casey. Thanks, Senator Gillibrand.
We will turn to Senator Blumenthal.
Senator Blumenthal. Thank you, Mr. Chairman, and thank you
to you and Senator Scott for having this hearing.
I would like to talk about robocalls which are a bane of
all of our existence but most especially, I think, for seniors.
I hear from them all the time. In 2019, I supported the passage
of the Telephone Robocall Abuse Criminal Enforcement and
Deterrence Act, known as the TRACE Act, which directed the FCC
to establish standards to protect consumers from
unauthenticated numbers and to work with providers to verify
the legitimacy of incoming calls.
This law has worked in part, not an ultimate answer, but
now nearly 95 percent of high-risk robocalls do not originate
from the 6 largest carriers.
Unfortunately, smaller internet-based providers, who have
until 2023 to work within the FCC's requirements, now account
for the majority of these robocalls. They continue to prey on
our seniors. They do so especially in these times of pandemic,
when seniors and all of us are particularly vulnerable to these
pitches.
Let me ask you, Ms. Williamson, how effective are
robocallers in reaching consumers, particularly older
Americans?
Ms. Williamson. Thank you for your question. Scams aimed at
older adults are primarily perpetrated over the telephone. The
protections that you mentioned are critical to helping older
adults avoid these types of scams, and we certainly thank you
for your efforts on that. We also believe that their
protections should be enhanced to further clarify that with
respect to the TCPA, that solicitation--the prohibition against
solicitations does apply to scam calls. We need further
protections against spoof calls. We absolutely support the
FCC's efforts on that end to date. We also need to tamp down on
other loopholes, such as the fake charity scams, and make sure
that when consumers, when older adults are being requested to
put their hard-earned money to help others, that those
charities are actually legitimate.
Senator Blumenthal. Taking that point, I think it is an
important point about charity scams. How much have you seen
arise in those charity scams during the pandemic? Is there an
increase? What would you say about charity scams?
Ms. Williamson. Certainly we do not have data on the
charity scams. We just have information that we have heard from
consumers and advocates. What we have heard is that there is
indeed an uptick in these types of fake charity scams, that
older adults at home, isolated, wanting to help in some way,
are being victimized by these types of scams. We are looking to
put more protections in place to help avoid those types of
scams.
Senator Blumenthal. Do you find that seniors are
particularly vulnerable to these scams, as we have found when I
was Attorney General of Connecticut, during times of crisis, in
cases of natural disaster, whether it is hurricanes, floods? We
have seen a lot of both and other weather events. Is there an
increased vulnerability because of those natural disasters?
Ms. Williamson. Oh, absolutely. Scammers read the
headlines. They follow what is happening, especially if they
are outside the United States. They follow what is happening in
terms of disasters, in terms of other issues coming up in the
news, and they tailor their scams to fit those details. If
there is a natural disaster, if there is a fire, flood in an
area, they are targeting consumers in those areas. They are
targeting older adults. They are targeting people who they know
to be sympathetic, who they know to be charitable, to get them
to turn over their hard--earned money to them.
Senator Blumenthal. What I have advised seniors is that
they should contribute and be generous but make sure they know
that the organization that they are supporting is in fact the
one that they really want to support. In other words,
Americares, the Red Cross, these organizations are established.
They do good work. Would you agree?
Ms. Williamson. Absolutely would agree that there are ways
to research the charity and make sure that it is legitimate,
make sure that it will help the people you intend--that your
money will help the people you intend your money to be directed
toward. There are so many ways to absolutely find out about the
background of an organization.
We always advise for consumers to be wary, that if they are
being solicited over the phone to research the organization
through other means, and to really give their money to
reputable charities.
Senator Blumenthal. Thank you very much, Ms. Williamson.
Thanks, Mr. Chairman.
Chairman Casey. Thanks very much, Senator Blumenthal.
The second vote just started, almost about 10 minutes into
the vote, so we have got to hustle. We will hear from Senator
Rosen who rejoined us, then Senator Kelly, and then we will
close. Senator Rosen.
Senator Rosen. Thank you. I have already voted. I was
presiding in the Chair. Thank you, Chairman Casey, of course,
Ranking Member Scott. This is a really important hearing,
Chairman. Scams against seniors are nothing new, and they are
only increasing in scope and severity. I appreciate your
holding this important hearing and for all the witnesses here
today for the important work that you do. Of course, Nevada is
no different than some of the other states or most other
states, and we have a lot of challenges in health scams,
particularly now of course with the pandemic. You know, one of
the challenges throughout the pandemic has just been the
unchecked spread of misinformation, disinformation, of course,
resulting in an increase in scams, especially those targeted at
seniors.
In fact, according to the Federal Trade Commission, in
2020, Nevadans over the age of 60 lost more than $36.5 million
to scams. That is a lot of money. Some of the most common
COVID-19 scams in Nevada related to those involving the
creation and distribution of fake vaccine cards and contact
tracing scams in which scammers pose as health department
officials asking for sensitive personal information, such as
your Medicare or Social Security number.
Fortunately, our attorney general, his office has compiled
a list of COVID-19-related scams and tips on how to avoid
falling victim. People have resources, where to check if they
are able. As elected officials, I believe we have to do as much
as we can to get the word out about these scams.
Ms. Greisman, for the record, I want to really clear the
air for Nevada seniors and get this out everywhere I can. Would
a legitimate tax department official ever ask for a senior's
personal information, like their Medicare or Social Security
number, with the contact tracing for COVID-19?
Ms. Greisman. No, no. No legitimate entity would make an
unsolicited request for that kind of personal information.
Senator Rosen. Thank you. I am going to reiterate that; no
legitimate entity would make a request for that personal
information. Thank you.
I know you have been speaking about this, but for those who
do fall victim and they do give their sensitive personal
information and they fall victim to now a COVID-related scam,
can you talk about, Ms. Williamson, some of the resources
available to the senior or someone who is helping them, maybe
another family member or a caregiver, to help recover that
information and reverse potential damage?
Ms. Williamson. Sure. There are many resources available to
older adults who have fallen victim to scams and frauds. I
think the first line of defense is for the older adult and his
or her advocate to really audit all of their financial
accounts. Call their banks. Call the credit card company. Make
sure that they reach out to law enforcement organizations. Of
course, the FTC has a great part of their website that will
help victims as well. I would refer folks to that as well.
What is also important is to reach out to the IRS or the
Social Security Administration if there has been a disclosure
of personally identifiable financial information. Just make
sure those organizations as well know that you have been
victimized by this scam.
It is also important really to reach out to a legal
services organization or to another lawyer to make sure that
you protect your whatever money or assets you have remaining
because if the fraudsters really have your financial
information they could be wrecking--doing damage to not only
your credit report but also trying to seek other assets that
you may have.
Senator Rosen. Thank you. We have been really proud because
our U.S. attorney in Nevada appointed a COVID-19 fraud
coordinator to lead investigations, to help with just the kinds
of things you are talking about, and our attorney general did
announce the creation of a COVID-19 task force to help protect
Nevadans, all of Nevadans, not just seniors, who may fall
victim.
It is a whole-of-government approach that we are trying in
my home State. It is a response with 15 agencies--FBI, Secret
Service, SBA, our small business office, inspector general, the
post office, the police departments. We are really trying to
pull together to protect people, because we did this, Nevada
ranked first amongst all states for the reported number of
total fraud reports in 2020, with a whopping number of over
35,000 fraud reports, and so now 18 months into this pandemic,
what can you--what lessons have we learned from these types of
task forces that we can report to other states to help protect
people?
Chairman Casey. Just for the information of the Senator,
because we have got a vote, I just want to make sure we--
Senator Rosen. Okay. We will take it off the record. Thank
you.
Chairman Casey. If we can do that in writing, that would be
better.
Senator Rosen. Thank you.
Chairman Casey. Thank you, Senator Rosen, for coming back
to the hearing and being with us. Now Senator Kelly.
Senator Kelly. Thank you, Mr. Chairman.
Ms. Greisman, I wanted to follow-up on Senator Blumenthal's
question about robocalls. Arizona ranked first in complaints to
the FTC about the Do Not Call Registry or the Do Not Call List.
Arizonans are getting these calls all hours of the day. Some
folks are getting hundreds of calls in a week. Nobody can blame
Arizonans for being frustrated about this. I think we all are.
There has been a fair amount of activity in the courts this
year related to the TCPA, the Telephone Consumer Protection
Act. Could you give us an update where things stand, penalties,
maybe an example of a specific case, and what Congress can or
should do in order to better our constituents?
Ms. Greisman. Senator Kelly, obviously, robocalls, unwanted
calls, whether live or prerecorded, are a significant consumer
protection issue. Each month, the FTC is receiving some 450,000
complaints from consumers about unwanted calls. Typically, 68
percent of them relate to robocalls.
FTC has a vital, vibrant law enforcement program combating
unwanted telemarketing calls. We recently settled with a cruise
line, Grand Bahamas, just earlier this week, involving millions
and millions of unwanted calls. We brought some 150 law
enforcement actions and coordinated with all of our State
partners, including Arizona. Both in terms of law enforcement
and consumer outreach, it is a significant part of the work
that we do.
Senator Kelly. Do you know, what is the rate of robocalls?
The number that consumers are receiving, has it been lately
trending up or down?
Ms. Greisman. In what has been reported to us, it has held
pretty stable at about 450,000 a month. What we are seeing are
the call-blocking technologies are working. Recently, STIR/
SHAKEN been deployed among the larger carriers. Senator
Blumenthal mentioned this; it took effect just in June of this
year. Obviously, a lot of issues remain with the smaller VoIP
service providers that Senator Blumenthal also talked about.
We sued a number of them. Our State partners sued a number
of them. Our DOJ has sued them. There is significant law
enforcement work to tamp down on these unwanted calls.
We are not there. There is no question about that. I assure
you we are hard on the issue.
Senator Kelly. Well, please let us know if there is
anything you need from Congress here to make your job easier.
Thank you, and I yield back the remainder of my time.
Chairman Casey. Thank you, Senator Kelly.
In light of the fact the vote is now into overtime, I think
we have to close right now, but I will be submitting a
statement for the record as I understand Ranking Member Scott
will as well.
Chairman Casey. Let me just say this for the record, two
things: Number one, we want to thank our witnesses for the
testimony they brought to us today on these terrible scams and
ways we can prevent them. For the record, if any Senator has
additional questions for witnesses or statements to be added,
the hearing record will be open for seven days until Thursday,
September 30.
Chairman Casey. Thank you all for being here. We are
adjourned.
[Whereupon, at 11:20 a.m., the Committee was adjourned.]
CLOSING STATEMENT OF SENATOR
ROBERT P. CASEY, JR., CHAIRMAN
Thank you to all the witnesses for testifying today. A
special thank you to Ms. Kleinert for sharing your experience
with us. Your powerful story is a reminder that we must keep
fighting to prevent these predatory schemes and bring these
criminals to justice.
No one should have to go through what Ms. Kleinert has been
through. No one should experience the shame and loss that comes
with having been exploited by a criminal. In Congress, we have
a sacred duty to protect seniors against these criminals.
Again, I am pleased that today the Aging Committee is
releasing our 2021 Fraud Book, which will arm older Americans
with the information they need to protect themselves from
scammers.
We know even more work needs to be done. That starts with
putting the bipartisan Stop Senior Scams Act, S. 337, on
President Biden's desk. I'll keep fighting to pass this
important bill.
Thank you.
CLOSING STATEMENT OF SENATOR
TIM SCOTT, RANKING MEMBER
Thank you Chairman Casey. Thank you to our witnesses. Being
aware and staying vigilant is the best way to protect yourself
from frauds and scams. One way to protect the seniors in your
life is to check in on them. Stay connected to your parents,
grandparents, aunts, uncles, neighbors, and friends, especially
during COVID lockdowns.
In 2020, more than 1,300 South Carolinians aged 60 and
older fell victim to frauds, losing nearly $10 million. By
working together, we can help older Americans make informed
decisions. COVID-19 has made it harder to stay connected.
Now, more than ever, we have got to support one another. We
know that in-person meetings allow friends and family members
to see changes in a person's behavior that serve as red flags.
I want to thank Vee Daniel for her time today, her powerful
testimony, and her service in supporting seniors across South
Carolina. The Better Business Bureau Serving Upstate South
Carolina is positively influencing the lives of so many seniors
and their loved ones. Perceptive seniors are informed consumers
who can spot and stop con artists. It is vital that we continue
to raise awareness of these scams and advocate on behalf of our
seniors.
Thank you Chairman Casey. It has been such a long-standing
tradition of the Aging Committee to highlight ways to fight
against frauds and scams, and I'm humbled to do this work with
you.
I yield back.
=======================================================================
APPENDIX
=======================================================================
Prepared Witness Statements
=======================================================================
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
=======================================================================
Questions and Responses for the Record
=======================================================================
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
=======================================================================
Additional Statements for the Record
=======================================================================
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
[all]