[Senate Report 116-182]
[From the U.S. Government Publishing Office]
Calendar No. 393
116th Congress } { Report
SENATE
1st Session } { 116-182
_______________________________________________________________________
STOP SENIOR SCAMS ACT
__________
R E P O R T
of the
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
on
S. 149
December 19, 2019.--Ordered to be printed
______
U.S. GOVERNMENT PUBLISHING OFFICE
99-010 WASHINGTON : 2019
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
one hundred sixteenth congress
first session
ROGER F. WICKER, Mississippi, Chairman
JOHN THUNE, South Dakota MARIA CANTWELL, Washington
ROY BLUNT, Missouri AMY KLOBUCHAR, Minnesota
TED CRUZ, Texas RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas EDWARD J. MARKEY, Massachusetts
DAN SULLIVAN, Alaska TOM UDALL, New Mexico
CORY GARDNER, Colorado GARY C. PETERS, Michigan
MARSHA BLACKBURN, Tennessee TAMMY BALDWIN, Wisconsin
SHELLEY MOORE CAPITO, West Virginia TAMMY DUCKWORTH, Illinois
MIKE LEE, Utah JON TESTER, Montana
RON JOHNSON, Wisconsin KYRSTEN SINEMA, Arizona
TODD C. YOUNG, Indiana JACKY ROSEN, Nevada
RICK SCOTT, Florida
John Keast, Staff Director
David Strickland, Minority Staff Director
Calendar No. 393
116th Congress } { Report
SENATE
1st Session } { 116-182
======================================================================
STOP SENIOR SCAMS ACT
_______
December 19, 2019.--Ordered to be printed
_______
Mr. Wicker, from the Committee on Commerce, Science, and
Transportation, submitted the following
R E P O R T
[To accompany S. 149]
[Including cost estimate of the Congressional Budget Office]
The Committee on Commerce, Science, and Transportation, to
which was referred the bill (S. 149) to establish a Senior
Scams Prevention Advisory Council, having considered the same,
reports favorably thereon with an amendment (in the nature of a
substitute) and recommends that the bill (as amended) do pass.
Purpose of the Bill
S. 149 would establish a Federal advisory group called the
Senior Scams Prevention Advisory Council (Advisory Council)
that would charge the Federal Trade Commission (FTC) with
bringing together relevant government officials, industry
representatives, and advocates to collect and develop
educational materials for retailers, financial institutions,
and wire-transfer companies to use in preventing scams that
affect seniors.
Background and Needs
Seniors, aged 65 years and older, number over 43 million
and are the fastest growing segment of the U.S. population.\1\
The Federal Bureau of Investigation (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.\2\ The average higher net worth of
older Americans makes them attractive targets for criminals.\3\
Fraud aimed at seniors ranges from Medicare medical device
fraud, where the elderly are prescribed unneeded devices, to
grandparent schemes, where fraudsters call a senior and pretend
to be their grandchild in need of wired emergency funds to bail
them out of jail or some other dire situation.\4\ Statistics
measuring the financial cost of fraud targeting seniors range
from $2.9 billion to $12.46 billion.\5\
---------------------------------------------------------------------------
\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. Jennifer Ortman, Victoria Velkoff, and Howard Hogan, An Aging
Nation: The Older Population in the United States, U.S. Department of
Commerce, Census Bureau, 2014, P25-1140 (https://www.census.gov/
content/dam/Census/library/publications/2014/demo/p25-1140.pdf)
(accessed September 4, 2019).
\2\``Common Fraud Schemes: Fraud Against Seniors,'' Scams and
Safety, U.S. Department of Justice, FBI (https://www.fbi.gov/scams-and-
safety/common-fraud-schemes/seniors) (accessed September 4, 2019).
\3\In 2015, the median net worth for households headed by seniors
was approximately $201,500. (The cited table has been moved or is no
longer available on the U.S. Census Bureau's website.) ``Wealth, Asset
Ownership, & Debt of Households: 2015,'' Explore Data, Tables, Income
and Poverty, U.S. Department of Commerce, Census Bureau (https://
www.census.gov/
programs-surveys/demo/tables/wealth/2015/wealth-asset-ownership/
wealth_tables_cy2015.xlsx) (accessed June 28, 2019).
\4\Stacey Colino, ``Don't Fall Victim to the Grandparents Scam,''
Scams and Fraud,
AARP, April 18, 2018 (https://www.aarp.org/money/scams-fraud/info-2018/
grandparent-scam-
scenarios.html).
\5\True Link Financial Services. ``The True Link Report on Elder
Financial Abuse 2015.'' San Francisco, CA: True link Financial
Advisors, 2015.
---------------------------------------------------------------------------
In the past few years fraudsters have begun to increasingly
request that payment come in the form of gift or money reload
cards, specifically by requiring that the senior victim provide
the fraudster with the personal identification number (PIN) off
the back of the gift or money reload card.\6\ By obtaining the
PIN, scammers can immediately get the money that has been
loaded onto the card.
---------------------------------------------------------------------------
\6\Emma Fletcher, ``Scammers increasingly demand payment by gift
card,'' Enforcement, Data and Visualizations, FTC, October 16, 2018
(https://www.ftc.gov/news-events/blogs/data-
spotlight/2018/10/scammers-increasingly-demand-payment-gift-card).
---------------------------------------------------------------------------
The FTC has taken steps to research and create a report on
the amount of losses attributed to this type of scam, finding
there were $40 million in losses through gift and money reload
card scams in 2017.\7\ Specifically, the FTC noted that
fraudsters are directing their victims to purchase gift or
money reload cards from well-known retailers like Walmart,
Target, Walgreens, and Apple iTunes.\8\
---------------------------------------------------------------------------
\7\Id. FTC, Consumer Sentinel Network Data Book 2017 (https://
www.ftc.gov/system/files/
documents/reports/consumer-sentinel-network-data-book-2017/
consumer_sentinel_data_book_
2017.pdf) (accessed September 4, 2019).
\8\Tamara Lytle, ``Give Gift Cards to Friends and Family--Not
Fraudsters,'' AARP, November 7, 2019 (http:///www.aarp.org/money/scams-
fraud/info-2019/prevent-gift-card-fraud.html) (accessed December 12,
2019).
---------------------------------------------------------------------------
Some companies have begun to take measures to prevent gift
or money reload card scams on seniors and others. For example,
Walmart has put policies in place to help guard against this
type of fraud by training store associates to be aware of the
ongoing scam.\9\
---------------------------------------------------------------------------
\9\Julie Watts, ``Retailers' Efforts to Stop Gift Card Scams Often
Fall Short,'' News, Consumer, CBS San Francisco, April 29, 2018 (http:/
/sanfrancisco.cbslocal.com/2018/04/29/could-stores-gift-card-imposter-
scams/).
---------------------------------------------------------------------------
The FTC has an ongoing consumer education campaign called
Pass It On, an initiative to educate seniors and organizations
about common fraud schemes.\10\ Pass It On helps seniors avoid
common scams by encouraging older adults to talk to their
family, friends, and neighbors about fraudulent schemes.\11\
Since launching Pass It On in July 2014, the FTC has received
requests for more than 250,000 copies of the materials from
organizations in 49 States.
---------------------------------------------------------------------------
\10\FTC, ``Pass It On,'' Consumer Information (https://www.ftc.gov/
PassItOn) (accessed September 4, 2019).
\11\FTC, ``Pass It On: New FTC Education Campaign Encourages Older
Consumers to Share Their Knowledge to Help Fight Fraud,'' News and
Events, Bureau of Consumer Protection, February 25, 2015 (https://
www.ftc.gov/news-events/press-releases/2014/09/pass-it-new-ftc-
education-campaign-encourages-older-consumers).
---------------------------------------------------------------------------
Additionally, the FTC partners with organizations such as
the AARP 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 who have called the FTC's
Consumer Response Center with complaints about fraud, to peer
counselors that provide support to those who have been
targeted.
The FTC also participates in the Elder Justice Coordinating
Council (Council), an organization composed of 12 Federal
agencies that meet regularly to coordinate activities related
to elder abuse, neglect, and exploitation.\12\ Every 2 years,
the Council provides a report to Congress with recommendations
on how to best 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 public awareness campaigns
to assist in preventing elder abuse, including fraud targeting
older Americans.\13\
---------------------------------------------------------------------------
\12\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 Federal Trade Commission, the Social Security
Administration, the Department of Agriculture, the Department of
Housing and Urban Development, the Department of the Interior, the
Department of Justice, the Department of Labor, the Department of the
Treasury, the Department of Veterans Affairs, the Postal Inspection
Service, and the Securities and Exchange Commission. See Elder Justice
Coordinating Council Membership List. Elder Justice Coordinating
Council, Membership List (Administration for Community Living) (https:/
/acl.gov/sites/default/files/programs/2019-03/
3.%20EJCC_Member_List.docx) (accessed September 4, 2019).
\13\Elder Justice Coordinating Council, Eight (8) Recommendations
for Increased Federal Involvement in Addressing Elder Abuse, Neglect,
and Exploitation (Administration for Community Living, 2014) (https://
acl.gov/sites/default/files/programs/2016-09/Eight_Recommendations_
for_Increased_Federal_Involvement.pdf) (accessed May 2014).
---------------------------------------------------------------------------
Summary of Provisions
S. 149 would establish a Senior Scams Prevention Advisory
Council (Advisory Council). The membership of the Advisory
Council would include representatives of the FTC, the
Department of the Treasury, the Attorney General, the Consumer
Financial Protection Bureau, industry sectors including retail,
telecommunications, and financial services, consumer and senior
advocacy groups, and other interested entities. The Advisory
Council would be tasked with studying existing and creating new
educational materials to guide businesses and employees in
identifying and preventing scams that effect seniors. The
Chairman of the FTC would make such materials publicly
available and encourage their use and distribution.
Legislative History
S. 149 was introduced on January 16, 2019, by Senator Casey
(for himself and Senator Moran) and was referred to the
Committee on Commerce, Science, and Transportation of the
Senate. Senator Tester is an additional cosponsor. On July 10,
2019, the Committee met in open Executive Session and, by voice
vote, ordered the bill reported favorably with an amendment (in
the nature of a substitute).
In the 115th Congress, a substantially similar bill, S.
3522, the Senior Scams Prevention Act, was introduced on
September 27, 2018, by Senator Casey (for himself and Senator
Moran) and was referred to the Committee on Commerce, Science,
and Transportation of the Senate. No action was taken on S.
3522 by the Committee.
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. 149 would establish an interagency advisory group, led
by the Federal Trade Commission (FTC), to study strategies to
prevent financial retailers, financial services companies, and
wire transfer companies from perpetrating fraud on senior
citizens. The group would consult with industry leaders, trade
associations, and nonprofit organizations to identify best
practices and create model materials that industry and
government agencies could use to decrease such fraud. The FTC
would report to the Congress each year on the group's
activities. The advisory group would disband five years after
enactment.
Using information from some of the affected agencies, CBO
estimates that convening the advisory group would cost $1
million over the 2019-2024 period. Such spending would be
subject to the availability of appropriated funds and would
cover administrative costs incurred by member agencies--
including the FTC, the Department of the Treasury, the
Financial Crimes Enforcement Network, and the Department of
Justice--that are funded through discretionary appropriations.
Enacting the bill would increase direct spending by the
Consumer Financial Protection Bureau (CFPB) and the Federal
Deposit Insurance Corporation (FDIC) and also would reduce
revenues from the Federal Reserve.
Using information from those agencies, CBO estimates the
following budgetary effects:
The CFBP would spend less than $500,000 over
five years to participate in the advisory group,
Net spending by the FDCI would be negligible
because the FDIC is authorized to collect premiums from
the financial institutions it regulates to offset its
costs, and
Costs incurred by the Federal Reserve would
reduce remittances to the Treasury, which are recorded
in the budget at revenues, by less than $500,000 over
the 2020-2024 period.
The CBO staff contact for this estimate is David Hughes.
The estimate was reviewed by H. Samuel Papenfuss, Deputy
Assistant Director for Budget Analysis.
Regulatory Impact Statement
In accordance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee provides the
following evaluation of the regulatory impact of the
legislation, as reported:
number of persons covered
The bill does not authorize any new regulations and would
not subject any individuals or businesses to new regulations.
economic impact
S. 149, as reported, is not expected to have a negative
economic impact.
privacy
The reported bill would have no impact on the personal
privacy of individuals.
paperwork
This bill would require the FTC to release a report with
materials and recommendations made by the advisory council to
reduce scams targeted against seniors and to also release any
gathered information not included in the report.
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 provide that the bill may be cited as
the ``Stop Senior Scams Act''.
Section 2. Senior Scams Prevention Advisory Group
This section would establish the Senior Scams Prevention
Advisory Group (Advisory Group) composed of: the Chairman of
the FTC, the Secretary of Treasury, the Attorney General, the
Director of the Bureau of Consumer Financial Protection, a
member of the Board of Governors of the Federal Reserve System,
a prudential regulator (as defined in 12 U.S.C. 5481), the
Director of the Financial Crimes Enforcement Network, and any
other agency or entity as determined by the Chairman of the
FTC.
Additionally, the Chairman of the FTC is required to select
representatives from the following: (1) retail, (2) gift card,
(3) telecommunications, (4) wire-transfer services, (5) senior
peer advocates, (6) consumer advocacy organizations, (7)
financial services, (8) and prepaid cards. The Chairman of the
FTC would also have the authority to appoint any other Federal,
State, or local agency, industry representative, consumer
advocate, or entity, as appropriate.
This section also would require the Advisory Group to do
the following: (1) collect information on the existence and use
of such materials; (2) examine ways that retailers, financial
institutions, and wire-transfer companies can better educate
the public on senior scams; (3) and create model materials,
best practices guidance, and recommendations for these
businesses to help protect seniors from scams.
The bill also requires the FTC to make such guidance and
model materials publicly available. Under the bill, the
advisory group would expire after 5 years.
Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
material is printed in italic, existing law in which no change
is proposed is shown in roman):
ELDER ABUSE PREVENTION AND PROSECUTION ACT
[34 U.S.C. 21711(c)(2)]
TITLE I--SUPPORTING FEDERAL CASES INVOLVING ELDER JUSTICE
SEC. 101. SUPPORTING FEDERAL CASES INVOLVING ELDER JUSTICE.
(a) * * *
(c) Federal Trade Commission.--
(1) Federal trade commission elder justice
coordinator.--Not later than 60 days after the date of
enactment of this Act, the Chairman of the Federal
Trade Commission shall designate within the Bureau of
Consumer Protection of the Federal Trade Commission an
Elder Justice Coordinator who, in addition to any other
responsibilities, shall be responsible for--
(A) coordinating and supporting the
enforcement and consumer education efforts and
policy activities of the Federal Trade
Commission on elder justice issues; and
(B) serving as, or ensuring the availability
of, a central point of contact for individuals,
units of local government, States, and other
Federal agencies on matters relating to the
enforcement and consumer education efforts and
policy activities of the Federal Trade
Commission on elder justice issues.
(2) Reports to congress.--Not later than 1 year after
the date of enactment of this Act, and once every year
thereafter, the Chairman of the Federal Trade
Commission and the Attorney General shall each submit
to the Committee on the Judiciary of the Senate and the
Committee on the Judiciary of the House of
Representatives a report detailing the enforcement
actions taken by the Federal Trade Commission and the
Department of Justice, respectively, over the preceding
year in each case in which not less than one victim was
an elder or that involved a financial scheme or scam
that was either targeted directly toward or largely
affected elders, including--
(A) the name of the district where the case
originated;
(B) the style of the case, including the case
name and number;
(C) a description of the scheme or scam;
[and]
(D) the outcome of the case[.]; and
(E) for the Federal Trade Commission, in
relevant years, information on--
(i) the newly created materials,
guidance, or recommendations of the
Senior Scams Prevention Advisory Group
established under section 2 of the Stop
Senior Scams Act, and any relevant
views or considerations made by members
of the Advisory Group that were not
included in the Advisory Group's model
materials or considered an official
recommendation by the Advisory Group;
(ii) the Senior Scams Prevention
Advisory Group's findings about senior
scams and industry educational
materials and programs; and
(iii) any recommendations on ways
stakeholders can continue to work
together to reduce scams affecting
seniors.
(d) Use of Appropriated Funds.--No additional funds are
authorized to be appropriated to carry out this section.
* * * * * * *