[Senate Report 115-141]
[From the U.S. Government Publishing Office]
Calendar No. 191
115th Congress } { Report
SENATE
1st Session } { 115-141
_______________________________________________________________________
SENIORS FRAUD PREVENTION ACT OF 2017
__________
R E P O R T
of the
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
on
S. 81
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
August 1, 2017.--Ordered to be printed
______
U.S. GOVERNMENT PUBLISHING OFFICE
69-010 WASHINGTON : 2017
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
one hundred fifteenth congress
first session
JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi BILL NELSON, Florida
ROY BLUNT, Missouri MARIA CANTWELL, Washington
TED CRUZ, Texas AMY KLOBUCHAR, Minnesota
DEB FISCHER, Nebraska RICHARD BLUMENTHAL, Connecticut
JERRY MORAN, Kansas BRIAN SCHATZ, Hawaii
DAN SULLIVAN, Alaska EDWARD J. MARKEY, Massachusetts
DEAN HELLER, Nevada CORY A. BOOKER, New Jersey
JAMES M. INHOFE, Oklahoma TOM UDALL, New Mexico
MIKE LEE, Utah GARY C. PETERS, Michigan
RON JOHNSON, Wisconsin TAMMY BALDWIN, Wisconsin
SHELLEY MOORE CAPITO, West TAMMY DUCKWORTH, Illinois
Virginia
CORY GARDNER, Colorado MARGARETWOODHASSAN,NewHampshire
TODD C. YOUNG, Indiana CATHERINE CORTEZ MASTO, Nevada
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
Calendar No. 191
115th Congress } { Report
SENATE
1st Session } { 115-141
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SENIORS FRAUD PREVENTION ACT OF 2017
_______
August 1, 2017.--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. 81]
[Including cost estimate of the Congressional Budget Office]
The Committee on Commerce, Science, and Transportation, to
which was referred the bill (S. 81) 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. 81, the Seniors Fraud Prevention Act of
2017, 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 also would require the FTC to work with
the Attorney General to establish procedures to log complaints
regarding fraud targeting seniors.
BACKGROUND AND NEEDS
Seniors, specifically 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 $12.76
billion\5\ annually.
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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.
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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 $448 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\
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\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.
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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.
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\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.
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The Commission also participates in the Elder Justice
Coordinating Council (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\
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\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.acl.gov/
sites/default/files/programs/2016-09/
Eight_Recommendations_for_Increased_Federal_Involvement.pdf.
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To address these issues, S. 81 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.
LEGISLATIVE HISTORY
Senator Klobuchar introduced this bill on January 10, 2017,
with Senators Collins and King as cosponsors. On January 24,
2017, the Committee met in open Executive Session and, by voice
vote, ordered S. 81 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. 81--Seniors Fraud Prevention Act of 2017
S. 81 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. 81 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. 81 would direct the FTC to
establish an office within the Bureau of Customer Protection to
address deceptive practices targeting seniors. The office would
monitor fraud activity, disseminate information regarding
common fraud schemes, maintain a website, and log complaints it
receives in the Consumer Sentinel Network, which is currently
operated by the FTC.
On the basis of an analysis of information from the FTC,
CBO estimates that the costs of implementing S. 81 would be
less than $500,000 annually because the agency is already
taking actions to monitor and disseminate information to
prevent fraud targeting seniors. That spending would be subject
to the availability of appropriated funds.
Enacting S. 81 would not affect direct spending or
revenues; therefore, pay-as-you-go procedures do not apply. CBO
estimates that enacting S. 81 would not increase net direct
spending or on-budget deficits in any of the four consecutive
10-year periods beginning in 2028.
S. 81 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
Director for Budget Analysis.
REGULATORY IMPACT
Because S. 81 would not create any new programs, the
legislation would have no additional regulatory impact, and
would result in no additional reporting requirements. The
legislation would 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 2017.''
Section 2. Office for the prevention of fraud targeting seniors
This section would establish an advisory 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 advisory office also would consult with the Attorney
General, the 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, or 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
through 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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