[Congressional Record Volume 145, Number 140 (Friday, October 15, 1999)]
[Senate]
[Pages S12698-S12699]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HARKIN (for himself, Mr. Bryan, Mr. Kerrey, and Mr. Dodd):
  S. 1740. A bill to protect consumers when private companies offer 
services or products that are provided free of charge by the Social 
Security Administration and the Department Of Health and Human 
services; to the Committee on Finance.


                social security consumer protection act

  Mr. HARKIN. Mr. President, today I am reintroducing legislation I 
originally proposed during the 105th Congress, the Social Security 
Consumer Protection Act. Quite simply, this bill is designed to protect 
constituents from what has been an all too common consumer scam.
  I introduced a similar bill during the prior Congress after an 
investigation by my staff found that unsuspecting consumers--from new 
parents to newlyweds to senior citizens--were falling prey to con 
artists who charged them for services that are available free of charge 
from the Social Security Administration (SSA) or the Department of 
Health and Human Services (HHS). Many of these schemes involve the use 
of materials and names which purposely mislead consumers into believing 
the scam artists are affiliated with the government.
  Companies operating under official sounding names like Federal 
Document Services, Federal Record Service Corporation, National Records 
Service, and U.S. Document Services are mailing information to 
thousands of Americans, scaring them into remitting a free to receive 
basic government services, such as a new Social Security number and 
card for a newborn or changing names upon marriage or divorce.
  One of my constituents, Deb Conlee of Fort Dodge, received one of 
these mailings. It sounded very official. It began, ``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 SSA. The solicitation goes on to say that she is 
required to provide SSA with any name change associated with her recent 
marriage and get a new Social Security card. It then urges her to send 
the company $14.75 to do this on her behalf. It includes the alarming 
statement, ``We urge you to do this immediately to help avoid possible 
problems where your Social Security benefits or joint income taxes 
might be questioned.''
  What the solicitation fails to mention, of course, is that these 
services are provided at no charge by SSA.
  After hearing Ms. Conlee's story, I contacted SSA and asked them to 
investigate these complaints. Then SSA Commissioner Shirley Chater 
responded that the services provided by these companies, ``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.''
  In its investigations, SSA received hundreds of complaints involving 
over 100 companies. The Postal Inspection Service has received hundreds 
of additional complaints. The Inspector General of SSA validated many 
of these complaints, including finding repeated cases of violations of 
Federal law. While it is already illegal for a company to imply any 
direct connection with a Federal agency, it is not illegal to charge 
for the very same services that are available at no cost to the 
Government.

[[Page S12699]]

  The Social Security Consumer Protection Act addresses this issue in a 
few important ways. First, the bill prohibits charging for services 
that are provided for free by SSA and HHS unless the following 
statement is prominently displayed on the first page of the 
solicitation in bold type, 16-point font, ``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 and the Department of Health and Human 
Services. You may wish to check the government section of your local 
phone book for the phone number of your local Social Security 
Administration or Department of Health and Human Services office for 
help in obtaining this service for no charge or you may choose to use 
our service for a fee.''
  Should a consumer decide to use the services of one of these 
companies, they are protected from inappropriate use of their personal 
information. This bill prohibits the sale, transfer or use of personal 
information obtained on consumers through such a solicitation without 
their consent on a separate authorization form that clearly and plainly 
explains how their personal information could be used.
  I am joined in introducing this important consumer legislation by 
Senators Bryan, Kerrey, and Dodd.
  I am also pleased that the Social Security Consumer Protection Act 
enjoys the support of such consumer organizations as the National 
Committee to Preserve Social Security and Medicare and the Consumer 
Federation of America.
  Mr. President, these scams must come to an end. Consumers deserve 
full disclosure. This legislation will go a long way toward ensuring 
consumers understand their rights when it comes to obtaining services 
from their government. I urge my colleagues to support it.
  I ask unanimous consent that a copy of the Social Security Consumer 
Protection Act be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1740

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Social Security Consumer 
     Protection Act''.

     SEC. 2. PROHIBITION OF CHARGING FOR SERVICES OR PRODUCTS THAT 
                   ARE PROVIDED WITHOUT CHARGE BY THE SOCIAL 
                   SECURITY ADMINISTRATION OR THE DEPARTMENT OF 
                   HEALTH AND HUMAN SERVICES AND PROHIBITION OF 
                   SALE, TRANSFER, OR USE OF CERTAIN INFORMATION.

       (a) In General.--Part A of title XI of the Social Security 
     Act (42 U.S.C. 1301 et seq.) is amended by inserting after 
     section 1140 the following:

     ``SEC. 1140A. PROHIBITION OF CHARGING FOR SERVICES OR 
                   PRODUCTS THAT ARE PROVIDED WITHOUT CHARGE BY 
                   THE SOCIAL SECURITY ADMINISTRATION OR THE 
                   DEPARTMENT OF HEALTH AND HUMAN SERVICES AND 
                   PROHIBITION OF SALE, TRANSFER, OR USE OF 
                   CERTAIN INFORMATION.

       ``(a) In General.--Except as provided in subsection (b), a 
     person shall not offer, for a fee, to assist an individual to 
     obtain a product or service that the person knows or should 
     know is provided for no fee by the Social Security 
     Administration or the Department of Health and Human 
     Services.
       ``(b) Exception.--A person may offer assistance for a fee 
     if, at the time the offer is made, the person provides, to 
     the individual receiving the assistance, a written notice on 
     the first page of the offer that clearly and prominently 
     contains the following phrase (printed in bold 16 point 
     type): `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. You may wish to check the government section of 
     your local phone book for the phone number of your local 
     Social Security Administration or Department of Health and 
     Human Services office for help in obtaining this service for 
     no charge or you may choose to use our service for a fee.'.
       ``(c) Sale, Transfer, or Use of Information.--
       ``(1) In general.--Except with prior, express, written 
     authorization from an individual, a person obtaining any 
     information regarding such individual in connection with an 
     offer of assistance under subsection (b) shall not--
       ``(A) sell or transfer such information; or
       ``(B) use such information for a purpose other than 
     providing such assistance.
       ``(2) Required form of authorization.--An authorization 
     under paragraph (1) shall be presented to the individual as a 
     separate document, clearly explaining the purpose and effect 
     of the authorization and the offer under subsection (a) shall 
     not be contingent on such authorization.
       ``(d) Imposition of Penalty.--
       ``(1) In general.--The Commissioner or the Secretary (as 
     applicable), pursuant to regulations, may impose a civil 
     monetary penalty against a person for a violation of 
     subsection (a) or (c) not to exceed--
       ``(A) except as provided in subparagraph (B), $5,000; or
       ``(B) in the case of a violation consisting of a broadcast 
     or telecast, $25,000.
       ``(2) Violations with respect to individual items.--
       ``(A) Offer of services.--In the case of an offer of 
     services consisting of pieces of mail, each piece of mail in 
     violation of this section shall be a separate violation.
       ``(B) Use of information.--In the case of a violation of 
     subsection (c), each sale, transfer, or use of information 
     with respect to an individual shall be a separate violation.
       ``(e) Recovery of Penalty.--
       ``(1) Procedure.--The provisions of section 1128A (other 
     than subsections (a), (b), (f), (h), (i) (other than 
     paragraph (7)), and (m) and the first sentence of subsection 
     (c)) shall apply to civil money penalties imposed under 
     subsection (d) in the same manner as the provisions apply to 
     a penalty or proceeding under section 1128A(a).
       ``(2) Compromise.--Penalties imposed against a person under 
     subsection (d) may be compromised by the Commissioner or the 
     Secretary (as applicable).
       ``(3) Venue.--Penalties imposed against a person under 
     subsection (d) may be recovered in a civil action in the name 
     of the United States brought in the district court of the 
     United States for the district in which the violation 
     occurred or where the person resides, has its principal 
     office, or may be found as determined by the Commissioner or 
     the Secretary (as applicable).
       ``(4) Deduction of penalty from benefits.--The amount of a 
     penalty imposed under this section may be deducted from any 
     sum then or later owing by the United States to the person 
     against whom the penalty has been imposed.
       ``(f) Use of Penalty Amounts Recovered.--
       ``(1) Costs of the office of the inspector general.--
     Amounts recovered under this section shall be made available 
     to the Commissioner and the Secretary (as applicable) to 
     reimburse costs of the applicable Office of the Inspector 
     General related to the enforcement of this section.
       ``(2) Excess amounts.--Amounts recovered under this 
     section, in excess of the amounts needed to reimburse the 
     Commissioner and the Secretary under paragraph (1), shall be 
     deposited as miscellaneous receipts of the Treasury of the 
     United States.
       ``(g) Enforcement.--The provisions of this section may be 
     enforced through the Office of the Inspector General of the 
     Social Security Administration or the Office of the Inspector 
     General of the Department of Health and Human Services (as 
     appropriate).''.
       (b) Conforming Amendment.--The table of sections for part A 
     of title XI of the Social Security Act is amended by 
     inserting after the item relating to section 1140 the 
     following:

``Sec. 1140A. Prohibition of charging for services or products that are 
              provided without charge by the Social Security 
              Administration or the Department of Health and Human 
              Services and prohibition of sale, transfer, or use of 
              certain information.''.

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