[Senate Report 114-370]
[From the U.S. Government Publishing Office]
Calendar No. 663
114th Congress } { Report
SENATE
2d Session } { 114-370
_______________________________________________________________________
SENIORS FRAUD PREVENTION ACT OF 2015
__________
R E P O R T
of the
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
on
S. 1490
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
November 15, 2016.--Ordered to be printed
______
U.S. GOVERNMENT PUBLISHING OFFICE
69-010 WASHINGTON : 2016
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
one hundred fourteenth congress
second session
JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi BILL NELSON, Florida
ROY BLUNT, Missouri MARIA CANTWELL, Washington
MARCO RUBIO, Florida CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire AMY KLOBUCHAR, Minnesota
TED CRUZ, Texas RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas ED MARKEY, Massachusetts
DAN SULLIVAN, Alaska CORY BOOKER, New Jersey
RON JOHNSON, Wisconsin TOM UDALL, New Mexico
DEAN HELLER, Nevada JOE MANCHIN, West Virginia
CORY GARDNER, Colorado GARY PETERS, Michigan
STEVE DAINES, Montana
Nick Rossi, Staff Director
Adrian Arnakis, Deputy Staff Director
Jason Van Beek, General Counsel
Kim Lipsky, Democratic Staff Director
Christopher Day, Democratic Deputy Staff Director
Clint Odom, Democratic General Counsel
Calendar No. 663
114th Congress } { Report
SENATE
2d Session } { 114-370
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SENIORS FRAUD PREVENTION ACT OF 2015
_______
November 15, 2016.--Ordered to be printed
_______
Mr. Thune, from the Committee on Commerce, Science, and Transportation,
submitted the following
R E P O R T
[To accompany S. 1490]
The Committee on Commerce, Science, and Transportation, to
which was referred the bill (S. 1490) to establish an advisory
office within the Bureau of Consumer Protection of the Federal
Trade Commission to prevent fraud targeting seniors, and for
other purposes, having considered the same, reports favorably
thereon without amendment and recommends that the bill do pass.
Purpose of the Bill
The purpose of S. 1490, the Seniors Fraud Prevention Act of
2015, is to establish an advisory office within the Bureau of
Consumer Protection of the Federal Trade Commission (FTC or
Commission) to advise the Commission on the prevention of fraud
targeting seniors by monitoring the market for specific fraud
schemes aimed at seniors and coordinating with other agencies
to provide consumer education materials to seniors and their
caregivers. The bill would also require the FTC to work with
the Attorney General to establish procedures to log complaints
regarding fraud targeting seniors.
Background and Needs
Seniors, those Americans aged 65 and older, number over 43
million and are the fastest growing segment of the
population.\1\ While older Americans are not necessarily
victimized by fraud at higher rates than younger consumers,\2\
their relative net worth makes them attractive targets to
fraudsters.\3\ Fraud directed toward seniors ranges from
Medicare and medical device fraud to ``grandparents schemes,''
in which fraudsters call a senior and pretend to be a
grandchild in need of wired prison bail, to imposter schemes
that claim to provide technical support to remedy non-existent
computer problems. Statistics measuring the financial cost of
fraud targeting seniors range from $2.9 billion\4\ to $12.46
billion\5\ annually.
The FTC, a civil enforcement agency, takes a multi-faceted
approach to combating fraud that includes both enforcement and
education efforts. In the past few years, it has brought cases
against fraudsters targeting seniors. One telemarketing scam
attempted to get seniors to divulge personal information by
claiming to be part of Medicare.\6\ The scammers used this
information to debit $399 or $488 from each of the victims. In
another case, fraudsters used robocalls to tell seniors that a
friend or family member had purchased a medical alert system
for them and that monthly monitoring fees would only be charged
once the system was installed and activated, but instead began
charging them immediately.\7\
In addition to these enforcement actions, the FTC has
developed a consumer education campaign called Pass It On,
which targets active, older adults. The goal of Pass It On is
to educate seniors about common fraud schemes so they can pass
on this information to their respective communities.\8\ Since
launching the campaign in July 2014, the FTC has received
requests for more than 250,000 copies of Pass It On from
organizations in 49 States. The FTC also partners with
organizations such as the American Association of Retired
Persons to provide education and counseling to seniors that
have been affected by fraud. Through this program, the FTC
refers consumers over the age of 60 that have called the FTC's
Consumer Response Center with complaints about fraud to peer
counselors that provide support to those that have been
targeted.
The Commission also participates in the Elder Justice
Coordinating Council, an organization composed of 12 Federal
agencies, which meets regularly to coordinate activities
related to elder abuse, neglect, and exploitation.\9\ Every 2
years, the Council provides a report to Congress with
recommendations on how best to address these abuses. The
Council's most recent report contained eight recommendations
for increased Federal involvement in addressing these issues,
including a recommendation that agencies develop a public
awareness campaign to assist in preventing elder abuse,
including fraud targeting older Americans.\10\
To address these issues, S. 1490 would establish a
permanent advisory office within the FTC's Bureau of Consumer
Protection to streamline efforts to prevent fraud targeting
seniors. This bill also would facilitate coordination between
various Federal agencies with jurisdiction over fraud to ensure
consumer education efforts are effective, contain accurate
information, and are consistent across the relevant agencies.
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\1\The U.S. Census Bureau projects the senior population in 2050 to
be 83.7 million, almost double the estimated population in 2012. The
Bureau also estimates that, by 2030, 20 percent of the U.S. population
will be over age 65, compared to 13 percent in 2010 and 9.8 percent in
1970. See Jennifer Ortman, Victoria Velkoff, & Howard Hogan; U.S.
Department of Commerce, U.S. Census Bureau, An Aging Nation: The Older
Population in the United States, May 2014, pp.1-3, at https://
www.census.gov/prod/2014pubs/p25-1140.pdf.
\2\The FTC's third consumer fraud survey found that the overall
victimization rate for seniors was significantly lower than for younger
consumers. FTC Bureau of Economics Staff Report, Consumer Fraud in the
U.S., 2011, pp. 56-59, Apr. 2013, at https://www.ftc.gov/reports/
consumer-fraud-united-states-2011-third-ftc-survey. But see, FBI Fraud
Target: Senior Citizens, available at https://www.fbi.gov/scams-safety/
fraud/seniors, (FBI estimates that older Americans are less likely to
report fraud because they are embarrassed, don't know who to report it
to, or don't know that they have been defrauded).
\3\In 2011, the net worth for households headed by seniors was
approximately $17.2 trillion, with a median net worth of $170,500. See
Census Bureau, Table 5, ``Mean Value of Assets for Households by Type
of Asset Owned and Selected Characteristics: 2011'' 2011, at http://
www.census.gov/people/wealth/files/Wealth_Tables_2011.xlsx.
\4\The Metlife Mature Market Institute, MetLife Study of Elder
Financial Abuse, Crimes of Occasion, Desperation, and Predation Against
America's Elders, June 2011, at http://www.metlife.com/assets/cao/mmi/
publications/studies/2011/mmi-elder-financial-abuse.pdf.
\5\TrueLink Report on Elder Financial Abuse 2015, January 2015, at
http://www.nasuad/files/True-Link-Report-On-Elder-Financial-Abuse.pdf.
\6\FTC v. Sun Bright Ventures LLC, No. 140CV-02153-JDW-EAJ (M.D.
Fla Oct. 2, 2014), at https://www.ftc.gov/enforcement/cases-
proceedings/132-3217/sun-bright-ventures-llc-gmy-llc.
\7\FTC v. Worldwide Information Services, Inc., No. 6:14-CV-8 ORC-
28DAB (M.D. Fla Jan. 13, 2014), at https://www.ftc.gov/enforcement/
cases-proceedings/132-3175/worldwide-info-services-inc.
\8\Pass It On materials, at https://www.ftc.gov/PassItOn. The
materials are free and in the public domain and hard copies may be
requested from https://www.ftc.gov/bulkorder.
\9\The Elder Justice Coordinating Council is chaired by the
Department of Health and Human Services and its membership includes the
Consumer Financial Protection Bureau, the Corporation for National and
Community Service, the Department of Housing and Urban Development, the
Department of Justice, the Department of Labor, the Department of
Transportation, the Veterans Administration, the FTC, the Securities
and Exchange Commission, the Social Security Administration, and the
U.S. Postal Inspection Service.
\10\U.S. Department of Health & Human Services, Eight (8)
Recommendations for Increased Federal Involvement In Addressing Elder
Abuse, Neglect, and Exploitation, May 2014, at http://www.aoa.acl.gov/
AoA_Programs/Elder_Rights/EJCC/docs/
Eight_Recommendations_for_Increased_Federal_Involvement.pdf.
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Legislative History
Senator Klobuchar introduced this bill on June 3, 2015,
with Senator Collins as an original cosponsor. The bill is also
cosponsored by Senators Ayotte, McCaskill, Schatz, and Shaheen.
On June 15, 2016, the Committee met in open Executive Session
and, by voice vote, ordered S. 1490 to be reported favorably
without amendment.
Estimated Costs
In accordance with paragraph 11(a) of rule XXVI of the
Standing Rules of the Senate and section 403 of the
Congressional Budget Act of 1974, the Committee provides the
following cost estimate, prepared by the Congressional Budget
Office:
S. 1490--Seniors Fraud Prevention Act of 2015
S. 1490 would direct the Federal Trade Commission (FTC) to
establish an advisory office to assist the commission with
preventing fraud that targets seniors. CBO estimates that
implementing S. 1490 would have no significant effect on the
federal budget.
Under current law, the FTC has the authority to issue rules
regarding unfair or deceptive acts or practices affecting
commerce. Within the FTC, the Bureau of Consumer Protection
investigates consumer complaints, develops rules, and educates
consumers about those practices. S. 1490 would direct the FTC
to establish an office within the Bureau of Consumer Protection
to address deceptive practices that target seniors. The office
would monitor fraud activity, disseminate information regarding
common fraud schemes, and maintain a website. The advisory
office also would log complaints received in the Consumer
Sentinel Network, which is currently operated by the FTC. On
the basis of information from the FTC, CBO estimates that the
costs of implementing S. 1490 would be less than $500,000
annually because the agency is already taking actions to
monitor and disseminate information to prevent fraud that
targets seniors. That spending would be subject to the
availability of appropriated funds.
Enacting S. 1490 would not affect direct spending or
revenues; therefore, pay-as-you-go procedures do not apply. CBO
estimates that enacting S. 1490 would not increase net direct
spending or on-budget deficits in any of the four consecutive
10-year periods beginning in 2027.
S. 1490 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of state, local, or tribal
governments.
The CBO staff contact for this estimate is Stephen Rabent.
The estimate was approved by H. Samuel Papenfuss, Deputy
Assistant Director for Budget Analysis.
Regulatory Impact
Because S. 1490 would not create any new programs, the
legislation would have no additional regulatory impact, and
would result in no additional reporting requirements. The
legislation will have no further effect on the number or types
of individuals and businesses regulated, the economic impact of
such regulation, the personal privacy of affected individuals,
or the paperwork required from such individuals and businesses.
Congressionally Directed Spending
In compliance with paragraph 4(b) of rule XLIV of the
Standing Rules of the Senate, the Committee provides that no
provisions contained in the bill, as reported, meet the
definition of congressionally directed spending items under the
rule.
Section-by-Section Analysis
Section 1. Short title.
This section would establish the bill's short title as the
``Seniors Fraud Prevention Act of 2015.''
Section 2. Office for the Prevention of Fraud Targeting Seniors.
This section would establish an office within the FTC's
Bureau of Consumer Protection that would advise the Commission
on the prevention of fraud targeting seniors.
The advisory office would be tasked with monitoring the
market for mail, television, internet, and robocall fraud
targeting seniors.
The office also would consult with the Attorney General,
Secretary of Health and Human Services, the Postmaster General,
the Chief Postal Inspector for the United States Postal
Inspection Service, and other relevant agencies to undertake
efforts to educate consumers, including seniors, their
families, and their caregivers, about fraud targeting older
Americans. This consumer outreach program would provide
information about the most common senior fraud schemes as well
as information on how to report senior fraud through the
national toll-free number or through the FTC's Consumer
Sentinel Network.
This section would require the Commission, in response to a
specific request, to provide publicly available information
about any enforcement actions it has taken against any
particular individual or entity. The advisory office also would
maintain a website providing information regarding the various
types of fraud targeting seniors.
This section also would require the Commission, through the
advisory office, and in consultation with the Attorney General,
to establish procedures to log and acknowledge complaints from
individuals who believe they have been victims of mail,
television, internet, telemarketing, and robocall fraud in the
Consumer Sentinel Network. These complaints would be made
immediately available to Federal, State and local law
enforcement authorities. In so doing, the Commission, acting
though the advisory office, would be required to consult with
the Attorney General to provide specific and general
information on fraud schemes to individuals and law enforcement
agencies.
This section would clarify, however, that the Commission,
through the advisory office, may implement the consumer
education program and complaint procedures described in this
section without the approval of the officials and agencies with
which it is required to consult.
The Commission would have 1 year after the date of
enactment to commence carrying out the bill's requirements.
Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, the Committee states that the
bill as reported would make no change to existing law.
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