[Senate Hearing 118-798]
[From the U.S. Government Publishing Office]
S. Hrg. 118-798
PROTECTING AMERICANS' MONEY: COMBATTING
SCAMS AND FRAUDS AGAINST SENIORS AND
SAVERS
=======================================================================
HEARING
before the
COMMITTEE ON
BANKING,HOUSING,AND URBAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED EIGHTEENTH CONGRESS
SECOND SESSION
ON
EXAMINING THE WAYS OUR GOVERNMENT IS COMBATTING SCAMS AND
FRAUDS AGAINST SENIORS AND SAVERS
__________
SEPTEMBER 12, 2024
__________
Printed for the use of the Committee on Banking, Housing, and Urban Affairs
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available at: https: //www.govinfo.gov /
______
U.S. GOVERNMENT PUBLISHING OFFICE
63-717 PDF WASHINGTON : 2026
COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS
SHERROD BROWN, Ohio, Chair
JACK REED, Rhode Island TIM SCOTT, South Carolina
JON TESTER, Montana MIKE CRAPO, Idaho
MARK R. WARNER, Virginia MIKE ROUNDS, South Dakota
ELIZABETH WARREN, Massachusetts THOM TILLIS, North Carolina
CHRIS VAN HOLLEN, Maryland JOHN KENNEDY, Louisiana
CATHERINE CORTEZ MASTO, Nevada BILL HAGERTY, Tennessee
TINA SMITH, Minnesota CYNTHIA M. LUMMIS, Wyoming
RAPHAEL G. WARNOCK, Georgia J.D. VANCE, Ohio
JOHN FETTERMAN, Pennsylvania KATIE BOYD BRITT, Alabama
LAPHONZA R. BUTLER, California KEVIN CRAMER, North Dakota
GEORGE S. HELMY, New Jersey STEVE DAINES, Montana
Laura Swanson, Staff Director
Lila Nieves-Lee, Republican Staff Director
Elisha Tuku, Chief Counsel
Cameron Ricker, Chief Clerk
Shelvin Simmons, IT Director
Pat Lally, Assistant Clerk
(ii)
C O N T E N T S
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THURSDAY, SEPTEMBER 12, 2024
Page
Opening statement of Chair Brown................................. 1
Prepared statement....................................... 29
Opening statements, comments, or prepared statements of:
Senator Scott................................................ 4
Prepared statement....................................... 30
WITNESSES
Amy Nofziger, Director of Fraud Victim Support, AARP Fraud Watch
Network........................................................ 5
Prepared statement........................................... 32
Carri Grube Lybarker, Administrator and Consumer Advocate, South
Carolina Department of Consumer Affairs........................ 7
Prepared statement........................................... 44
Sheryl Harris, Director, Cuyahoga County, Ohio, Department of
Consumer Affairs............................................... 9
Prepared statement........................................... 50
Additional Material Supplied for the Record
Letter submitted by NASAA, Inc................................... 52
Letter submitted by the National Sheriffs' Association........... 57
(iii)
PROTECTING AMERICANS' MONEY: COMBATTING
SCAMS AND FRAUDS AGAINST SENIORS AND
SAVERS
----------
THURSDAY, SEPTEMBER 12, 2024
U.S. Senate,
Committee on Banking, Housing, and Urban Affairs,
Washington, DC.
The Committee met at 10 a.m., via Webex and in room 538,
Dirksen Senate Office Building, Hon. Sherrod Brown, Chair of
the Committee, presiding.
OPENING STATEMENT OF CHAIR SHERROD BROWN
Chair Brown. The Committee on Banking, Housing, and Urban
Affairs will come to order. We have, I understand, two Ohio
witnesses. One who lives in Cleveland and one who was born in
Ohio.
So, sorry, South Carolina, we've gone one, one out of three
is not bad. OK?
Senator Scott. She is equal to the task at hand.
Chair Brown. I'm sure she is.
Senator Scott. She is versed as well.
Chair Brown. As we begin, I would like to take this
opportunity to welcome Senator Helmy, who is not yet here, from
New Jersey, to the Banking and Housing Committee. We are
expected--we're excited for him to join us and look forward to
working with him on this Committee for the next couple of
months.
In the Old Testament, Jacob tricked Isaac and took Esau's
birthright. The American public first heard of Charles Ponzi in
the 1920s. So, scams and frauds are nothing new in this country
or in this world.
In the last few years, what used to be a trickle of scams
and suspicious emails now and then is starting to feel like a
flood. These scams can start with a similar, with a simple text
in what seems like a wrong number.
Or, they can be more devious, a call disguised to look like
it's from a friend or a local bank. The most manipulative ones
use artificial intelligence to disguise their voice or to mimic
a family member. All of these, you're familiar with.
Once they've made contact, the scammers go to work. They
might claim to have something in common with you. They might
say they're a law enforcement agent who needs help cracking a
case. They might claim to be interested in a romantic
relationship, or a friendship, or even say a child or
grandchild is in trouble and needs your help.
The scammers will use information found online or the dark
web to customize their scams to their targets. An American who
has worked hard and saved for retirement and their family's
future, that's who usually is the target.
The messages may be quick and urgent. They may be
intermittent with the conversation stretching on for months, as
the scammer builds a relationship.
But, they always end the same way, a con that drains as
much of someone's savings as possible. And we know today
savings, since there are fewer defined pensions and more
401(k)s, the targets are even more rich for these scammers.
The data backs up what Americans have experienced. Scams
and frauds have never been more pervasive. Criminals will use
any means they can to steal Americans' hard-earned money. Wire
fraud, peer-to-peer platforms, check fraud.
In Ohio alone in 2023, more than $126 million, $126 million
in a State of 12 million people, were reported lost to fraud.
The stories are heartbreaking. A senior in Warren, Ohio, and
under Youngstown, lost $127 thousand to criminals posing as
bank employees.
A man in Mayfield Heights, in Cuyahoga County, in
Cleveland, lost $80 thousand to a fake investment scheme. One
group running romance scams laundered nearly $12 million in
central Ohio.
It happens across our country. The FTC says $10 billion are
reported lost to fraud nationwide in 2023, an increase of over
a billion dollars from the previous year. And we know so many
that much of this is not reported.
Consumers around the country lost at least $270 million
through wire fraud. Those are just the scams that are reported.
We know many people are reluctant to come forward and report
their losses, embarrassed to admit that they were conned.
They shouldn't be. These scammers are professionals. They
use all kind of new technology, harder and harder to detect,
even if you try to be vigilant. These criminals want those they
target to feel ashamed and to feel scared to come forward so
they can continue scamming others.
But, these scams can and do affect Americans of all ages.
But, we know seniors face the greatest threat. It's not just
that they may be less familiar with new technology, they're the
biggest target because of their retirement savings.
I spent my career working for, fighting for working
Ohioans' pensions. But, fewer employers offer pensions. More
and more seniors have been forced to rely on personal
retirement savings accounts built over a lifetime of hard work.
These accounts are particularly enticing targets for
scammers. Americans over 60 represented more than half the
dollars lost to fraud in 2023.
Seniors are especially reluctant to come forward. They
blame themselves. They don't want to be seen as unable to
manage their own finances. But, no American, young or old,
should ever have to blame themselves when they're defrauded by
organized crime.
Scammers use new technologies to stay a step ahead of law
enforcement. They plan complex sophisticated frauds that
stretch out over months. They'll use fake websites that are
impossible to distinguish from real ones.
Worst of all, they exploit our best instincts to trust one
another, to keep families safe, to act quickly in an emergency.
No wonder their schemes so often succeed.
We know that scams are now perpetrated by organized
networks overseas, some managed unbelievably, maybe, maybe not,
by Chinese criminal gangs using slave labor. These criminals
have kidnapped thousands of people, locked them in compounds in
Southeast Asia, forced them under threat of torture, to execute
these scams against Americans.
It's organized crime, it's human trafficking, it's modern-
day slavery come together with one sinister goal, to steal. To
steal the nest eggs Americans have worked their whole lives to
build.
Individual Americans can't fight this threat alone. They
shouldn't have to. Federal, State, and local law enforcement
must work together. They must have the tools and resources they
need.
But, the private sector, the private sector must step up
and do more to protect people. These scams begin often on
social media. Tech companies work to prevent these scams from
taking root in their platforms.
And when payment platforms fail to protect their customers
from scams, it's on them to reimburse the scammed consumer.
Payment platforms like Zelle, and Venmo, and Cash App, need to
take responsibility for keeping their customers' money safe and
secure and reimburse more consumers who have been scammed on
their platforms.
Big banks with all their vast resources and tools at their
disposal, also needs to do more, also need to do more to
identify scams and stop consumers from losing their life
savings through wire fraud. And with the rise in wire fraud,
the CFPB needs to use its authorities to ensure big banks allow
the law and to follow the law and protect consumers from wire
fraud.
Wall Street firms and tech companies see the same scams
over and over and over. We know when something threatens their
profits, these big banks spare no expense to try to take it
down. They ought to dedicate the same effort, I argue, a lot
more effort into protecting the money that consumers entrust to
them.
Senators Hagerty and Tester have introduced a bill to
strengthen protections against financial exploitation for
seniors by extending protections that exist for brokerage
accounts to mutual funds. I appreciate Senator Tester's work on
this, and Senator Hagerty is not here yet.
Communities across the country, State and local officials,
have been on the front lines in the fight against scams. Groups
like AARP, thank you, have also mobilized to protect seniors
and consumers.
One leader in these efforts is Ohioan Sheryl Harris,
Director of the Cuyahoga County Department of Consumer Affairs.
We're fortunate to be able to hear from her about her work to
protect people in my State, to hear from all our witnesses
about the evolving threat from scams and frauds. I look forward
to continue our work.
Ranking Member Scott.
OPENING STATEMENT OF SENATOR TIM SCOTT
Senator Scott. Thank you, Mr. Chairman. Thank you for being
here today all the witnesses.
First and foremost, I want to start today by thanking our
law enforcement partners at the State and the Federal level.
Every day our law enforcement members work tirelessly to combat
crime, including financial crime, and to protect and defend
victims in every community around the country.
And that's exactly what the frauds and scams are. They are
crimes. And the criminals who commit these crimes should be
punished accordingly.
I also want to acknowledge our regulators both at the State
and the Federal level, as well as our financial institutions
and companies that work tirelessly to combat and prevent
criminal actors from taking advantage of hardworking Americans.
This includes their critical work at educating consumers on the
warning signs of popular frauds and scams.
The first step to stopping fraud is ensuring that people
are equipped with the tools to recognize the very fraud that so
many of us fall victim to. Criminals are inherently looking to
benefit themselves without regard for the wellbeing of others,
and certainly, without respect of the law.
And, unfortunately, criminals often prey on our most
vulnerable, which, of course, would be our seniors.
Unfortunately, it seems almost daily that I hear a horrible
story of hardworking Americans who have worked their entire
lives, forced to come out of retirement after having the scams
and their savings wiped out by the scams.
My time as Ranking Member of the Aging Committee allowed me
to learn a great deal more about these types of crimes, in
particular, the severe detriment they have on our Nation's
seniors. That is why I advocated to holding hearings directly
focusing on these types of fraud and issued an annual fraud
book to bring about more awareness of these scams.
Today, I look forward to hearing from the panel of
witnesses in front of us today, so that we can understand the
new and emerging solutions to fight this epidemic. And it is my
hope that this will not simply turn into a blame game of who's
responsible, whether it's the financial industries, whether
it's the scammers.
We need all hands on deck to solve the problem that we face
today and help protect more Americans from the challenges that
they have once their savings are gone. I believe, frankly, that
part of the solution starts with education.
And, for my time in Congress, I have continued to promote
financial education and financial literacy, because those, as
my top priorities, allows us to address the very challenges
that so many Americans face. If we can help more Americans
access financial education, we can help them have the tools to
both protect themselves, as well as achieve financial freedom.
This is why I am so pleased to have Carri Grube Lybarker
with us today. She is the Administrator of the South Carolina
Department of Consumer Affairs, before us today.
And she will share her perspective and some of the things
she's been doing to help combat these challenges. I love this,
``Ditch the Pitch''. Sometimes, the fewer words you use, the
more you actually say, the more effective you are at
communicating.
And, I will say, in a world that is, unfortunately, moving
at a faster pace, the longer we have to listen, sometimes the
less we actually absorb. And so, ``Ditch the Pitch'' gives us
at home in South Carolina, an opportunity to learn ways to
reduce the impact of scams, and frankly, to detect them
quickly, and perhaps, avoid them altogether.
Our Nation's seniors are not only the ones affected by
these crimes and these criminals are looking for new targets
every single day. Criminals are unfortunately smart and agile.
Just like we are working to use new technologies to drive
efficiencies and choice, criminals are using new technologies
to pad their own pockets at someone else's expense. That's why
we must adapt and continually work to innovate. We must also
work to educate and combat criminals using these same
technologies for ill gain.
And let's not forget what we heard in February when this
Committee examined check fraud. Old technologies are also being
used to exploit in an increasing frequent manner.
I'll close like I started. I am grateful for the work of
our law enforcement, our regulators, and our financial
institutions, what they're doing together to combat and prevent
financial crime.
I am really proud of the good work being done to better
educate people of all ages on the fraud and scams they face.
Today I hope we hear ideas on how we can improve our
technology, our education, and our approaches to stopping these
crimes, all the while making sure we are not incentivizing new
or additional criminal acts.
Thank you all.
Chair Brown. Thank you, Senator Scott.
I want to introduce today's witnesses. Amy Nofziger is the
Director of Fraud Victim Support for the AARP Fraud Watch
Network. Welcome.
Carri Grube Lybarker is the Administrator of Consumer
Advocate of the South Carlina Department of Consumer Affairs.
Welcome Ms. Lybarker.
Sheryl Harris is the Director of the Cuyahoga County
Department of Consumer Affairs.
Thank you all for being here. Welcome.
And, Ms. Nofziger, please proceed.
STATEMENT OF AMY NOFZIGER, DIRECTOR OF FRAUD VICTIM SUPPORT,
AARP FRAUD WATCH NETWORK
Ms. Nofziger. First thing I forgot. Good morning. My name
is Amy Nofziger and I am the Director of Fraud Victim Support
for AARP's Fraud Watch Network. Thank you for inviting me to
testify today on behalf of AARP. And thank you for holding this
vitally important hearing.
Fraud is devastating millions of lives across the country.
Each year, AARP's fraud watch helpline receives over 100,000
calls from those impacted by fraud. Many of these calls are
absolutely heartbreaking.
When I joined AARP doing fraud prevention work in 2001, I
believed I would soon put myself out of business by convincing
everybody that foreign lottery wins, and tax payments and
prepaid gift cards were scams. Yet, here I am, 23 years later,
fighting the same fight, having many of the same conversations.
While the conversations with the victims may be the same,
AARP's education and outreach efforts have evolved as scammers
tactics have also evolved. I have sat with victims for hours on
the phone while they cried and told me how a criminal stole
their life savings.
Recently, I talked with a Georgia man who reported that he
received an email from someone claiming that he had won money
and a new car. He lost $70,000 in gift cards to pay the
fraudulent fees. And was also very worried that his identity
had been compromised.
Or, Cece, a woman who had been married for 30 years, who
called because she had no one to talk to about her husband, who
was a victim of a sextortion cryptocurrency scam and lost over
$1 million. She kept saying while on the phone with me that
Amy, he's so smart. What are we going to do? I can't tell
anyone.
Criminals don't care who you are, where you live, or how
much money you have. They are simply looking to steal as much
as they can, however they can.
The FBI estimates that $3.4 billion was stolen from
individuals over the age of 60 in 2023. But we believe this
figure is vastly underestimated.
The true loss to our communities is likely closer to $137
billion a year according to the FTC. That is money that would
have been used for retirement, healthcare, daily expenses,
trips, entertainment, dining out, and even spoiling the
grandkids.
These criminals not only steal from victims they prey on,
but the victim's families and the community that they live in.
They rob them not only of their money, but their future, their
wellbeing, and too often, their dignity.
And the lost money is just the beginning. I want to tell
you about a healthy older woman who had her life savings stolen
by the person she thought was the love of her life, but in
fact, he was a master manipulator who spends all day, every
day, using every trick in the book to steal money from people.
Her daughters told me that her health declined so quickly
after she learned he had taken all of her money. The daughters
told me that this twice a week tennis player's hair started
falling out in clumps and her health deteriorated so fast she
died within 4 months when she realized she had been a victim.
It is a tragic fact that these criminals wreak havoc and
can drive individuals to premature death or even suicide. A
reality that is likely underreported and that frankly keeps me
up at night.
Because of this, we must adapt our approach for combatting
fraud, just like the criminals are adapting their approaches.
Fraud is constant and never rests. It operates 24/7 in our
homes and through these devices that we carry in our pockets.
Victims' losses have escalated from hundreds and thousands
to millions of dollars. Many still believe it won't affect
them. But we know this is far from the truth.
It impacts individuals across all education backgrounds,
income levels, all ages, and across the country. It will happen
to you or someone you are for. It may already have, and you
just don't know it.
AARP has long been committed to educating consumers and
supporting fraud victims. Together with thousands of AARP fraud
volunteers across all of our State offices, those who volunteer
on our Fraud Watch Network helpline, and the dedicated staff of
the Fraud Watch Network, we will continue this fight.
We look forward to collaborating with you to raise
awareness about fraud and to develop effective solutions that
protect and support victims and their families.
Thank you for your attention to this critical issue and I
look forward to your questions.
Chair Brown. Thank you, Ms. Nofziger.
Ms. Lybarker, welcome.
STATEMENT OF CARRI GRUBE LYBARKER, ADMINISTRATOR AND CONSUMER
ADVOCATE, SOUTH CAROLINA DEPARTMENT OF CONSUMER AFFAIRS
Ms. Lybarker. Thank you very much, Chairman Brown, Ranking
Member Scott, and other Members of the Committee. I appreciate
the opportunity to provide comments to you all today on this
important topic of protecting seniors and others from scams.
I am Carri Grube Lybarker, and I get to serve as the
Administrator and Consumer Advocate for the South Carolina
Department of Consumer Affairs. With me today as well, is Kelly
Rainsford, our Agency's Deputy Administrator and General
Counsel.
The Department is South Carolina's consumer protection
agency. Overall, our mission is to protect consumers from
inequities in the marketplace, while giving due regard to those
businesses that act honestly and fairly. One of the many roles
we have at the Department is to receive scam reports. The top
three scam categories often encompass the purchase of a fake
good or service, or a lottery or sweepstake scam.
And the largest group of folks filing a scam report is the
in 65- to 74-year-old range. The reports we receive help keep
us informed of new schemes and tactics used by scammers.
A fraudster's goal is the same, they are all trying to
separate a consumer from their hard-earned money or their
personal information. But there are often new types of schemes
that pop up, the romance scam being one of them, and a new
twist, like requesting payment via a mobile app.
As technology evolves, so do scammer's methods. New
technology has helped their schemes seem more legitimate. A
common tactic used is spoofing.
We initially saw this with telephone numbers, making it
look like somebody else was calling or sending a text message.
And now, spoofing applies to all forms of contact, a fake
website, a fake email address, hijacked or fake social media,
and computer pop up messages.
Security breaches and scams often go hand in hand as well.
In this digital age, our personal information is unfortunately
more accessible to bad actors and information stolen in a
breach can help make a scheme seem more legitimate.
In 2023, the Department received reports of 130 breaches,
affecting over 3.2 million South Carolina residents. And, for
context, we currently have approximately 5.3 million residents.
The Department actively tracks the types of scam reports
received and uses the information for our outreach efforts.
Education is a core component of our mission. And we recognize
that it truly is the best defense for avoiding becoming a
victim.
Our outreach and educational efforts span traditional and
nontraditional media distribution. We've adapted to technology
and became the first State agency active on the Nextdoor app.
Since our first post in October 2021, we have had over 13
million views. And we credit this exposure to increasing our
weekly website visits, our YouTube views, and our webinar
attendance.
But presentations really are the foundation of our
educational initiatives. And, over the past 5 years, the
Department has given over 750 presentations to over 31,000
attendees.
Our most popular presentation topic, Identity Theft and
Scams, which correlate to our newest offering, Ditch the Pitch
Bingo. Each number called during the game has an educational
tip of spotting or avoiding scams.
And this idea came from a meeting with the U.S. Attorney's
Office, when they introduced us to the Pennsylvania Department
of Banking and Securities, Investment Fraud Bingo. We decided
that our number one publication, ``Ditch the Pitch'', would be
a great template for the bingo game, and it has taken off.
The Department first released ``Ditch the Pitch'' in 2015.
The guide addresses common scams, how to avoid them, and what
to do if a consumer reveals their personal information to a
scammer.
Since 2019, we have given out over 50 thousand guides and
have had other State and counties reach out and ask for
permission to use the content for their own education.
This extensive outreach would not be possible without the
help of partner agencies and organizations. We can create great
helpful content all day long, but efforts are futile if we
don't get them into the hands of those who need it most.
Our recent release of our updated ``Ditch the Pitch'' is a
great example of leveraging partnerships. The South Carolina
Department on Aging teamed up with us to distribute the
publication to over 9,000 residents who are served by their
home delivered meal program.
In addition to State agencies, we partner with local and
Federal agencies, as well as private organization. Another
example of a fruitful partnership is with AARP and their Tele-
Town Halls. We are able to educate thousands of their South
Carolina members in one sitting, via an interactive conference
call.
While education is key to keeping consumers protected, we
have seen some other efforts and laws that help as well. One
example at the Federal level is the FCC's STIR/SHAKEN
Framework. From 2019 through 2023, 57 percent of consumers
reporting a scam to the Department were contacted by phone. So,
providing telephone providers the ability to stop scam calls
before they get to a consumer or otherwise alerting that a call
is likely a scam, are helpful tools.
Newly implemented legislation in South Carolina has also
allowed the financial institutions and security providers to
pause a transaction request if financial exploitation of a
vulnerable adult is suspected. We've also seen industries
voluntarily initiate notices to consumers when using certain
payment methods that are requested by scammers, including
warnings at payment terminals when gift cards are being
purchased.
In closing, I want to thank you for your continuing work to
protect consumers and for holding this hearing. We at the
Department are grateful that you allowed us to be a part of it.
And I hope that our comments are beneficial.
Chair Brown. Thank you, Ms. Lybarker.
Ms. Harris, welcome.
STATEMENT OF SHERYL HARRIS, DIRECTOR, CUYAHOGA COUNTY, OHIO,
DEPARTMENT OF CONSUMER AFFAIRS
Ms. Harris. Thank you. So, my name is Sheryl Harris. I am
the Director of the Cuyahoga County, Ohio, Department of
Consumer Affairs. Thank you so much for the invitation to speak
to this Committee.
Consumer Affairs organizes and convenes Scam Squad, a
financial fraud task force. Scam Squad's members include
nonprofit and social service agencies that primarily serve
seniors, county agencies and enforcement agencies ranging from
local police to the Cleveland Offices of the FBI, the U.S.
Department of Justice, and the Federal Trade Commission.
Our members have three shared goals, encourage county
residents to report scams, share scam reports with the agency
best suited to investigate, and alert residents to current scam
threats.
We want to create easy ways for people to effectively
report scams to enforcement agencies. We encourage members to
share scam reports in data bases that multiple agencies can
access, primarily, the FTC's Sentinel data base.
We create innovative scam alerts and reminders that can be
replicated at scale. My office receives only a small sliver of
the scam reports filed by country residents, roughly 800 to
1,000 a year. About 10 percent of those involve a dollar loss.
The majority of our scam reports come from our older
residents. We interview people who report scams to us,
regardless of whether they lost money, to help consumers limit
the fallout for scams, and to spot changes in both scam
technics and scam payment methods.
What I can tell you from these interviews, is that scammers
have designed psychologically complex scams to make people
believe the scammer is a trusted authority.
The scammer tells the person they're facing a dire problem,
for example, they're about to be arrested or the Government is
about to seize their bank account. The scammer is able to
isolate the victim by giving a plausible sounding reason that
they can't tell anyone else. The victims then become reliant on
the scammer, so who's solution then is to route money to the
scammer.
Scammers use all sorts of technology in these scams, which
we've discussed a little. They pose as trusted authorities by
spoofing caller ID. They know information about people when
they call, because of all the consumer data that companies
collect and sell or fail to protect.
And many scammers convince pancaked people to allow them
remote access to their computers so they can further manipulate
victims. Today, we're seeing individuals lose much larger
amounts to scams in shorter periods than ever before.
Scam losses reported just to my office, have doubled in the
last year, from 1.2 million in 2023 to 2.7 million so far this
year. That doesn't include scam losses reported to any of our
partner agencies.
In one scam, scammers posing as Federal agents, panic
people into believing they are under investigation, because
drug traffickers are using their bank accounts. These scams are
designed to terrify people into telling, into believing that
they're going to lose all their money, so that when the nice
fake Federal agent tells them they can protect their life
savings by moving it into a Government wallet, and that's scam
speak for crypto, people do it.
We know of at least two cases in which scammers posing as
Federal agents, not only took the victims' life savings, but
then told them they were in mortal danger and needed to move.
When the victims sold their houses, the scammers got the
proceeds from the sales too.
Many of those payments were made in crypto. Crypto payments
are fast. They are final. There's no protection for consumers.
Just last week, the FTC said Sentinel data shows that from
2020 to 2023, scam losses involving crypto increased tenfold to
over $110 million nationwide. And that's just crypto.
Consumers over 60 are three times more likely than other
adults to lose money in crypto. I'm thrilled the Banking
Committee is delving into meaningful ways to stop scams.
Through your work, you have the ability to help older
Americans avoid life altering losses to scams. You can update
regulations to ensure that all payment methods provide consumer
protections that allow victims a way to get their money back.
No matter how someone pays a scammer, gold, crypto, gift
cards, the place consumers get the cash for those transactions
is the bank. Banks have to do a better job protecting customers
from scams.
Thank you for your time and for the opportunity to speak.
Chair Brown. Thank you, Ms. Harris.
The questioning will begin with Senator Tester of Montana.
Senator Tester. Thank you, Mr. Chairman, for the courtesy.
And thank you all for your testimony. I very much appreciate
it.
I'm going to start with you, Ms. Nofziger. AARP Fraud
Hotline, by your own testimony, you've been overseeing it for
23 years? Is that correct?
I'll get to the question here. This is what's the real
important part. Over the last, over the time that you've been
monitoring the fraud hotline, Ms. Harris talked about doubling
in the last year.
What have you seen on that fraud, on the AARP Fraud Hotline
as far as the amount of threats?
Ms. Nofziger. Thank you so much for that question. We've
absolutely seen a significant increase in threats. But I also
want to say, we've seen an increase in reporting.
And I think that's really important. Because when I started
23 years ago, we weren't getting reports. People were still
being victimized, but they were doing it alone. And they were
not reporting it to law enforcement, to us, to any of my
partners here at the table.
And that, to me, is what's encouraging, that people are
reporting it. Because we need to know what's happening so we
can take action to fight it.
Senator Tester. One of the things that's happening, and I
serve and so does the Chairman of this Committee, serve on the
Veterans Affairs Committee, is I get contacts from, actually
it's usually from family members of a member who has been
scammed.
And, when we've reported it to law enforcement, law
enforcement has come in and they refuse to acknowledge the fact
that they've been scammed. How often does that kind of
situation happen?
Ms. Nofziger. I think, it's happening a little bit less
than we think it is.
Senator Tester. OK, good.
Ms. Nofziger. Yes, from what I know from talking with
victims when they do report it to law enforcement.
Senator Tester. Right.
Ms. Nofziger. We also help coach our victims when they do
report it to law enforcement. We say, when you go in there, say
you were a victim of a financial crime. Get your report. But,
just have the expectation that, you know, it might not be all
wrapped up in 24 hours like in a television show, right. Like,
these are investigations that need to happen.
But the most important thing is that people do report it to
law enforcement and that we work with our law enforcement
partners to help them accept those reports.
Senator Tester. So, I'm here to tell you that every day,
every day I either get an email or a phone call from somebody
who is trying to screw me out of my money. So, and a lot of
these folks aren't in the U.S. Some of them are from Russia,
China, Eastern Bloc.
How can the consumers stay ahead of this? And, by the way,
the same thing with the financial folks, the banks, the credit
unions, all those folks, how can they stay ahead of it too?
Because it's never-ending. I mean, it drives my wife crazy
when I actually answer those fake phone numbers. And they call
up and I graduated from college 46 years ago, it was a time
when my parents could pay for my college, so I have no debt.
And they proceed to tell me how much debt I have for going
to college. And I'm positive it ain't about because they're
nice people. It's because they're trying to take money and not
work for it.
So, tell me how consumers and financial institutions can
stay ahead? And that's open to all three of you. Go ahead, Ms.
Nofziger.
Ms. Nofziger. Thank you for that question. And you're
absolutely right. I mean, that is one thing that has
drastically changed the game of fraud, if you want to call it
that, in my 23 years doing this, is the device that we carry in
our pockets.
These criminals are accessible to us 24/7. And we do need
to take control back of these devices that we call phones, but
are essentially minicomputers that we carry in our pocket.
And we need to understand that wherever we are online, the
criminals are online waiting for us. There is built in
technology in a lot of these devices to block unknown calls.
But people are not adapting it. And we've got to get them to
where----
Senator Tester. Show me how to do that.
Ms. Nofziger. I will talk to you afterwards. But that's
exactly what we need to do, is we need to take control back.
Senator Tester. So, what about the calls that I get from my
neighbors that aren't my neighbors? Is there ways that it
blocks those too?
Ms. Nofziger. Absolutely. If they're not in your contacts
list, you can set it up to have any unknown number----
Senator Tester. I'll be damned.
Ms. Nofziger. If it's not in your contacts, go directly to
voice mail.
Senator Tester. That's what----
Ms. Nofziger. But, again, this is where we need to do some
protection barriers in our own lives to protect ourselves. And
I'm sure my co-witnesses have some comments as well.
Senator Tester. Yes. Go ahead.
Ms. Lybarker. Sure. Thank you. So that for us is where the
education comes into play. And what we have tried to do in our
educational efforts is to get to the brass tacks of what folks
are doing and to give people the basics, because if we give
details for things, if we say, a scammer may call you and ask
for Google Play gift cards, if a scammer calls and asks for a
wire transfer instead, they go, oh, that's not a scam.
And so we try to be a little bit more broader with that.
You know, if it's somebody pretending--that they try to pretend
to be somebody you'll recognize. So if you're getting a cold
call from somebody that you're not expecting, you can hang up
and call a number that you know belongs to them. Or they always
say there is a prize or a problem involved. They put in that
pressure and they ask for those forms of payment that are not
easily traceable.
So, and we also told folks not to answer the phone if you
don't know the number, that it will go to voicemail. If it's
important, then you can--you can call them back. But I know
with our elderly population and the state of loneliness that we
have, it's hard--hard for folks to do.
Senator Tester. I just like to fight with them and tell
them to get a real job. But go ahead, Ms. Harris.
Ms. Harris. I agree with everyone at this table. However,
I'm going to say this. You know how many calls you get. It is
incessant, and it never ends.
Senator Tester. That's right.
Ms. Harris. We have people--and like, OK, is it really
practical for you, as a lawmaker, who responds to all sorts of
constituents, to say, only people I know are getting through my
phone.
Senator Tester. Yeah.
Ms. Harris. There has to be more effort put into
identifying scam calls. And SHAKEN/STIRRED is fabulous. It is.
And that's the little thing that comes up on your phone
sometimes where it actually tells you, oh, hey, this is a spam
risk.
Senator Tester. Yeah, yeah.
Ms. Harris. Right? So that's helpful, but so many of these
calls come through to people who, you know, they're not
identified as that. They're unidentified. And scammers have
adapted already. Scammers are very quick to adapt to any law or
rule that we have, but that's why laws have to be really big
and really flexible.
But I just think that to ask--I mean, we tell people, too,
don't answer calls you don't know. But we get calls from people
who are--I'm a nurse on call. I have to answer my phone.
Senator Tester. Yeah.
Ms. Harris. And it's--it is disrupting people's lives
still.
Senator Tester. Yeah. I appreciate your testimony and
appreciate what all of you are doing, and keep educating. Thank
you.
Chair Brown. Thank you, Senator Tester. Senator Scott is
recognized.
Senator Scott. Thank you. Ms. Lybarker, once again, I want
to thank you for representing our home State so well. Without
any question, South Carolina continues to be a nationwide
leader in financial literacy efforts, and I have been impressed
by your ingenuity in those efforts when it comes to fraud and
scam prevention.
I was recently reading about your partnership with the
South Carolina Department of Aging to, once again, deliver scam
prevention and education materials to seniors alongside their
meal delivery. I think that is brilliant. I mean, honestly,
when we're having a meal delivered, if you're able to deliver
information during that time, I'm hungry, I'm going to read it.
This is the way my body works.
So I think that is just a fantastic way of taking advantage
of a positive opportunity to engage with our seniors,
especially in a time where they are going to be more interested
perhaps.
Can you share some insights from that program and others
that your department has carried out over the years?
Ms. Lybarker. Sure. Thank you so much. So with that
particular partnership, it actually started when we initially
released ``Ditch the Pitch'' back in 2015. At that point, it
was the Lieutenant Governor's Office on Aging, and they were
gracious enough to put these on the meals.
And it's folks not only that are usually in our senior
population, but some that are homebound as well. And so they're
likely not going to come out to a presentation or an event
where we are. And so whenever we do outreach or create a
publication or have some kind of campaign, we're looking to try
and find those kind of pathways that we can get it into the
hands of the folks who need it most.
The Department on Aging is one of those. AARP is a great
effort there. This Ditch the Pitch Bingo that we have, we are
part of a World Elder Abuse Task Force, and it's a group of 30
Government and non-Government agencies that all have some kind
of touchpoint with the senior communities in South Carolina.
It could be that they are continuing care retirement
communities, or they provide in-home care services or things
like that, and the Department on Aging is a part of that as
well. But it allows us to network, so we know each other's
services.
So when they are out and about as well and hear something,
they can say, that's an issue Consumer Affairs can assist with,
or you need a presentation on this topic. That's Consumer
Affairs. And we're able to get the word out because we're only
47 full-time employees, and so leveraging those resources at
all levels is very important.
Senator Scott. For those who don't live in South Carolina--
if you don't live in South Carolina, I really don't know why
you don't--but, in the end, 47 employees, really, we have 46
counties. It's literally one person per county if you look at
it from that perspective.
Ms. Lybarker. Right.
Senator Scott. It's a massive opportunity and
responsibility. Opportunity to work more than 40 hours a week.
Ms. Lybarker. Yeah.
Senator Scott. And the responsibility to engage with as
many residents around our State as humanly possible. So we
thank you very much for the work that you are already doing.
Ms. Lybarker. Thank you.
Senator Scott. Let me ask you another question. Sometimes
sitting here in Washington, it's easy to get stuck in the
Beltway mindset and overlook many of the innovative ideas and
solutions that are created within our States.
I pride myself in thinking that my goal as a legislator, as
an elected official, is not necessarily to be the origin of
great ideas but to be the conduit of great ideas. That's one of
the reasons why I love going home every weekend to--back to
South Carolina to hear from my constituents and some experts
and people who have--just have real-life experience on what the
solution is to said problem.
And I look at that from this same perspective when it comes
to scams and frauds and dealing with some of the challenges
that we face. One of the things I think we have to do is make
sure that we never lose hope that we will win this fight. Time
and time again, it feels like the more we see scams being
successful, the less energy we have to fight them because we
kind of feel like we've lost that fight. That is never a strong
position to respond from. So I refuse to believe that we have
lost the fight.
Are there lessons that we can learn from South Carolina to
fight these criminals and prevent harmful scams? Can you please
speak to some of the partnerships you have with financial
institutions, as well as law enforcement, to educate, prevent,
and combat such crimes?
Ms. Lybarker. Sure. So we are not territorial. We don't say
this is our sandbox; we don't want others in it. We certainly
invite others in on all levels. We're an agency that regulates
non-depository financial institutions, and so we have
relationships with folks who are dealing with consumers' monies
and financial products in that way.
So we'll partner with the South Carolina Bankers
Association to do education for their members and other trade
associations as well. On the scams that we're seeing, because
oftentimes it's not just consumer-related--businesses fall
victim to scams as well, which ultimately impact the prices and
the services that they are providing to those consumers.
So making sure that we don't have blinders on, to just stay
in a certain lane and trying to be as broad as we can in our
outreach, and with law enforcement, we partner with different
sheriffs' associations, the Police Chiefs Association. I just
got a contact from Beaufort County where they were reaching out
about a cryptocurrency ATM that was being used for some scams
there.
So having those relationships, building the relationships,
and making sure that we're getting out to those members of our
business communities to let them know what we're seeing, let
them know what to watch out for, and, again, that our services
that are available and others of our partners, too.
Senator Scott. Mr. Chairman, I will finish with this
thought. Listening to the witnesses, one thing that comes to
mind is that many of us as elected officials do some type of a
tele-townhall back in our States. And it seems like it would be
helpful for us to have, in our respective States, a tele-
townhall that includes the AARP, whatever the iteration of your
consumer financial agency is in each State, putting them
together and then doing one extra step, which is looking at
those folks who are homebound, perhaps who may be more
vulnerable because if you're there all the time, you're more
likely and more inclined to pick up the phone perhaps.
If we--we're able to target those folks back at home to
make sure that we are including them in a tele-townhall, that
might be a way for us to address these issues, and not just
through legislation but through information that we can
disseminate from our elected official positions.
Chair Brown. Good idea, Senator Scott.
Ms. Harris, it's easy to look at the data on scams and
frauds and see a pretty scary story--18,000 scams reported in
Ohio last year, according to the FBI, $100 million in losses.
But, like everything, we do a lot of things with that and
statistics here, but it obviously affects individuals, and
every individual has a story.
Run through kind of the human toll of scams for Cuyahoga
County residents.
Ms. Harris. Well, you know, when scammers are able to you
know, to take a huge chunk of someone's life savings, it really
is life altering for them. First of all, they had saved money
for their retirements, as you had mentioned, and it is no
longer available to them.
Second of all, there is a lot of strife within the family.
Grown children are very upset when older people lose money to
scams. We all have this picture of what scam victims are
supposed to be. They are, like, super vulnerable people who
aren't anything like us, you know, aren't running around doing
errands, doing work.
But the truth is, most scam victims are very much like us.
They are vibrant people living lives, and these people who have
savings set aside, they planned to use it through their
retirement and now it's gone. So what we see is, then, grown
children having to take money out of their savings, out of
their kids' college funds, to help their parents, who were
really well set, to help them, you know, do daily expenses,
because now they're living check to check.
In addition, you know, I think, you know, it's a great
point that this causes depression in older people. They--it's
traumatizing to realize that you believe something so fully
that you handed over your money to someone. And it's hard for
us to get our heads around how we, as thinking people, could do
that, but it happens to people all the time, and it happens to
young people as well as old people. But it's truly devastating,
and it rips families--really rips them apart.
Chair Brown. Thank you for sharing that, similar to what
Ms. Nofziger said.
Ms. Nofziger, Americans know to use common sense about
scams, to ignore phishing emails. People are pretty good at
that I think. But I'm concerned that scammers are getting more
sophisticated, more professional, more high tech than ever,
making it harder for people to protect themselves.
How are the risks of fraud and scams changing? And in your
experience, what have you seen with technology and more
sophistication?
Ms. Nofziger. Thank you for that question, Senator. In my
opinion, a scam is a scam and fraud is fraud. So even with the
onset of technology still as the basis, what they're after is
your money or your personal information. And so what we really
try to do at AARP is help people understand what the ask is.
So don't get caught up in all the nuances with technology
or AI or whatever it is. But I will say, one of the biggest
changes I have seen with technology is how fast these criminals
can get our victims' money, particularly with the onset of
cryptocurrency ATM machines that are located across this
country.
We are seeing victims lose thousands to millions of dollars
in these crypto ATM machines, and just like that the money is
gone. So that's definitely, when it comes to technology, one of
the things I have seen. But, again, fraud is fraud, and we just
need to listen for the ask. If they're asking you for personal
information or money, it's a scam, and run away.
Chair Brown. Thank you for that. Yesterday I met with a
group that comes in every year, usually twice a year, a number
of people from the Ohio Credit Union League. And these are
people that run credit unions in all parts of the State, and
they were talking about exactly that, which is a pretty new
phenomenon.
One last question. Ms. Harris, again, thank you. You
pointed out Americans are busy, their jobs, kids, grandkids,
not thinking about someone trying to scam them. Who is better
positioned to detect and stop scams on payment platforms,
consumers or the companies themselves?
Ms. Harris. Well, I'll tell you something. I think of
scammers like spiders. They are--they are spinning this
incredible, deceitful web, and consumers get caught in that,
and they get wrapped so tight in the story they often cannot
extract themselves. And we know because we try to do--if we
hear from a family member, we'll try to extract someone from
a--you know, a little longer term scam, and it is hard.
We know--consumers tell us sometimes that a police officer
talked to them and told them they thought something was a scam,
but they were so trusting of--they had--I guess the scammer had
built such a bond with them that the consumer then walks away
with the phone and says, OK, a police officer just told me that
this was a scam. Are you a scammer?
And the scammers will say something like, that's a local
cop, this is Federal, they don't understand what we do. I mean,
they have an answer for everything.
But what you should know is, even in these one and done
kind of scams, and I mean like, you know, an arrest scam, we're
going to arrest you because you failed to show up for jury
duty, right? Those people are--they're on the phone with--
scammers keep them on the phone for 3 and 4 and 5 hours.
They are so wrapped in the story they are incapable, in my
opinion, of--it would be impossible for all people who
encounter scams and engage with scammers to pull themselves out
of that. They cannot do it. There needs to be something beyond
that that stops the scam and stops the damage, until they can
just step away from the panic that they feel and, you know, see
their situation from a different--you know, from a different
viewpoint.
And that doesn't happen with things like crypto or these
instantaneous payments. And payments--there are so many new
kinds of financial payment systems that are growing up through
the cracks of regulations, I mean, the rules don't always go
over them, right? But also, consumers themselves, when some--a
scammer tells someone this is a Government account, and you're
going to go to a Government kiosk, which is actually just, you
know, a machine that's crypto-equipped, people think, well, OK,
that sounds reasonable.
And sometimes scammers who, you know, can get remote access
to people's computers, they will say, well, you need to log on
to your account because there's something wrong with your
account. So people log onto their bank account, right? And they
say, well, there are all of these payments that are coming in.
So they say type in these codes, and I can show you. Then
the scammer has access to the computer, and what they're--what
they're able to do is they reach in while the consumer is on
their check--looking at their checking account, they reach
behind that, they pull money out of their savings, they drop it
into the--into the checking account.
And so the consumer sees with their own eyes, oh, there was
a big payment, that must have been from, you know, drug
traffickers because I didn't make it. There are so many levels
of deception. We have got to help people.
Chair Brown. That's pretty clear from your answer, because
I ask your companies--the company is better positioned to
spot--to spot fraud. It's where they are.
Ms. Harris. Sorry. I didn't answer that question at all,
but thanks.
Chair Brown. That's fine. I get it. So my time has run out.
Senator Britt from Alabama.
Senator Britt. Thank you, Mr. Chairman.
Thank you all for being here today. Certainly appreciate
the opportunity to have this conversation. The surge of
financial scams, particularly those that target our elderly and
more mature population, our neighbors, our friends, our family
members, it's incredibly disturbing.
I mean, if you look nationwide, fraud losses have been up.
Last year I think it topped $10 billion. I mean, if you look at
the State of Alabama, we were I think defrauded out of nearly
$74 million, which was up from the $55 million the year before.
I mean, it's staggering.
And we know with the benefits of new and more efficient
means of payment also come risks with criminals using these
technologies to truly prey on Americans. And according to the
Alabama Securities Commission, in 2016 there were actually 23
cases of elder fraud abuse. If you look back last year, there
were 159 cases reported. And then, if you look at this year,
just in the first 9 months of the fiscal year, there were
already over 250 cases reported.
So it is clear that we must be doing more, we must be more
diligent, we must do better in educating our population,
particularly the elderly population, with regards to everything
from romance schemes to sweepstakes schemes to impersonations,
that ultimately let them become victims, and that's what we're
here to talk about today. so I want to make sure that we are
enabling law enforcement. I want to make sure that we're doing
everything that we possibly can.
And, Ms. Lybarker, I'd like to start with you. As we know,
criminals are constantly adapting and finding new ways to reach
and manipulate Americans out of their hard-earned dollars. They
are not just scammers operating off of a computer in a basement
anymore, but these are large-scale operations and entire
business models that are actually created to defraud people.
In South Carolina, how is your department keeping up with
the ever-growing list of schemes being used to target the older
population of Americans? And what are the general themes that
you are hearing from victims that you speak to?
Ms. Lybarker. Great. Thank you so much. So I think as far
as how we stay ahead of things or become aware of things is the
reporting. I mean, it was mentioned earlier that folks are
ashamed when they become victims of scams, so it's trying to
get past that stigma so that they can let us know what that new
scam is or what that new tactic is, the nuance as the----
Senator Britt. As she just mentioned, some of them are
still in denial about the process as well.
Ms. Lybarker. Right.
Senator Britt. It takes a minute, so----
Ms. Lybarker. Yes. I mean, because they will stay on the
phone with them while they go to the pharmacy store to get the
gift card, to activate it, and all this. They kind of hook them
in and keep them--keep them in there. So the reporting is very
helpful for us.
Senator Britt. OK.
Ms. Lybarker. Then we can get it out through the media
doing a scam alert or a press release to try and get as many
people out there to know----
Senator Britt. So real quick, if you are watching this, I
want all the people in Alabama to know that if you are a victim
of this, we need you to report it.
Ms. Lybarker. Yes.
Senator Britt. Step one, we need you to report it. OK.
Continue.
Ms. Lybarker. They are not alone. They are not alone.
Senator Britt. You are not alone. Go ahead.
Ms. Lybarker. We're more than happy to walk you through
that, and hopefully be able--we can assist in some
circumstances, especially in the area of gift cards, which is
the number one way that our folks in South Carolina are making
payments to scammers is that we have contacts that we can
hopefully quickly--if you notify us as soon as you realize it,
we may be able to get those monies back for you.
Senator Britt. And that's great, the reporting element. I
had--I had a young man that I worked with that had this very
thing happen with gift cards, and so the--but the reporting
element I think is what we're missing here.
Ms. Lybarker. Yeah.
Senator Britt. So keep going. What else?
Ms. Lybarker. And that allows us--because education, we
say, beware and share. We give the information out to the
consumers, and we encourage them to share it with their family
and their friends, so that everybody knows what those, you
know, red flags are of the scam and where they can go to for
those resources to spread that word, because we certainly can't
do it on our own.
Senator Britt. And can you tell me what type of educational
outreach that you're doing there in South Carolina to let
people know of this? Obviously, we need people to report it.
Then you can--you mentioned putting, you know, some type of red
flag out, but can you tell me what else you are doing from your
department to educate people on this?
Ms. Lybarker. Sure. So presentations, in person and
webinar, is our number one go-to.
Senator Britt. OK.
Ms. Lybarker. It is that face to face. I mean, that's--we
have our ``Ditch the Pitch'', guard against guiding scams. It's
our number one publication that we released that kind of gives
the pitch that a scammer will use and top tips on how to defend
against that scam and then what to do if you do give your
information to a scammer.
And so us being able to get out there and spread that
information is really helpful, and then the webinars, too----
Senator Britt. OK.
Ms. Lybarker. ----you know, makes it very easy for us to do
that. But the partnerships really is a huge way to disseminate
that information and to make sure that everybody knows what
everybody else is doing and where they can refer folks to. And,
again, get it out to the masses.
Senator Britt. Absolutely. And in my last few seconds here,
we are going to try to push this out to as many Alabamians as
possible. Can each of you give a piece of advice to my
constituents about how to be vigilant in this area?
Ms. Nofziger. Thank you. I would say, first and foremost,
understand that this is a problem that affects anyone of any
age. It doesn't matter your education level. I think a lot of
people don't think it's going to happen to them. So when you
see an article in your local paper, or in your AARP magazine,
read it because a lot of people bypass it.
Senator Britt. Absolutely. Thank you.
Ms. Lybarker. Yeah. The number one thing is if you get that
cold call, that email, that text, no matter how it's coming to
you where somebody is asking for that personal information or
that money, it's a scam.
Senator Britt. It's a scam. Don't click on it, don't
respond.
Ms. Lybarker. Right. Don't--it doesn't matter who they say
they are----
Senator Britt. Got it.
Ms. Lybarker. ----cutoff the communication, reach out
directly to who they say they are with a phone number that you
know belongs to them.
Senator Britt. Thank you.
Chair Brown. Thanks, Senator Britt. Senator Warner of
Virginia is recognized. Oh.
Senator Britt. Do you mind if----
Chair Brown. Oh, I'm sorry.
Senator Britt. We're trying to get some good information
out----
Chair Brown. I'm sorry.
Senator Britt. ----to constituents. Thank you.
Ms. Harris. I was just going to say, we try to--we would
really like people to already have a list available to them by
their phone of places--people they can check with.
Senator Britt. OK.
Ms. Harris. Places that they can call. So if you get a call
and it's asking you for money, it's a scam. But sometimes it's
hard for people to recognize that. So if you're asked to make a
big decision in a very short period of time, then have numbers
of a friend. Have numbers of your local police department. Have
numbers of the Consumer Protection Agency near you.
If you have those in advance, you are more likely to dial
those numbers to get help than before you step deeper into that
scam.
Senator Britt. That is great advice. Thank you so much. I
appreciate what you all are doing.
Chair Brown. Thank you. Senator Warner of Virginia.
Senator Warner. Thank you, Mr. Chairman. Appreciate you
doing this. You know, I think all good advice. I appreciate all
of that. I know in Virginia, according to the FBI's Crime
Complaint Center, scammers stole more than 64 million from
Virginians over 60 about 2,500 cases.
I'm going to cite a case in Virginia, but it kind of brings
back a little bit of memory to me. I remember when my dad
passed away--and he had actually told me a little bit before,
and this was a couple years back--I'm not sure it would be
formally scams, but he had been on the line buying kind of
penny stocks of mining operations that sure as heck I don't
think were SEC sanctioned.
So this is not a new phenomenon. I do think with technology
tools it has gotten a lot worse. Matter of fact, a lot of this
came to attention because there was a gentleman in Virginia
named Larry Cook, retired Navy captain, I think probably--and
you all are aware of this case. You know, after suffering from
a stroke in 2019, he became a victim of an international
phishing scam, and initially stole 49-grand from him. At the
time of his death, he had made 74 additional wire transfers,
$3.6 million.
It allowed the General Assembly in Virginia to pass
something called Larry's Law that has improved--we have
actually done some of that already in the Federal legislation
that was passed years back, which was a piece of this, and I
think this will--I'll start with our--Ms. Harris and Ms.
Lybarker--to make sure that our financial institutions are--
employees are better trained to spot some of this behavior.
How do you think we've done on that? And is there more that
we could do at the Federal level?
Ms. Harris. Yeah. I think to require--I think to require
banks and financial companies to actually educate tellers. We
have a scam bingo game, too, and we were playing it once, and a
woman from another county came to the game. And she stood up
during the game and said that she had been she had received an
email that told her that there was something wrong with her
account.
So she printed out the email. She got online. She looked at
her account. There was nothing wrong. She went to the bank. The
bank teller looked at the account, said, I can't find anything
wrong. And she showed her the email. The bank teller called the
scammer's number on the email, talked for a minute, hung up the
phone, circled the number, handed it back to her and said, oh,
you need to call them to work it out.
I mean, they're just--I mean, I understand that banks have
a lot of turnover, and I know they are trying very hard.
Senator Warner. I've got to--let's go to--because want to--
--
Ms. Harris. I'm sorry.
Senator Warner. I want to try to get three questions in.
Ms. Lybarker. Yeah. Education and awareness is important
for consumers, but the businesses as well, when they are on
that front line where the consumer especially is coming in and
having that face-to-face communication, they are in a great
position to be able to talk to the consumer from that side of
things, try and get past that emotional component that was
talked about earlier, but then also they they know what red
flags are, right? We have some of those at the levels--at the
Federal level for identity theft, but it would great to have
some for the scam component, too.
Senator Warner. Well, I wonder as well, because, I mean,
the Larry's Law case in Virginia, the scammers were actually
based in Thailand. So there's even--you know, I'm chair of the
Intelligence Committee. I think there is coordination--we need
to have, you know, IC and law enforcement community involved.
I'm curious as well, as somebody who has focused a lot of
time on cybersecurity, you know, I think back to the OPM
breach, I think back to the Equifax breach, you know, more
recently the August announcement of the public data breach that
a lot of seniors' information--I think the breach was in April,
but didn't get reported until August.
Do we think that lax cybersecurity on some of these massive
data bases led to some of this activity? I believe--have we
seen any connection, Ms. Nofziger, from AARP part as well? Have
you seen?
Ms. Nofziger. Thank you for that. I mean, I certainly think
it's a possibility that all of our information is out there,
and that's one of the things that we try to tell people is that
our information is out there, and so this is what you can do to
be proactive to protect yourself. Put a freeze on your credit
report, check your credit report, do every proactive measure to
keep yourself safe, because every day goes by when one of us
gets a notification about a breach.
Senator Warner. But that puts the burden back on the
consumer. What I guess I'm--maybe I should go back to our
regulators are--like, if bad cybersecurity hygiene is leading
to ability for scammers to gain data that has personal
information about calling that vulnerable senior, you know, I
think we'd need to better connect the dots.
And, frankly, at some point you--this is where I am
thinking some of these areas, we need minimal cybersecurity
standards, because at the end of the day the victim, you know,
may be victimized by this effort, but they're not--my time--let
me get my last point in, Madam Chair, so I've got a question on
this.
AI, AI, AI--I think a lot of great upside on this. We've
got a hearing next week on how AI tools are potentially
manipulating our elections. But, boy oh boy, you talk about a
brand-new, open running field in scamming. I'm almost surprised
we have not seen more, but deep think technology literally gets
better not on an annual basis, on a monthly basis.
And I would hope that we could take a look at some of--I
would point out--if Senator Klobuchar was here she would make
the point--you know, when we haven't done anything at the
Federal level, States--and not kind of what you'd normally
think--a State like Texas has already taken this on on AI
manipulation of political ads. And if--this ought to be a place
where maybe we--I wouldn't often say we ought to be following
the Texas legislature, but this might be one where we take a
lesson.
Thank you for giving me the extra minute.
Senator Smith [presiding]. Thank you, Senator Warner.
Senator Van Hollen.
Senator Van Hollen. Thank you. Thank you, Madam Chair.
Thank all of you for your testimony. And all of us have stories
to tell about what's happening in each of our States, because
this of course has been a terrible sort of national phenomena,
the defrauding of Americans, these scams, and especially
targeting seniors.
According to the FBI's Annual Crime Report, almost 2,000
Marylanders over the age of 60 lost a combined $72 million due
to fraud in 2023, with the top five most common crime types
including Government impersonation, investment scams, and
romance schemes, among others. And I know this is a pattern
that you are seeing around the country.
You know, one of the challenges is that these scams have
gotten more sophisticated over time. I mean, we've been having
to deal with scams, obviously, throughout our history, but they
seem to be getting more sophisticated.
So, Ms. Nofziger, if you could just talk briefly about, you
know, what additional tools that we need to fight these more
sophisticated techniques on the--you know, being perpetrated by
the fraudsters.
Ms. Nofziger. Thank you for that question. I certainly
think data-sharing amongst all regulators and law enforcement
needs to increase, so we can share what is happening, and so we
can fight it. But I'll say, with the onset of--I heard AI
earlier. With the onset of what we're seeing in our communities
with the crypto ATM machines and that technology, that is
certainly changing the game of fraud, and so we really need to
work together to see how we can slow the funds going through
those cryptocurrency ATM machines.
I had a woman recently who spent 2 hours inserting $80,000
in cash into one of those crypto ATM machines, that the
employees at the store actually brought her a chair because she
looked tired. So when we talk about technology, that's
certainly something I would like to see.
Senator Van Hollen. And you sort of touched on the next
area that I wanted to investigate, and really welcome all of
your answers here, with respect to the use of crypto as part of
these schemes, because the FBI's Internet Crime Complaint
Center's Elder Fraud Report in 2023 highlights crypto as the
most common tool used by these illicit actors to scam
vulnerable people. And this is a worldwide phenomenon.
I had a constituent case where a senior from Rockville,
Maryland, fell victim to a scam on the Chinese app WeChat.
After several months of friendly interaction, this constituent
was conned into sending $300,000 in what he assumed was an
investment app focused on crypto investments.
Unfortunately, the funds were transferred into accounts
outside of American jurisdiction in Hong Kong. And despite them
being informed that this was obviously a scam by a Citibank
employee who said this has got all the markings of a scam, the
transaction was completed.
So how does the use of these tools, like cryptocurrency,
outside of the regular--regulated financial system, how is it
being used more and more by scam artists? And what can we be
doing about it? Maybe if we just quickly go down--down the
line. Thanks.
Ms. Nofziger. It's definitely being used. I mean, we
started hearing about cryptocurrency--ATMs and then
cryptocurrency investment fraud probably about 4 years ago. And
it doesn't matter your age or who you are. It's affecting
everyone and now it's coming in via text messages, and we're
seeing it online as well. So it is a big problem that we need
to really focus on.
Ms. Lybarker. At our office, we regulate non-depository
financial institutions, but money transmitters are regulated
through our State attorney general's office. And it's a model
law that would bring in these crypto ATMs, but it doesn't have
a component about the scam side of things.
We had heard--I think it was Connecticut that had a bill
that they were contemplating and may have even passed that
would allow a person who, if it was their first time utilizing
a crypto ATM, would be able to cancel that transaction within
48 hours, to try and give that kind of space for them to step
back from it and see whether or not they thought that it was a
scam.
So that's something that we've been talking to other State
regulators about.
Senator Van Hollen. Thank you.
Ms. Harris. And I would say that--that the holds could be
longer, both for banks--I mean, there is a little period where
consumers can try to get their money back if they transfer
money by wires. That doesn't exist for crypto and for most of
the peer payments. And even for gift cards, really, there is
nothing.
And, you know, we see the gift card companies put caps on
how many gift cards you can buy, but then they just go to
another store and buy more. And it's the same with crypto, for
that matter.
But I think we really need to have, like, baked-in consumer
protections that allow people who are scammed to get their
money back. And I think that these institutions may have to
have some skin in the game to give them the gumption to figure
out the tools to do it.
Senator Van Hollen. Thank you. That was very helpful. I'll
look into the Connecticut law and that kind of approach. Thank
you.
Senator Smith. Thank you, Senator Van Hollen. Senator
Warren.
Senator Warren. Thank you very much. And thank you for
holding this hearing today, and thank you all for being here.
So I want to ask about someone later in life, maybe someone
whose spouse passed away a few years ago, who has, you know,
recently started spending more time online, maybe a dating app,
they try to meet someone, they talk about food, they talk about
work, family, friends. It just feels good to have someone to be
able to interact with.
And for weeks, maybe even months, the subject of money
never comes up. And then one day the new online friend reveals
how much money they have just made in this amazing investment.
Now, our senior, very suspicious, not easily tricked, quite
reasonable person, they don't send a dime to the online
acquaintance. In fact, to reassure our senior, the only
acquaintance says, you know, you should set up your own trading
account and load your money directly into it. I certainly
wouldn't want any access to that.
And the online acquaintance says, all I'll do is just give
you some tips on good times to invest and the kind of
investments you want to make. That seems so safe to someone.
So, Ms. Nofziger, you lead the AARP's Victims Support Team.
Does this story sound familiar to you?
Ms. Nofziger. Yes. We hear this every day. This sounds like
a romance scam/cryptocurrency scam.
Senator Warren. Uh-huh. And this scam I assume starts
small. Maybe the scammer starts out saying invest $100, so the
senior sets up the account, deposits $100. And from what it
looks like on the website, within a day, there's $200 in the
account. Absolutely doubled their money in a day. So they load
another 200 in, and then 400 in, and it just keeps growing. Now
they've got $1,000 in this account, even though they've only
put $400 into it.
Then they get the message from the online friend, this is
the moment, this is the moment to go big, the investment is
about to go through the roof. So our senior withdraws money
from their retirement account, puts it in this great new
investment, and over a few months' time our senior has now
invested $300,000 on this website, and it shows them that the
$300,000 has ballooned to $3 million. Of course, the senior
doesn't know it yet, but the dashboard is entirely fake. There
is no $3 million. And, of course, the $300,000 has completely
disappeared.
So, Ms. Nofziger, when do the victims discover that they
have been defrauded?
Ms. Nofziger. It depends. I mean, sometimes they will try
to withdraw that money and they will say, oh, no, you have to
pay another 5,000, you know, penalty feel or taxes, and so the
victim thinks, oh, what's another 5,000 at this point? I
already have 3 million. Why not? So they will put that in.
And then that's when the doubt starts to seep in, but,
unfortunately, we have heard on the helpline that people don't
realize it until every single penny is gone.
Senator Warren. Right. And this is why I think it's so
important to underscore this. I'm all for being able to get
your money back in 48 hours, recognizing that is better than no
time at all. But we're talking about the money has disappeared
weeks earlier, sometimes maybe even months earlier.
And the story I have told is not just a hypothetical. This
is based on countless true stories, including one specifically
from a victim in Massachusetts. According to the FBI,
Massachusetts residents lost $85 million to romance or fake
investment scams last year alone. In the last 4 years,
consumers around the globe are estimated to have lost $75
billion.
So, Ms. Nofziger, once the crime has been reported, is law
enforcement able to get the money back for victims?
Ms. Nofziger. We certainly encourage every victim to report
to law enforcement, but law enforcement tells me it's very
difficult to claw that money back because usually it is sent on
a digital currency platform, and is also sent overseas. And, as
you said, oftentimes it's not reported in a timely manner, but
we still always encourage to report.
Senator Warren. So what more can the Federal Government do
here?
Ms. Nofziger. I--thank you. I think there is better
coordination, better data-sharing, and I think there is just
maybe more resources and education that we need to put into law
enforcement to understand how this money is being sent and to
understand it because this is such a new technology. I mean,
crypto is fairly new to a lot of people.
Senator Warren. So let me just make sure I'm understanding
your last point there. These happen using crypto, is that
right? And so are you suggesting that maybe better regulation
here would be useful?
Ms. Nofziger. I'm not sure if I'm suggesting that, but what
I'm saying is I think there is just a lot of misunderstanding
about what crypto is, where it's going, how it's being used. I
certainly know that a lot of the people who call our helpline
don't even know it, even though they are investing in it.
Senator Warren. OK. So we need to do more to shut down
these criminal gangs and to help the hardworking Americans who
are losing their life savings to these scams every day. And I
appreciate the work that all of you are doing. Thank you.
Thank you, Madam Chair.
Senator Smith. Thank you so much. Senator Helmy, welcome to
the Committee.
Senator Helmy. Thank you, Chair. I appreciate being here
and appreciate this being my first opportunity on the
Committee.
And to speak of the timeliness of this issue, literally,
this morning one of the first calls I took was from a consumer
protection advocate in one of our more populated counties
talking about this hearing and what she is seeing in seniors in
Hudson County, New Jersey.
So, to Ms. Nofziger, thank you for being here and for the
work you are doing, especially what your organization is doing
in New Jersey.
And to Mses. Lybarker and Harris, thank you for your
service and the ever-growing, unfortunately, importance of your
positions.
I would just pick up a thread that was left about this
importance to New Jersey. According to the FBI's most recent
IC3 Elder Report, New Jersians reported over $100 million in
losses to scams and frauds, predominantly among our elder
community, which is a huge sum to anybody, but, specifically,
as you talk about fixed income communities, it's a massive
amount.
Ms. Nofziger, if I can ask you, earlier this year there was
a massive data breach at the background company National Public
Data. In my opinion, rather underreported given that as many as
2.9 billion personal records may have been exposed with names,
addresses, Social Security numbers, and other personal
information.
As law enforcement works to determine the extent of the
breach, it's obviously imperative that as many Americans as
possible, especially our seniors, take steps to protect their
financial accounts and their credit. If I may ask, what is AARP
doing to inform our seniors of the breach and to inform them of
steps they can take to protect their credit?
I would ask you, additionally, what more can Congress or
State houses be doing to help as a part of the information
process, providing best practices to this community, and tools
for technical assistance for monitoring and reporting of
suspicious activity? Thank you.
Ms. Nofziger. Certainly. Thank you for that question.
Anytime there is a data breach, the calls on our fraud watch
network helpline spike, because this is very concerning to a
lot of Americans, and primarily older Americans, when they get
notification that their information is out there.
So we certainly work one on one with them and help them
through that process. We help them understand how to check your
credit report, freeze your credit.
And then AARP has 53 State offices across the country and
thousands of volunteers and 35 million members, so we certainly
take that opportunity to put articles and information in our
two publications, AARP Magazine and the Bulletin, to get the
word out.
But one of the things we want to do with these data
breaches is not scare people. We want to empower people to take
action. So anything that AARP can do with State and Federal
regulators to look at, you know, better protections for older
adults is certainly something that AARP would love to work with
people with.
Senator Helmy. Thank you. If I may stay with you and pick
up on a thread that Senator Warren left. You know, we have all
read these articles. I recently read an article in a New Jersey
publication about a 73-year-old woman who was scammed out of
about $50,000 by a stranger she had met on Facebook.
You know, unfortunately, as mentioned, many of the
investment scams start in a very similar fashion, whether it be
on Facebook, a comment on Twitter, other messaging apps, or
LinkedIn. You know, the common thread here is there was a
starting point for many of these that begins on messaging apps
or social media.
Again, staying with you, you know, the trend I think we're
all seeing, is there more that social media companies could be
doing to limit the ability of scammers to operate on their
platforms? And is there more oversight that Congress can be
providing? And how so?
Ms. Nofziger. Thank you for that. You know, I am here
really to represent the victims of fraud and the AARP helpline.
So, on the oversight part, I can certainly take that back to my
team. But what I will say is I think that this is actually
where we could utilize some of the AI for good and use some of
the AI to monitor a lot of those messaging apps, a lot of the
stuff on, you know, whether it's Facebook or Twitter, to pull
out the bad actors that are using the same scripts, because we
know that a lot of people and their fraudsters are meeting on
these social media apps.
Senator Helmy. Yeah. I think the point and the conclusion,
right, that we draw is to, again, Senator Warren's point, by
the time someone finds out, the money has been gone weeks, if
not months; the data has been gone weeks, if not months. In the
national public data issue, it was, you know, December '23 is
when a number of these attacks started, and it was April '24 I
think when folks started to know that the information was out
there.
And if we know that the starting point for most of these
engagements starts on a social media company, there's probably
an opportunity to try to get there at the starting point
instead of, you know--or I'll ask Mses. Lybarker and Harris on
the law enforcement piece, and if I can ask you both the same
question, you know, the unfortunate trend--and, again, this was
part of the conversation I had with an individual in Hudson
County today, it's tremendously difficult to catch these
perpetrators and bring any type of relief to the victims.
If I can ask both of you, what are the challenges that you
are seeing: (a) in reporting; and (b) when it is reported and
law enforcement being able to--to go after any of these
perpetrators and secure any relief for those impacted?
Ms. Lybarker. Sure. So I think the challenge that we had
talked about previously was reporting at all. A lot of folks
are ashamed. They are embarrassed. They have given their funds
up to a scammer, and so getting people to let us know and to
make us aware of what's going on out there is number one.
And then, on the law enforcement's perspective, because
it--it is outside of the country a lot of times, it makes it
difficult for them to do anything about it. Education is a
component of it that they try to engage in with the consumer,
but it's after the fact to that degree.
We're members of the FTC Sentinel data base where we report
scams and we report complaints as are several other law
enforcement agencies and folks at the local level and State,
the Federal level, so that it compiles all of this information
in hopes of being able to give the information to those
agencies that have the jurisdiction over the matter and to see
the patterns and practices and the trends to utilize those
multinational agreements that they have to try and get to where
these are originating from.
Ms. Harris. I just want to say that we--we face challenges
just getting some of these social media sites to take down scam
pages, right? So we had a--we had a person who had been through
a trauma and she was very traumatized. She lost money to a
scam. And because she was so desperate for money, they hit her
again and told her she had won a Government grant and those
don't exist.
And the person pretended to be from HHS, and she
encountered them on Facebook and she had sent lots of money,
and she was getting antsy and she wanted--she called our office
not to report a scam but to get help getting HHS to cough up
this grant.
And so we--my investigator looked at the page. It was--
there was a picture of--it was an actual Government employee,
you know, a woman in a suit, American flags behind her, and
this is how she was contacting people. But her--you know,
things people posted weren't public, right?
So we just went in on our page--you know, we're on a
Government page, right--and we clicked the fraud button, Report
Fraud, and we got back the same message that you would get if
you just reported somebody's objectionable content, right? So
nothing happened. The page didn't come down. So we found a
contact for the company, and we sent them the information, and
they said, page down. So then this woman came back to us later
and she was still in contact with other people in HHS on the
same social media site. And so we looked for the same--we just
did a search for the same photo, right? We're not AI. We're
just people looking up photo images, find, you know, 10 more
pages with that photo, and more sites also claiming to offer
HHS grants. And I just want to know, if there are algorithms
that predict everything in there that allow these sites, why
not aim them at fraud? And why not give, you know, consumers
and agencies a meaningful way to, you know, when they report
fraud, to have those things immediately taken down to avoid
harm to consumers?
Senator Smith. Thank you. Oh.
Senator Helmy. Thank you all.
Senator Smith. Thank you, Senator Helmy. If you would like
to wrap up, we're about 3 minutes over, so we need to wrap up.
Senator Helmy. Thank you, Chair. Thank you all. Thank you
all. I will just note Senator Van Hollen's leadership on some
issues on bringing more resources to States to help combat some
of this. Thank you, Chair, and thank you to Chairman Brown.
Very important hearing, and I appreciate being a part of it.
Thank you.
Senator Smith. Thank you so much.
Well, I want to thank all of our witnesses for being with
us today. For Senators who wish to submit questions for the
record, those questions are due 1 week from today, on Thursday,
September 19. The witnesses will have 45 days to respond to any
questions. So thank you very much to all of you for this great
hearing. And, with that, this hearing is adjourned.
[Whereupon, at 11:25 a.m., the hearing was adjourned.]
[Prepared statements and additional material supplied for
the record follow:]
PREPARED STATEMENT OF CHAIR SHERROD BROWN
I call this hearing to order and welcome our witnesses.
As we begin, I'd like to take this opportunity to welcome Senator
Helmy to the Banking and Housing Committee. We're excited for him to
join us, and I look forward to working together.
Welcome, Senator Helmy.
In the Old Testament, Jacob tricked Isaac and took Esau's
birthright. The American public first heard of Charles Ponzi in the
1920s.
So scams and frauds are nothing new.
But in the last few years, what used to be a trickle of scams--a
suspicious email now and then--has started to feel like a flood.
These scams can start with a simple text from what seems like just
a wrong number. Or they can be more devious--a call disguised to look
like it's from a friend or the local bank. The most manipulative ones
use artificial intelligence to disguise their voice or to mimic a
family member.
Once they've made contact, the scammers go to work.
They might claim to have something in common with you, or be a law
enforcement agent who needs help cracking a case. They might claim to
be interested in a romantic relationship, or even say a child or
grandchild is in trouble and needs help.
The scammers will use information found online or the dark web to
customize their scams to their target--an American who has worked hard
and saved for their retirement and their family's future.
The messages may be quick and urgent; or they may be intermittent,
with the conversation stretching on for months as the scammer builds a
relationship.
But they always end the same way: a con that drains as much of
someone's savings as possible.
Today, the data backs up what Americans have experienced--scams and
frauds have never been more pervasive. And criminals will use any means
they can to steal Americans' hard-earned money--wire fraud, peer-to-
peer platforms, check fraud.
In Ohio alone in 2023, more than $126 million dollars were reported
lost to fraud. $126 million.
The stories are heartbreaking:
A senior in Warren lost $127,000 lost to criminals posing as bank
employees.
A man in Mayfield Heights lost $80,000 to a fake investment scam.
One group running romance scams laundered nearly $12 million in
Central Ohio.
And it's happening across America. According to the Federal Trade
Commission, $10 billion were reported lost to fraud nationwide in
2023--an increase of over $1 billion from the previous year.
In 2023, consumers around the country lost at least $270 million
through wire fraud.
And those are just the scams that are reported. We know that many
people are reluctant to come forward and report their losses--
embarrassed to admit they were conned.
They shouldn't be. These scammers are professionals using all kind
of new technology to be harder and harder to detect, even if you try to
be vigilant. And these criminals want those they target to feel ashamed
and scared to come forward, so they can continue scamming others.
While these scams can--and do--affect Americans of all ages,
seniors face the greatest threat.
It's not just that they may be less familiar with some new
technologies--they're the biggest target because of their retirement
savings.
I have spent my career fighting for working Ohioans' pensions. But
fewer employers offer pensions, and more and more seniors have been
forced to rely on personal retirement savings accounts, built over a
lifetime of hard work.
These accounts are particularly enticing targets for scammers.
Americans over 60 represented more than half of the dollars lost to
fraud in Ohio in 2023.
Seniors are also especially reluctant to come forward. They may
blame themselves. They don't want to be seen as unable to manage their
own finances.
But no American, young or old, should ever blame themselves for
being defrauded by organized crime.
Scammers use new technologies to stay a step ahead of law
enforcement. They plan complex, sophisticated frauds that often stretch
out over months. They'll use fake websites that are impossible to
distinguish from real ones.
And worst of all, they exploit our best instincts--to trust one
another, to keep our families safe, to act quickly in an emergency.
No wonder their schemes all too often succeed.
We also know that many scams are now perpetrated by organized
networks overseas--some managed by Chinese criminal gangs using slave
labor.
These criminals have kidnapped thousands of people, locked them in
compounds in Southeast Asia, and forced them--under threat of torture--
to execute these scams against Americans.
It's organized crime, human trafficking, and modern-day slavery
come together with one sinister goal: to steal the nest eggs Americans
have worked their whole lives to build.
Individual Americans cannot fight this threat alone. And they
shouldn't have to.
Federal, State, and local law enforcement must work together, and
they must have the tools and resources they need to fight back.
But the private sector must also step up and do more to protect
people.
Many of these scams begin on social media. Tech companies must work
to prevent these scams from taking root on their platforms.
And when payment platforms fail to protect their customers from
scams, it's on them to reimburse the scammed consumers.
Payment platforms like Zelle, Venmo, and Cash App need to take
responsibility for keeping their customers' money safe and secure, and
reimburse more consumers who have been scammed on their platforms.
Big banks, with all their vast resources and tools at their
disposal, also need to do more to identify scams and stop consumers
from losing their life savings through wire fraud.
And with the rise in wire fraud, the Consumer Financial Protection
Bureau needs to use its authorities to ensure big banks follow the law
and protect consumers from wire fraud.
Wall Street firms and tech companies see the same scams over and
over. We know when something threatens their own profits, these big
banks spare no expense to try to take it down.
They ought to dedicate the same effort--I'd argue, a lot more
effort--into protecting the money that customers entrust to them.
Senators Hagerty and Tester have also introduced a bill to
strengthen protections against financial exploitation for seniors by
extending protections that exist for brokerage accounts to mutual
funds. I appreciate their attention to this issue and look forward to
working together.
In communities across the country, State and local officials have
been on the front lines in the fight against scams. Groups like AARP
have also mobilized to protect seniors and consumers. And we all know
that raising awareness about these types of scams helps stop them.
One leader in these efforts is Ohioan Sheryl Harris, Director of
the Cuyahoga County Department of Consumer Affairs.
Today, we're fortunate to be able to hear from her about our work
to protect Ohioans, and to hear from all our witnesses about the
evolving threat from scams and frauds.
I look forward to continuing to work with my colleagues to protect
workers' savings.
______
PREPARED STATEMENT OF SENATOR TIM SCOTT
Thank you, Mr. Chairman. Thank you for being here today--all the
witnesses.
First and foremost, I want to start today by thanking our law
enforcement partners at the State and the Federal level.
Every day, our law enforcement members work tirelessly to combat
crime -including financial crime--and to protect and defend victims in
every community around the country.
And that's exactly what the ``frauds'' and ``scams'' are. They are
crimes, and the criminals who commit these crimes should be punished
accordingly.
I also want to acknowledge our regulators, both at the State and
the Federal level, as well as our financial institutions and companies
that work tirelessly to combat and prevent criminal actors from taking
advantage of hardworking Americans.
This includes their critical work educating consumers on the
warning signs of popular frauds and scams.
The first step to stopping fraud is ensuring people are equipped
with the tools to recognize the very fraud that so many of us fall
victim to.
Criminals are inherently looking to benefit themselves without
regard for the wellbeing of others--and certainly without respect of
the law.
And, unfortunately, criminals often prey on our most vulnerable,
which of course would be our seniors.
Unfortunately, it seems almost daily that I hear a horrible story
of a hardworking Americans who worked their entire lives forced to come
out of retirement after having their savings wiped out by the scams.
My time as the Ranking Member of the Aging Committee allowed me to
learn a great deal more about these types of crimes.
In particular, the severe detriment they have on our Nation's
seniors.
That is why I advocated to holding hearings directly focusing on
these types of fraud and issued an annual ``Fraud Book'' to bring about
more awareness of these scams.
Today, I look forward to hearing from the panel of witnesses in
front of us today so that we can understand the new and emerging
solutions to this epidemic.
And it is my hope that this will not simply turn into a blame game
of who's responsible--whether it's financial industries whether it's
the scammers. We need all hands on deck to solve the problem that we
face today and to help protect more Americans from the challenges that
they have once their savings are gone.
I believe, frankly, that part of the solution starts with
education.
And through my time in Congress, I've continued to promote
financial education and financial literacy, because those as my top
priorities allows us to address the very challenges that so many
Americans face.
If we can help more Americans access financial education, we can
help them have the tools to both protect themselves, as well as achieve
financial freedom.
This is why I am so pleased to have Carri Grube Lybarker with us
today. She's the Administrator of the South Carolina Department of
Consumer Affairs before us today and she will share her perspective and
some of the things you've been doing to help combat these challenges.
I love this ``Ditch the Pitch.'' Sometimes the fewer words you use
the more you actually say--the more effective you are at communicating.
And I will say in a world that is unfortunately moving at a faster
pace, the longer we have to listen sometimes the less we actually
absorb. And so, ``Ditch the Pitch'' gives us at home in South Carolina
an opportunity to learn ways to reduce the impact of scams and frankly,
to detect them quickly, and perhaps avoid them all together.
Our Nation's seniors are not the only ones affected by these
crimes, and these criminals are looking for new targets every single
day.
Criminals are unfortunately smart and agile.
Just like we are working to use new technologies to drive
efficiencies and choice-criminals are using new technologies to pad
their own pockets at someone else's expense.
That's why we must adapt and continually work to innovate. We must
also work to educate and combat criminals using these same technologies
for ill gain.
And let's not forget what we heard in February when this Committee
examined check fraud, old technologies are also being used to exploit
in an increasing frequent manner.
I'll close like I started.
I am grateful for the work our law enforcement, our regulators, and
our financial institutions--what they're doing together to combat and
prevent financial crime.
And I am really proud of a lot of the good work being done to
better educate people of all ages on the frauds and scams they face.
Today, I hope we hear other ideas on how we can improve our
technology, education, and other approaches to stopping these crimes--
all the while making sure we are not incentivizing new, or additional,
criminal acts.
Thank you.
PREPARED STATEMENT OF AMY NOFZIGER
Director of Fraud Victim Support, AARP Fraud Watch Network
September 12, 2024
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
PREPARED STATEMENT OF CARRI GRUBE LYBARKER
Administrator and Consumer Advocate, South Carolina Department of
Consumer Affairs
September 12, 2024
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
PREPARED STATEMENT OF SHERYL HARRIS
Director, Cuyahoga County, Ohio, Department of Consumer Affairs
September 12, 2024
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Additional Material Supplied for the Record
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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