[Congressional Record Volume 143, Number 80 (Tuesday, June 10, 1997)]
[Senate]
[Pages S5456-S5457]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HARKIN (for himself, Mr. Hutchinson, Mr. Reid, Mr. Bryan 
        and Mr. Rockefeller):
  S. 868. A bill to amend the Social Security Act to prohibit persons 
from charging for services or products that the Social Security 
Administration and Department of Health and Human Services provide 
without charge; to the Committee on Finance.


              the Social Security Consumer Protections Act

  Mr. HARKIN. Mr. President. Today, I am introducing, on behalf of 
myself,

[[Page S5457]]

Senators Hutchinson, Reid, Bryan, and Rockefeller, the Social Security 
Consumer Protection Act. This is a simple, commonsense legislation that 
will arm consumers with the information they need to protect themselves 
from a growing type of consumer scam.
  Several years ago Congress took an important step toward stamping out 
frauds against older Americans. We passed a law making it illegal for 
companies to prey upon senior citizens and others by misrepresenting an 
affiliation with Social Security or Medicare. After some delay, the 
Social Security inspector general has begun to enforce this important 
new consumer protection law. However, we are finding that many scam 
artists are squirming through a loophole in the law that allows them to 
charge unwitting consumers for services that are available free of 
charge from Social Security or Medicare.
  A recent investigation by my staff found that unsuspecting 
consumers--from new parents to senior citizens--are falling prey to con 
artists charging them for services that are available free of charge 
from the Social Security Administration. Many of the schemes involve 
use of materials and names which mislead consumers into believing that 
the scam artists are affiliated with the federal government.
  Companies operating under official sounding names like Federal 
Document Services, Federal Record Service Corp., National Records 
Service, and U.S. Document Services are mailing information to 
thousands of unsuspecting Americans, including many Iowans. These 
companies are scaring people into remitting a fee to receive basic 
Social Security benefits and eligibility information such as a new 
Social Security number and card for a baby and changing names upon 
marriage or divorce.
  We began to look into this problem based on a number of complaints 
from Iowans who had received these deceptive mailings. One example was 
sent to me by Deb Conlee of Fort Dodge. She received a mailing from a 
company called Document Service. The official looking letter starts: 
``Read Carefully: Important Facts about your Social Security Card. The 
response envelope is stamped ``SSA-7701'' giving the impression that it 
is connected with the Social Security Administration. The solicitation 
goes on to say that she is required to provide Social Security with any 
name change associated with her recent marriage and get a new Social 
Security card. It then urges her to send them $14.75 to do this. It 
says, ``We urge you to do this immediately to help avoid possible 
problems where your Social Security benefits or joint income taxes 
might be questioned.''
  Ms. Conlee paid $60 to this company and was furious when she learned 
that she could have gotten the same services free of charge from Social 
Security.
  Last year I asked Social Security Commissioner Shirley Chater to 
investigate the complaints of Iowans and those of consumers like her. 
She responded that the services provided by Document Service ``are 
completely unnecessary. Not only do they fail to produce any savings of 
time or effort for the customer, they also tend to delay issuance of 
the new Social Security card.'' While it is now illegal for a company 
to imply any direct connection with Social Security or Medicare in 
mailings, it is not illegal to charge for the very same services that 
are available at no cost from the government.
  So while Congress has acted to try and stop scam artists from trying 
to fool people into thinking their business is somehow affiliated with 
Social Security, Medicare, or some other government agency, many are 
skirting around the edges of this law and are conning consumers into 
paying for services that they can get free of charge. Nowhere in any of 
the mailings from these outfits that I have reviewed is there any 
mention that the services they offer are in fact available to consumers 
at no cost from the government.
  The Social Security Consumer Protection Act would require that any 
such solicitation prominently display the following consumer alert: 
``IMPORTANT PUBLIC DISCLOSURE: The product or service described here 
and assistance to obtain the product or service is available free of 
charge from the Social Security Administration or the Department of 
Health and Human Services.'' Armed with this information, consumers 
would be able to make informed decisions about where to obtain the 
service they need or want. Companies found to be in violation of this 
simple requirement would face fines.
  Our legislation would not stop the provision of services by private 
companies. Rather, it would simply make sure that consumers are fully 
informed, so that they can make an informed choice about where and how 
they prefer to receive certain services.
  These scams must be put to an end. A simple change in the law would 
go a long way toward stopping them. The bill we are introducing today 
would make such a change without imposing an undue burden on legitimate 
businesses or restricting consumer freedom of choice.
  Mr. President, this legislation has been endorsed by the National 
Committee to Preserve Social Security and Medicare. The National 
Committee is an effective and aggressive advocate of the rights of 
older Americans. I am pleased to have their endorsement and ask 
unanimous consent to include a copy of their letter of support be 
printed in the Record.
  I urge my colleagues to review this bill and to work with us to 
ensure its prompt approval.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                    National Committee to Preserve


                                 Social Security and Medicare,

                                      Washington, DC, May 8, 1997.
     Hon. Tom Harkin,
     U.S. Senate,
     Washington, DC.
       Dear Senator Harkin: On behalf of the 5.5 million members 
     and supporters of the National Committee to Preserve Social 
     Security and Medicare, I am pleased to offer our endorsement 
     of your legislation, the Social Security Consumer Protection 
     Act.
       Your legislation would require that any business which 
     solicits direct payment for services which the Social 
     Security Administration provides free of charge must include 
     a clear and prominent written disclaimer. Your bill would 
     also impose new civil and criminal penalties for failure to 
     comply with its provisions. A growing number of businesses 
     have emerged across the country which, for a direct fee, 
     assist individuals who seek to change their names, social 
     security numbers, or obtain other information relative to 
     their work record. Unfortunately, some of these enterprises 
     do not adequately inform would be consumers that they are not 
     affiliated with the federal government, or that such services 
     are provided free of charge by the government. As a 
     consequence, some individuals may be led to believe that they 
     must pay the fee to obtain these services.
       We appreciate your leadership on this important matter. 
     People should not be coerced to pay twice for services which 
     are already provided with their hard earned tax dollars.
           Sincerely,
                                      Martha A McSteen, President.
                                 ______