[Congressional Record Volume 144, Number 140 (Thursday, October 8, 1998)]
[Senate]
[Pages S11983-S11984]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WYDEN:

[[Page S11983]]

  S. 2587. A bill to protect the public, especially seniors, against 
telemarketing fraud and telemarketing fraud over the Internet and to 
authorize an educational campaign to improve senior citizens' ability 
to protect themselves against telemarketing fraud over the Internet; to 
the Committee on Commerce, Science, and Transportation.


             telemarketing fraud and seniors protection act

  Mr. WYDEN. Mr. President, online consumer purchases are poised to 
explode to more than $300 billion early in the next Century. But the 
goldrush in cyberbuying is likely to carry along with it a boom in 
cyberfraud. Congress can help head-off this cybercrime by extending our 
current telemarketing laws to encompass fraud on the Net.
  In response to the staggering $40 billion consumers lose in telephone 
fraud each year, Congress earlier this summer passed the 1998 
Telemarketing Fraud Prevention Act. I strongly supported that effort. 
The new law builds upon the four federal laws enacted since the early 
1990s that deal directly with telemarketing fraud. The 1998 law 
stiffens penalties for telemarketing fraud by toughening the sentencing 
guidelines--especially for crimes against the elderly, requires 
criminal forfeiture to ensure the booty of telemarketing crime is not 
used to commit further fraud, mandates victim restitution to ensure 
victims are the first ones compensated, adds conspiracy language to the 
list of telemarketing fraud penalties so that prosecutors can find the 
masterminds behind the boiler rooms, and will help law enforcement zero 
in on quick-strike fraud operations by giving them the authority to 
move more quickly against suspected fraud.
  The 1998 law is a good step forward but it's not enough to deal with 
today's digital economy. As more Americans go online, cyberscams are 
bound to proliferate. The Congressional crackdown on telemarketing 
fraud will only encourage cyberscammers to migrate to the Net unless 
the law gets there first. That is the purpose of the legislation I am 
introducing today.
  The Telemarketing Fraud and Seniors Protection Act simply extends 
current law against telemarketing fraud to include the same crimes 
committed over the Internet. The approach expands the existing law 
applicable to mail, telephone, wire, and television fraud to fraud over 
the Internet, and its enforcement would follow the same division of 
labor there is today between the Federal Trade Commission and the 
Department of Justice. The bill would apply the same tough penalties 
that Congress enacted earlier this year to cyberscams. The growth of 
Internet telephony makes it more attractive for cyberscammers to set up 
shop offshore, beyond the reach of U.S. law. My bill would address this 
problem by allowing law enforcement to freeze the assets and deny entry 
to the United States of those convicted of cyberfraud.
  The bill takes special aim against those attempt to defraud one of 
our most vulnerable groups--our senior citizens. Seniors are the target 
for more than 50 percent of telemarketing fraud. Although telemarketers 
convicted of fraud face stiff penalties--a minimum of 5-10 years in 
jail and restitution payments to their victims, we also need to better 
educate and inform senior citizens on how to avoid becoming victims of 
telemarketing fraud in the first place, and how to assist law 
enforcement in catching the perpetrators.
  The legislation would also authorize the Administration on Aging, 
through its network of area agencies of aging, to conduct an outreach 
program to senior citizens on telemarketing fraud. Seniors would be 
advised against providing their credit card number, bank account or 
other personal information unless they had initiated the call 
unsolicited. They would also be informed of their consumer protection 
rights and any toll-free numbers and other resources to report 
suspected illegal telemarketing.
  Mr. President, the Federal Trade Commission is off to a good start 
against cyberscammers. Some of the operations the FTC has targeted are 
not companies at all, but merely websites that promise consumers 
everything from huge new consulting contracts to the elimination of bad 
credit reports. They may use scare tactics to frighten consumers into 
sending important personal financial information and hundreds of 
dollars for services the consumer will never see, or attempt to lure 
consumers with the promise of help them cash in on the Internet 
explosion. The FTC also has a strong operation going against junk e-
mailers. My legislation will complement and strengthen the FTC's effort 
to target telemarketing fraud over the Internet and especially when 
such fraud is aimed at seniors.
  I urge my colleagues to join me in this important legislation, and 
ask unanimous consent that a copy of the legislation be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2587

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

             TITLE I--TELEMARKETING FRAUD OVER THE INTERNET

     SECTION 101. EXTENSION OF CRIMINAL FRAUD STATUTE TO INTERNET.

       Section 1343 of title 18, United States Code, is amended 
     by----
       (1) striking ``or television communication'' and inserting 
     ``television communication or the Internet''; and
       (2) adding at the end thereof the following: ``For purposes 
     of this section, the term `Internet' means collectively the 
     myriad of computer and telecommunications facilities, 
     including equipment and operating software, which comprise 
     the interconnected world-wide network of networks that employ 
     the Transmission Control Protocol/Internet Protocol, or any 
     predecessor or successor protocols to such protocol, to 
     communicate information of all kinds by wire or radio.''.

     SEC. 102. FEDERAL TRADE COMMISSION SANCTIONS.

       The Federal Trade Commission shall initiate a rulemaking 
     proceeding to set forth the application of section 5 of the 
     Federal Trade Commission Act (15 U.S.C. 45) and other 
     statutory provisions within its jurisdiction to deceptive 
     acts or practices in or affecting the commerce of the United 
     States in connection with the promotion, advertisement, 
     offering for sale, or sale of goods or services through use 
     of the Internet, including the initiation, transmission, and 
     receipt of unsolicited commercial electronic mail. For 
     purposes of this section, the term `Internet' means 
     collectively the myriad of computer and telecommunications 
     facilities, including equipment and operating software, which 
     comprise the interconnected worldwide network of networks 
     that employ the Transmission Control Protocol/Internet 
     Protocol, or any predecessor or successor protocols to such 
     protocol, to communicate information of all kinds by wire or 
     radio.

            TITLE II--SPECIAL PROTECTION FOR SENIOR CITIZENS

     SEC. 201. FINDINGS.

       The Congress finds that----
       (1) telemarketing fraud costs consumers nearly 
     $40,000,000,000 each year;
       (2) senior citizens are often the target of telemarketing 
     fraud;
       (3) fraudulent telemarketers compile into ``mooch lists'' 
     the names of potentially vulnerable consumers;
       (4) according to the American Association of Retired 
     Persons, 56 percent of the names on ``mooch lists'' are 
     individuals age 50 or older;
       (5) the Department of Justice has undertaken successful 
     investigations and prosecutions of telemarketing fraud 
     through various operations, including ``Operation 
     Disconnect'', ``Operation Senior Sentinel'', and ``Operation 
     Upload'';
       (6) the Federal Bureau of Investigation has helped provide 
     resources to assist organizations such as the American 
     Association of Retired Persons to operate outreach programs 
     designed to warn senior citizens whose names appear on 
     confiscated ``mooch lists'';
       (7) the Administration on Aging was formed, in part, to 
     provide senior citizens with the resources, information, and 
     assistance their special circumstances require;
       (8) the Administration on Aging has a system in place to 
     effectively inform senior citizens of the dangers of 
     telemarketing fraud; and
       (9) senior citizens need to be warned of the dangers of 
     telemarketing fraud and fraud over the Internet before they 
     become victims.

     SEC. 202. PURPOSE.

       It is the purpose of this title through education and 
     outreach to protect senior citizens from the dangers of 
     telemarketing fraud and fraud over the Internet and to 
     facilitate the investigation and prosecution of fraudulent 
     telemarketers.

     SEC. 203. DISSEMINATION OF INFORMATION.

       (a) In General.--The Secretary of Health and Human 
     Services, acting through the Assistant Secretary for Aging, 
     shall publicly disseminate in each State information designed 
     to educate senior citizens and raise awareness about the 
     dangers of telemarketing fraud and fraud over the Internet.
       (b) Information.--In carrying out subsection (a), the 
     Secretary shall----
       (1) inform senior citizens of the prevalence of 
     telemarketing fraud and fraud over the Internet targeted 
     against them;

[[Page S11984]]

       (2) inform senior citizens of how telemarketing fraud and 
     fraud over the Internet works;
       (3) inform senior citizens of how to identify telemarketing 
     fraud and fraud over the Internet;
       (4) inform senior citizens of how to protect themselves 
     against telemarketing fraud and fraud over the Internet, 
     including an explanation of the dangers of providing bank 
     account, credit card, or other financial or personal 
     information over the telephone to unsolicited callers;
       (5) inform senior citizens of how to report suspected 
     attempts at telemarketing fraud and fraud over the Internet;
       (6) inform senior citizens of their consumer protection 
     rights under Federal law; and
       (7) provide such other information as the Secretary 
     considers necessary to protect senior citizens against 
     fraudulent telemarketing over the Internet.
       (c) Means of Dissemination.--The Secretary shall determine 
     the means to disseminate information under this section. In 
     making such determination, the Secretary shall consider----
       (1) public service announcements;
       (2) a printed manual or pamphlet;
       (3) an Internet website; and
       (4) telephone outreach to individuals whose names appear on 
     ``mooch lists'' confiscated from fraudulent telemarketers.
       (d) Priority.--In disseminating information under this 
     section, the Secretary shall give priority to areas with high 
     concentrations of senior citizens.

     SEC. 204. AUTHORITY TO ACCEPT GIFTS.

       The Secretary may accept, use, and dispose of unconditional 
     gifts, bequests, or devises of services or property, both 
     real and personal, in order to carry out this title.

     SEC. 205. DEFINITION.

       For purposes of this title, the term ``State'' includes the 
     District of Columbia, the Commonwealth of Puerto Rico, Guam, 
     the Virgin Islands, American Samoa, and the Commonwealth of 
     the Northern Mariana Islands.
                                 ______