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FIGHTING FRAUD AGAINST THE ELDERLY, AN 

UPDATE 

HEARING 

BEFORE THE

SUBCOMMITTEE ON COMMERCE, MANUFACTURING, 

AND TRADE 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

OCTOBER 23, 2015 

Serial No. 114–92 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

JOE BARTON, Texas 

Chairman Emeritus 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

GREG WALDEN, Oregon 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Ohio 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

LARRY BUCSHON, Indiana 

BILL FLORES, Texas 

SUSAN W. BROOKS, Indiana 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

CHRIS COLLINS, New York 

KEVIN CRAMER, North Dakota 

FRANK PALLONE, JR., New Jersey 

Ranking Member 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

G.K. BUTTERFIELD, North Carolina 

DORIS O. MATSUI, California 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

BEN RAY LUJA ́ N, New Mexico 

PAUL TONKO, New York 

JOHN A. YARMUTH, Kentucky 

YVETTE D. CLARKE, New York 

DAVID LOEBSACK, Iowa 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California 

SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND TRADE

MICHAEL C. BURGESS, Texas 

Chairman 

LEONARD LANCE, New Jersey 

Vice Chairman 

MARSHA BLACKBURN, Tennessee 

GREGG HARPER, Mississippi 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

GUS M. BILIRAKIS, Florida 

SUSAN W. BROOKS, Indiana 

MARKWAYNE MULLIN, Oklahoma 

FRED UPTON, Michigan (ex officio) 

JANICE D. SCHAKOWSKY, Illinois 

Ranking Member 

YVETTE D. CLARKE, New York 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California 

BOBBY L. RUSH, Illinois 

G.K. BUTTERFIELD, North Carolina 

PETER WELCH, Vermont 

FRANK PALLONE, JR., New Jersey (ex 

officio) 

(II) 

(III) 

C O N T E N T S 

Page 

Hon. Michael C. Burgess, a Representative in Congress from the State of 

Texas, opening statement .................................................................................... 1 

Prepared statement .......................................................................................... 2 

Hon. Janice D. Schakowsky, a Representative in Congress from the State 

of Illinois, opening statement .............................................................................. 3 

Hon. Frank Pallone, Jr., a Representative in Congress from the State of 

New Jersey, opening statement .......................................................................... 4 

Hon. Fred Upton, a Representative in Congress from the State of Michigan, 

prepared statement .............................................................................................. 84 

WITNESSES

Daniel Kaufman, Deputy Director, Bureau of Consumer Protection, Federal 

Trade Commission ............................................................................................... 5 

Prepared statement .......................................................................................... 8 

Stacy Canan, Deputy Assistant Director, Office of Financial Protection for 

Older Americans, Consumer Financial Protection Bureau .............................. 25 

Prepared statement .......................................................................................... 27 

Robert F. Harris, Public Guardian, Cook County, Illinois ................................... 33 

Prepared statement .......................................................................................... 35 

Charles Wallace, Director of Undergraduate Studies, Computer Science Department, Michigan Technological University ................................................... 58 

Prepared statement .......................................................................................... 61 

Tobie Stanger, Senior Editor, Consumer Reports ................................................. 66 

Prepared statement .......................................................................................... 68 

SUBMITTED MATERIAL

Article of November 2015, ‘‘Lies, Secrets, and Scams,’’ Consumer Reports, 

submitted by Mr. Burgess ................................................................................... 85 

(1) 

FIGHTING FRAUD AGAINST THE ELDERLY, AN 

UPDATE 

FRIDAY, OCTOBER 23, 2015 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND

TRADE, COMMITTEE ON ENERGY AND COMMERCE, Washington, DC. 

The subcommittee met, pursuant to call, at 9:16 a.m., in room 

2123 of the Rayburn House Office Building, Hon. Michael C. Burgess (chairman of the subcommittee) presiding. 

Members present: Representatives Burgess, Lance, Harper, 

Guthrie, Kinzinger, Bilirakis, Brooks, Mullin, Schakowsky, Kennedy, Butterfield, and Pallone (ex officio). 

Staff present: Leighton Brown, Press Assistant; James Decker, 

Policy Coordinator, Commerce, Manufacturing, and Trade; Andy 

Duberstein, Deputy Press Secretary; Graham Dufault, Counsel, 

Commerce, Manufacturing, and Trade; Melissa Froelich, Counsel, 

Commerce, Manufacturing, and Trade; Paul Nagle, Chief Counsel, 

Commerce, Manufacturing, and Trade; Olivia Trusty, Professional 

Staff Member, Commerce, Manufacturing, and Trade; Dylan 

Vorbach, Legislative Clerk; Michelle Ash, Democratic Chief Counsel, Commerce, Manufacturing, and Trade; Jeff Carroll, Democratic 

Staff Director; Diana Rudd, Democratic Legal Fellow; and Ryan 

Skukowski, Democratic Policy Analyst. 

Mr. BURGESS. The Subcommittee on Commerce, Manufacturing, 

and Trade will now come to order. And the Chair recognizes himself for 5 minutes for the purpose of an opening statement. 

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

First, let me welcome our witnesses. This morning we will receive an update on the consumer protection efforts in place to address the fraud risk for America’s seniors. As of July 2013, there 

are over 44 million Americans who are older than 65. That is almost 14 percent of the population. The population 65 and older, in 

the United States, projects to outnumber people younger than 18 

for the first time in 2033, a mere 18 years from now. The median 

income of these households is over $35,000 per year, and 71 percent report having a computer in their home. 

The median net worth of seniors 65 and over is 25 times that of 

people under 35 years of age. The expanding population of older 

Americans and their relative wealth compared to other age groups 

increases the risk that someone will want to target them in scams. 

2 

New technologies are everywhere. Each week a new smartphone or 

tablet is announced. New apps with new capabilities keep cropping 

up. Keeping up with new technology can be a challenge, particularly for seniors that are less familiar with technology or are retired and are not exposed to new technology at the workplace. 

The risk of fraud cannot be underestimated. In the November 

issue of Consumer Reports, eight brave seniors came forward to tell 

their stories about being defrauded; in some cases, out of thousands 

of dollars, sometimes just in a matter of hours. This is all before 

family or law enforcement could be notified or intervene. 

While fraud perpetrated by strangers against the elderly is not 

the only type of abuse against the elderly, it does represent 50 percent of the reported cases. That is why the hearing today is so important. Even where there is no silver bullet, it is critically important for the subcommittee to understand what Government agencies, what the media, what universities, and what private groups 

are doing, to empower seniors to protect themselves for fraud and 

to help them recoup loses if they are targeted. And we need to figure out how our enforcement agencies can devote more resources 

to the problem. There are few more important issues when it comes 

to fraud and consumer protection. 

[The prepared statement of Mr. Burgess follows:] 

PREPARED STATEMENT OF HON. MICHAEL C. BURGESS

Good morning. This morning we will receive an update on the consumer protection efforts in place to address fraud risks for America’s seniors. 

As of July 2013, there are 44.7 million Americans 65 and older—over 14 percent 

of the population. The population 65 and older in the U.S. projects to outnumber 

people younger than 18 for the first time in 2033—in 18 years. 

The median income of these households is over $35,000, and 71 percent report 

having a computer in their home. The median net worth of seniors 65 and over is 

25 times that of people under 35 years old. The expanding population of older Americans and their relative wealth compared to other age groups, increases the risk that 

fraudsters will target them in their scams. 

New technologies are everywhere. Each week a new smartphone or tablet is announced with new Apps and new capabilities. Keeping up with new technology can 

be a challenge, particularly for seniors that are less familiar with technology or are 

retired and not exposed to new technology at work. 

The risk of fraud cannot be underestimated. In the November issue of Consumer 

Reports, eight brave seniors came forward to tell their story about being defrauded—in some cases out of thousands of dollars in a matter of hours—before family or law enforcement were notified. 

While fraud perpetrated by strangers against the elderly is not the only type of 

abuse against the elderly, it does represent 50 percent of reported cases. This is why 

the hearing today is so important. Even where there is no silver bullet, it is critically important for the subcommittee to understand what Government agencies, the 

media, universities, and private groups are doing to empower seniors to protect 

themselves from fraud and help them recuperate losses if they are duped by criminals. And we need to figure out how our enforcement agencies can devote more resources to this problem. There are few more important issues when it comes to 

fraud and consumer protection. 

Mr. BURGESS. The Chair now recognizes the subcommittee ranking member, Ms. Schakowsky, for 5 minutes for an opening statement, please. 

3 

OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Ms. SCHAKOWSKY. Thank you, Mr. Chairman, for holding this 

hearing on preventing fraud against seniors. I really appreciate the 

focus on this topic. I look forward to hearing from our witnesses. 

I want to particularly thank a fellow Chicagoan, Robert Harris, for 

being here. Mr. Harris is the Cook County public guardian, and he 

is leading the fight to protect the elderly against fraud and deception in my hometown. 

As a long time consumer advocate, and now the co-chair of the 

Congressional Task Force on Seniors, for the Democratic Caucus, 

I am committed to ensuring that seniors benefit from strong consumer protections. More now than ever this subcommittee ought to 

be helping, and we are beginning that process today, to ensure that 

elderly Americans are protected against fraudsters. 

Seniors represent the fastest growing segment of our population. 

Since 2000 the number of seniors has grown about 30 percent while 

the population overall just increased 10 percent. More than one in 

four seniors who lives alone has difficulty with activities of daily 

living or some cognitive impairment. 

According to the FBI, seniors generally have higher net worth, 

a tendency to be trusting, and are less likely to report fraud. All 

of this makes the elderly prime targets. We have seen an uptick 

in the number of products and services that are targeted toward 

the elderly, including anti-aging products, health-related products, 

prize promotions, and reverse mortgages. I am incredibly concerned 

about the risks posed by those products and services. Not necessarily that all of them are fraudulent, but that we need to be 

careful. 

I want to know what trends our witnesses are seeing, hear their 

policy and public engagement prescriptions for combatting fraud, 

and learn how we can help you in protecting the elderly. 

I would also like to say that if this Congress is truly committed 

to rooting out senior fraud, we should start by providing adequate 

funding to the CFPB, the Consumer Financial Protection Bureau, 

the Federal Trade Commission, and other agencies responsible for 

protecting seniors. Stopping fraud should not come at the cost of 

adequately overseeing financial services, industries, appropriately 

monitoring corporate data security, and privacy policies. 

Yet, unfortunately, the Republican budget would eliminate mandatory funding for the Customer Financial Protection Bureau, and 

cut funding for the FTC more than 3 percent from the previous 

year. With those entities responsible for protecting more seniors 

from more threats each year, it is hard to see how that’s proposals 

are anything but anti-senior. I hope this hearing is the beginning 

of a collaborative process that will yield real benefits to senior citizens. Our senior population and their families deserve no less. 

Again, I thank the witnesses for appearing today. I thank the 

chairman for this hearing, and I look forward to gaining from your 

insights. 

Mr. BURGESS. Does the gentlelady yield back? 

Ms. SCHAKOWSKY. And I yield back. 

4 

Mr. BURGESS. The gentlelady yields back. The Chair thanks the 

gentlelady. 

The Chair asks if there are other Members on the Republican 

side who seek time for an opening statement. 

We will temporarily conclude with Members’ opening statements. 

There may be additional Members on either side that may yet arrive at the committee, and we would like to give them time. Because we do know there is another subcommittee hearing going on 

this morning and people are toggling in between. 

For the Members who are here, the Chair reminds Members that 

pursuant to committee rules, all Members’ opening statements will 

be made part of the record. To be respectful of everyone’s time, the 

Chair, then, is pleased to recognize the ranking member of the full 

committee, Mr. Pallone, 5 minutes for the purpose of an opening 

statement. 

Mr. PALLONE. Oh, you shouldn’t wait for me, Mr. Chairman. 

Mr. BURGESS. So noted. It will never happen again. 

Mr. PALLONE. Seriously, you shouldn’t. 

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY 

I want to thank you and the ranking member for holding today’s 

hearing on ways to protect our seniors from fraud. 

As we have seen far too often each year, fraud affects consumers 

of all ages, and the perpetrators of scams remain highly adept at 

avoiding the consequences of their criminal acts. Seniors, however, 

are a fast growing segment of our population and the threats to 

their financial security, can mean billions of dollars in stolen assets 

if we let them fall prey to scammers. 

Today’s seniors are living longer, more active lives and possess 

greater wealth than previous generations of seniors. These are obviously encouraging trends, but also represent opportunities for 

abuse to occur. Seniors are inundated with advertisements that 

promote fraudulent work-from-home arrangements, computer repair, anti-aging products, and many others. They are also targeted 

disproportionately for certain scams like those involving prize promotions, health-related products and services, and reverse mortgages. 

In addition, more active lives increasingly means active on the 

Internet where a significant number of scams originate, according 

to the FTC. Moreover, certain types of harassment such as being 

constantly bombarded with telemarketing scams and feeling the 

need to stop answering the phone, can lead to feelings of isolation 

for our seniors. Most troubling, we also are seeing a rise in abuse, 

particularly financial in nature, committed by those closest to seniors, including family, friends, caregivers. Or other trusted advisors. Seniors who are victimized are often hesitant to report crimes 

to law enforcement either out of embarrassment or fear of retribution from their abuser. Others may simply be unaware of a crime 

committed against them. 

A number of Federal agencies stand ready to assist State and 

local services in combatting fraud against seniors. The FTC and the 

Consumer Financial Protection Bureau both play a key role in colVerDate Mar 15 2010 11:54 Oct 26, 2016 Jkt 037690 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X92ELDERFRAUDXNDFPSTMT\114X92ELDERFRAUDPENDING
5 

lecting data, educating consumers, and taking enforcement actions 

against the perpetrators of financial exploitation. And as often is 

the case, much of the day-to-day fighting against fraud is occurring 

at the State and local levels. 

I look forward to hearing from those witnesses today about what 

is working and where we can improve our response to fraud 

against seniors. Our seniors and the savings they have worked so 

hard build over the course of their lives are at stake. And some 

seniors have seen their nest eggs wiped away, never to return. We 

need to ensure that all levels of Government are doing what they 

can and have the tools they need to prevent these devastating scenarios. We owe this commitment to our seniors. 

I just wanted to say, when I graduated from law school, for a 

couple years I was actually—I worked for an agency in New Jersey 

called Protective Services for the Elderly. And when I was in the 

State legislature, we actually put together a bill that Governor 

Cane, who was a Republican signed, that basically set up a program protecting the elderly from fraud and abuse. So I am particularly—I haven’t really been involved as directly since then. That is 

a long time ago. But it is always something that I worry a great 

deal about and I was actually involved with on a day-to-day basis. 

So thank you, Mr. Chairman. 

Mr. BURGESS. The gentleman yields back. The Chair thanks the 

gentleman. 

Now, we will turn to our witnesses. We do want to thank them 

for being here with us this morning and taking time to testify before this subcommittee. 

Today’s hearing will consist of two panels. Each panel of witnesses will have an opportunity to give an opening statement, followed a round of questions from Members. Once we conclude with 

questions of the first panel, we will take a brief recess to set up 

for the second panel. 

Our first witness panel for today’s hearing includes Mr. Daniel 

Kaufman, Deputy Director of the Bureau of Consumer Protection 

at the Federal Trade Commission; Ms. Stacy Canan, Deputy Director of the Office of Financial Protection for Older Americans at the 

Consumer Financial Protection Bureau; and Mr. Robert F. Harris, 

Public Guardian of Cook County, Illinois. 

We appreciate all of you being here today, and we will begin the 

panel with you, Mr. Kaufman. You are recognized for 5 minutes for 

an opening statement, please. 

STATEMENTS OF DANIEL KAUFMAN, DEPUTY DIRECTOR, BUREAU OF CONSUMER PROTECTION, FEDERAL TRADE COMMISSION; STACY CANAN, DEPUTY ASSISTANT DIRECTOR, OFFICE OF FINANCIAL PROTECTION FOR OLDER AMERICANS, 

CONSUMER FINANCIAL PROTECTION BUREAU; AND ROBERT 

F. HARRIS, PUBLIC GUARDIAN, COOK COUNTY, ILLINOIS 

STATEMENT OF DANIEL KAUFMAN 

Mr. KAUFMAN. Thank you. And good morning, Dr. Burgess, 

Ranking Member Schakowsky, and members of the subcommittee. 

I am Daniel Kaufmann, Deputy Director of the Bureau of Consumer Protection at the Federal Trade Commission. And I am deVerDate Mar 15 2010 11:54 Oct 26, 2016 Jkt 037690 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X92ELDERFRAUDXNDFPSTMT\114X92ELDERFRAUDPENDING
6 

lighted to appear before you to provide an overview of the fraud 

threats to older Americans, and the FTC’s actions to address them. 

Combatting fraud is a critical component of the FTC’s consumer 

protection mission, and virtually every law enforcement case that 

we bring affects older Americans. We have adopted a multifaceted 

approach in our battle against fraud that targets older consumers 

or injures them more than others. And that includes aggressive law 

enforcement, policy initiatives, and consumer education and outreach. 

To address such fraud effectively, the FTC monitors fraud trends 

by examining data gathered from consumer complaints and surveys, and collaborating with others in law enforcement, industry, 

academia, and legal services. 

Through our extensive law enforcement experience and efforts to 

track fraud trends, we have identified practices affecting seniors in 

several discrete areas. And our consumer complaint data shows 

that for 2015, older Americans complained primarily about Government and business imposter scams, telemarketing, technical support scams, and sweepstakes and lottery scams. 

While our consumer survey shows that older Americans are not 

necessarily more likely to be defrauded than younger consumers, 

the FTC has nevertheless focused on scams involving seniors. For 

example, in recent years, we have concentrated our law enforcement efforts on technical support and healthcare-related scams. 

Fraudsters frequently claim affiliation with well-known businesses 

or Government agencies to build trust with consumers, and often 

use robocalls and spoof caller IDs to reach as many people as possible. 

In the last year, the FTC has filed three cases against defendants engaged in technical support scams where con artists tricks 

consumers into purchasing technical support services and products, 

purportedly to fix problems on their computers. In fact, the computer problems are nonexistent and the defendants have caused 

millions of dollars in injury to older consumers. The FTC’s actions 

are crucial in halting these practices. 

Similarly, the FTC has filed multiple cases against fraudsters 

that have used deceptive practices to sell healthcare-related products and services to older Americans, such as medical alert systems, pharmaceutical benefits, and fake information regarding 

Medicare benefits. In all of these cases, the fraudsters pretended 

an affiliation with a consumer’s friend or family member or with 

a well-known bank or Government agency in order to gain consumers’ trust. 

Our law enforcement efforts have banned defendants from telemarketing, making robocalls, selling healthcare-related products or 

debiting bank accounts, and we have recovered money for consumers. 

We have also sued money transfer services that are commonly 

used in scams that target older Americans. And our coordination 

with State, Federal, and international partners is as strong as 

ever. Indeed, some of the individuals sued by the FTC for defrauding elderly consumers have been prosecuted criminally. 

Finally, consumer education and outreach are indispensable. In 

2014 we launched an innovative and successful education effort 

7 

called Pass It On that is aimed at older active consumers. Pass It 

On arms seniors with important information regarding topics such 

as imposter and healthcare scams, charity fraud, and identify theft 

that they can pass on to family and friends who might need it. 

The FTC has an ongoing and sustained commitment to protecting older Americans by pursuing robust law enforcement, important policy work, and innovative consumer education and outreach. 

I look forward to any questions you may have. 

[The prepared statement of Mr. Kaufman follows:] 

8 


Prepared Statement of 

The Federal Trade Commission 

Before the 

Subcommittee on Commerce, Manufacturing, and Trade 

of the 

House Energy and Commerce Committee 

on 

Fighting Fraud Against the Elderly, An Update 

Washington, DC 

October 23, 2015 
9 


Dr. Burgess, Ranking Member Schakowsky, and members of the Subcommittee, I am 

Daniel Kaufman, Deputy Director of the Bureau of Consumer Protection at the Federal Trade 

Commission ("Commission" or "FTC").' I appreciate the opportunity to appear before you 

today to provide an overview of current fraud trends affecting older Americans2 and the 

Commission's actions to address them. 

Combatting fraud is a critical component of the FTC's consumer protection mission. All 

consumers are potential fraud targets, and older Americans arc not necessarily defrauded at 

higher rates than younger consumers.3 However, certain types of scams are more likely to 

impact older Americans, such as imposter schemes purporting to provide technical support to 

"fix"' non-existent computer problems or scams relating to health care. As the population of 

older Americans grows rapidly, the FTC's efforts to recognize these trends, bring aggressive law 

enforcement action, and educate seniors become increasingly vital.4 

The Commission has taken a multi-faceted approach that encompasses robust law 

enforcement, strategic policy proposals, and vigorous consumer education and outreach. This 

The views expressed in this statement represent the views of the Commission. My oral 

presentation and responses to questions are my own and do not necessarily reflect the views of the 

Commission or any individual Commissioner. 

References in this testimony to '·seniors,·· or "older" or "elderly'' individuals, means the 

population 65 years and over, unless noted otherwise. 

The FTC's third consumer fraud survey revealed that the overall rate of victimization for 

consumers 65 and older was significantly lower than for younger consumers. Fed. Trade Comm'n 

Bureau of Economics Staff Report, Consumer Fraud in the US., 201/, at 56-59 (Apr. 2013), available at 

https://www.ftc.govireports/consumer-fraud-united-states-2011-third-fte-survev (last visited Oct. 13, 

2015). 

In its 2014 report, the U.S. Census Bureau stated that by 2050, it projects the population 

over 65 to be 83.7 million, nearly double the estimated population of 43.1 million in 2012. By 2030, the 

U.S. Census Bureau also anticipates that more than 20 percent of U.S. residents will be over the age of 65, 

compared to 13 percent in 20 I 0 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, at 1-3 (May 2014), available at 

https:iiwww.census.gov/prod/20 14pubs/p25-l 140.pdf. 
10 


testimony describes the current threat landscape, and then outlines the Commission's various 

initiatives to protect older Americans. 

I. Current Threats to Older Americans 

Virtually every law enforcement case that the Commission brings affects some seniors, 

and certain types of scams appear to target seniors specifically. The threats to seniors range from 

illegal telemarketing and online scams to identity theft. To identity and analyze trends, the FTC 

assesses the marketplace in numerous ways: by tracking consumer complaints; examining 

empirical data gathered from surveys; 5 and investigating information obtained from collaboration 

with law enforcement partners, consumer groups, industry members, academics, and others. In 

addition, the FTC hosts Common Ground conferences around the country with state law 

enforcement partners and legal services advocates to help identify frauds affecting consumers in 

different communities and highlight research on successful interventions.6 For example, the FTC 

hosted a workshop entitled "Fraud Affects Every Community." The workshop brought together 

consumer advocates, state and federal regulators, fraud prevention experts, industry members, 

and academics to explore frauds affecting particular groups, including older adults. 7 

Fed. Trade Comm'n Bureau of Economics Staff Report, Consumer Fraud in the US, 

2011, at 59 (Apr. 2013), available at https://www.ftc.gov/reports/consumer-fraud-united-states-20 11-

third-ftc-survey (last visited Oct. 13, 20 15). 

The FTC has hosted 30 Common Ground conferences since 20 l 0. See Fed. Trade 

Comm'n, Common Ground Events Calendar, available at http://www.consumer.gov/contentlcommonground-events-calendar (last visited Oct. 13, 20 15). The most recent conference took place in Salt Lake 

City, Utah on October 22,2015 where the FTC co-hosted the event with the Utah Division of Consumer 

Protection. See Utah Consumer Protection Summit (Oct. 22, 20 15), available at 

https://www .ftc.gov/news-events/evcnts-calendar/20 15/ l 0/utah-consumer-protection-summ it (last visited 

Oct. 13, 2015). 

Press Release, Commission Announces Workshop to Explore How Fraud Affects 

Different Communities (Sept. 9, 2014), available at https:/lwww.ftc.gov/news-events/pressrelcases/20 14/09 I eomm iss ion-announces-workshop-ex pi ore-how-fraud-affccts-d i fferent. 

2 
11 


Through these efforts and our law enforcement experience, the Commission has 

identified fraudulent practices in the marketing of several types of products to seniors including: 

(I) sweepstakes, prize promotions, and lotteries;8 (2) timeshare sales and rc-sales;9 (3) health 

care products and services; 10 (4) investments, business opportunities, and work-from-home 

programs; 11 (5) technical support serviccs; 12 and (6) charitable donationsu 

In addition, the Consumer Sentinel Complaint database-an online database of 

complaints maintained by the Commission-shows that in 2014 consumers age 60 and older 

See, e.g., FTC v. Mail Tree, Inc, No. !5-CV-6!034-JIC (S.D. Fla. May 2!, 2015), 

available at https://www.ftc.gov/cnforcementicases-proceedingsll42-3068/mail-tree-inc. The FTC's 

third consumer fraud survey revealed that consumers between the ages of 65 to 74 years of age were more 

likely to be victims of' fraudulent prize promotions than younger consumers. Fed. Trade Comrn'n Bureau 

of Economics Staff Report, Consumer Fi·aud in the US, 2011, at 59 (Apr. 20!3), available at 

https://www.ftc.gov/reports/consumer-fraud-united-states-20 !!-third-ftc-survey (last visited Oct. !3, 

20!5). 

See, e.g., FTC v. Consumer Collection Advocates, Corp,, No. 14-CV -6249!-BB (S.D, 

Fla. Nov. 20, 2014). available at https://www.ftc.gov/enforcement/cases-procecdings/l42-

3082/consumer-collection-advocates-corp. 

10 See, e.g., FTC v. Lifewatch, Inc., No. !5-CV-05781 (N.D. Ill. July 6, 2015), available at 

https://www.ftc.govienforcerncnt/cases-proccedings/142-3!23/lifewatch-inc.; FTC v. Sun Bright Ventures 

LLC, ~o. 14-CV-02153-JDW-EAJ (MD. Fla. Oct. 2, 2014), ami/able at 

https:/ /www. ftc.gov /en forcemcnt/cases-proceedings/1 32-321 7 /sun-bright-ventures-llc-gmv-llc. 

ll See, e.g, FTC v. Consumer Collection Advocates, Corp., No. 14-CV-62491-BB (S.D. 

Fla. Nov. 20, 20 14), available at https://www.ftc.gov/enforcement/cases-proceedings/l42-

3082/consumer-collection-advocates-corp: FTC v. The Tax Club, No. 13-CV-210 (S.D.N.Y. Jan. 9, 

2013 ), available at https://www.ftc.gov/enforcernent/cases-proceedingsll22-3071 /tax-club-inc-et-a!; FTC 

v. American Bus. Builders, LLC, No. 13-CV-02368 (D. Ariz. Nov, 6, 2012), available at 

https:i/www.ftc.gov/enforcement/cases-proceedings/ 122-3 19! /arnerican-business-builders-llc-et-al: FTC 

v. Real Wealth, Inc., No. 10-CV-00060 (W.O. Mo. Jan. 21, 2010), available ar 

https: i /www. ftc.gov /en forcement/cases-procecdings/092-3 207 /real-wealth-et-a!. 

12 See, e.g., FTC v. Boost Software, Inc., No. 14-CV-8!397 (kir) (S.D. Fla. Nov. 19, 2014), 

available at https:i/www.ftc.gov/enforcementicases-proceedings/132-3283/boost-software-inc; FTC v. 

Inbound Call Experts, Inc., No. 14-CV-8!395 KAM (S.D. Fla. Nov. 19, 20!4), available at 

https:/ /www. ftc.govlenforcementlcases-proceedings/ !32-3 135/inbound-call-experts-llc; FTC v. Pairsys, 

Inc., No. 14-CV-!!92 TJM-CFH, (N.D.N.Y. Oct. 24, 20!4), availahle at 

https:/ /www. ftc.govienforcement/ cases-proceedings/ 142-3099/pairsys-inc. 

See, e.g, FTC v. Cancer Fund ofAm., Inc., CVlS-884 PHX NVW (D. Ariz. May !9, 

20 15), avai !able at https:/ /www. ftc.gov/cnforcement!cases-proccedingsll22-3005/cancer-fund-america3 
12 


complained primarily about: telemarketing calls; government, business, and fi·icnd imposter 

scams; third-party debt-collectors; prizes/sweepstakes/lotteries; and shop-at-home salcs. 1

'

1 

Figure 1: Top Product Service Codes for Consumers Age 60 and Over in Consumer 

Sentinel Network Complaints January 1- December 31,201415 

2% Mortgage 

3% Lotteries 

4% 4% 

Impostor: 

Government 

18% 

Telemarketing 

Practices 

14% 

Impostor: Business 

11% 

In response to these trends, the FTC has focused its efforts on three fronts described 

(I) law enforcement targeting specific types of fraudulent schemes and payment 

mechanisms; (2) policy proposals to limit the usc ofpaymeut mechanisms that enable the quick 

1\ 2014. the Consumer Sentinel Network received complaints 

In of those complaints (or 794.668), 

the Consumer Sentinel Network, 

l11J.!2L:;2JJ"ll''i!.:l'i£.:!?!2'~'lK'CD'-!!.!.f!li'if!?lll!:!i!l1fi::!!.f.'!1U!.!.!!.L:!1?J.lt.QI:/s. (last visited Oct. 13, 20 15). 

1

' Percentages arc based on the 217.017 consumers who reported their age of 60 and over. 

figures exclude Do Not Call registry and identity theft complaints. Note: The section of the chart 

labeled .. Other'' represents complaints regarding over !00 other of products, such as counterfeit 

checks, credit cards. unsolicited entails, advance-fcc loans and arrangers, and 

spyware\adwarc\malwarc. 

4 
13 


and irretrievable transfer of money to a fraudster; and (3) clear messages to help older Americans 

avoid common fraud schemes. 

II. Law Enforcement 

Aggressive Jaw enforcement is crucial to the FTC's efforts to protect older Americans. 

Since 2005, the Commission has brought over thirty cases against fraudsters who have 

specifically injured that population. Although scams targeting older Americans are diverse and 

have ranged from sweepstakes to business opportunities. the FTC has in recent years 

concentrated its law enforcement efforts on online threats and health care. 16 In these scams, 

fraudsters frequently invoke affiliation with legitimate and well-known businesses or 

government agencies in an attempt to gain consumers' trust. As demonstrated by Consumer 

Sentinel complaint data, these tactics have become increasingly popular. 17 The FTC also has 

pursued actions related to the money transfer services that are commonly used in scams affecting 

older adults and coordinated efforts with criminal law enforcement to achieve a broader impact. 

16 See Fed. Trade Comm'n, Prepared Statement of the Federal Trade Commission on Elder 

Fraud and Consumer Protection Issues Before the Subcommittee on Commerce, Manufacturing, and 

Trade of the Committee on Energy and Commerce, United States House of Representatives, at 9-l 0 (May 

16, 2013 ), available at https:llwww.ftc.gov/public-statements/20 13105/prepared-statement-federal-tradecommission-elder-fraud-and-consumer. 

17 As demonstrated by the chart below. the number of reported imposter scams has more 

than tripled since 2012. Press Release, FTC Releases Top I 0 Complaint Categories for 2012 (Feb. 26. 

2013), available at https:l/www.f'tc.gov/news-eventslpress-releases/20 13/02/ftc-releases-top-1 0-

complaint-categories-20 12; Press Release, FTC Announces Top National Consumer Complaints for 2013 

(Feb. 27, 20 14), available at https://www.ftc.gov/news-events/press-releases/20!4102/ftc-announces-topnational-consumer-complaints-20 13; Press Release, Identity Theft Tops FTC's Consumer Complaint 

Categories Again in 2014 (Feb. 27, 20 15), available at https://www.ftc.gov/ncws-evcnts/prcssreleases/20 15102/identitv-theft-tops-flcs-consumer-complaint-catcgories-again-20 14. 

5 
14 


A. Online Threats 

With the explosion of technological developments, the online space is ripe for fraud 

against older Americans. Technical support scams are a particularly prevalent online threat. A 

typical technical support scam begins with the words "There is a problem with your computer. 

will help you fix it.'' The scammer then proceeds to deceive consumers into purchasing 

unnecessary, worthless, or even harmful services to "fix" non-existent problems, leading 

consumers to believe that the technical support worked when in reality the computer never had a 

problem. 

In response to increased consumer frustration with this particular scheme. the FTC 

created a new complaint category, "tech support scams.'' in January 2015 to better track its 

prevalence. As of August 2015, the FTC received 23,709 complaints for this category with a 

reported consumer loss of more than $5 million. Significantly, this trend appears to have a 

disproportionate impact on older consumers. 18 Seventy-six percent of complainants who 

reported their age in the Consumer Sentinel database are over the age of 50, and fifty-six percent 

are over the age of 60. 19 

The FTC has filed numerous cases against defendants engaged in these deceptive 

practices. For example, in a case that was recently settled, the FTC sued overseas telemarketers 

who falsely claimed to be aftiliated with major computer or Internet security companies. The 

18 At the FTC's Fraud Affects Every Community Workshop, Courtney Gregoire. a senior 

attorney with Microsoft's Digital Crimes Unit, reported that Microsoft had conducted a limited survey 

that revealed the scam disprop011ionately injured senior citizens. See Fraud Affects Every Community 

Workshop Transcript (Oct. 29, 2014) ("But the 12.9% that suffered financialloss ... fell into the senior 

citizen category. And that has been our primary focus, as we think about how we address this issue from 

an education and outreach" perspective.). available at https://www.ftc.gov/news-events/audiovideo/video/fraud-affects-every-communitv-workshup-part-2. 

19 Although providing personal information such as age is not required to tile a complaint, 

18.000 technical support scam complainants provided age information. 

6 
15 


FTC alleged that the tclemarketers told consumers that their computers were riddled with viruses 

and malware and then offered to "fix" these non-existent problems for several hundred dollars. 

The defendants agreed to relinquish most of their assets 20 Similarly, in two other cases, the FTC 

charged defendants with tricking consumers into believing there are problems with their 

computers and selling technical support products and services to "fix'' these consumers' nonexistent computer problems. 21 These two cases remain in litigation. Technical support scams 

have caused hundreds of millions of dollars in injury. The agency continues to actively seck law 

enforcement targets and has additional investigations underway. 

B. Health Care 

Many scammers also take advantage of technological advancements in the phone system 

to blast millions of prerecorded messages, or robocalls. 22 to seniors for the sale of healthcarerelated goods or services such as medical alert devices or discounts for medical or 

20 See Press Release, Operators of Alleged Tech Support Scam Settle FTC Charges, Will 

Surrender Money and Property (Oct. 20, 201 5), available at https://www.ftc.gov/news-events/pressreleases/20 J 5/ J 0/operators-alleged-tech-support-scam-settlc-ftc-charges-will. This case follows a major 

international crack down that the FTC launched in 2012, halting six tech support scams primarily based in 

India that targeted consumers in the United States and other English speaking countries. FTC v. Pecan 

Software Ltd.. No. 12-CV-7186 (S.D.N.Y. Sept. 24, 2012), available at 

http://www. ftc.govlcnforcement/cases-proceedings/ll23118/pecon-software-ltd-ct-a1; FTC v. Marczak, 

No. 12-CV-7192 (S.D.N. Y. Sept. 24, 20 12), available at http://www.ftc.gov/cnforcemcnt!casesproccedi ngs/ 1223246/virtual-pc-solutions-mikael-marczak-aka-michael-marczak-et-al; ,FTC l-\ 

Finmaestros, LLC, No. 12-CV-7195 (S.D."--.Y. Sept. 24, 20 12), available at 

h11p://www. ftc.gov/enforcementlcases-proceedingsl 122324 7/finmaestros-llc-ct-a1; FTC v. Lakshmi 

li!fosoul Servs. Pvt Ltd., No. 12-CV-7191 (S.D.N.Y. Sept. 24, 2012), available at 

http:iiwww. ftc.gov/cnforccmcnt/cases-proceedings/1223245/lakshmi-infosoul-services-pvt-ltd; FTC v. 

PCCare247 Inc., No. 12-CV-7189 (S.D.N.Y. Sept. 24, 2012), available at 

http://www. t1c.gov ienforccmenticases-proceedings/122-3243-x 120057 /pccare24 7 -inc-et -al. 

21 See, e.g., FTC v, Boost S(~ji-ware, Inc., No. 14-CV-81397 (kir) (S.D. Fla. Nov. 19, 20 14), 

available at https://www.ftc.gov/enforcement/cases-proccedings/132-3283/boost-software-inc; FTC v. 

Inbound Call Experts, Inc., No. 14-CV-81395 KAM (S.D. fla. Nov. 19, 2014), available at 

https ://www. t1c.gov /enforcement/cases-proceedings/ I 3 2-3 13 5/inbound-call-experts-llc. 

Changes in technology have Jed to an immense source of consumer frustration 

blasting of prerecorded messages that primarily rely on Voice over Internet Protocol e·v o!P") 

technology. The FTC currently receives an average of 170,000 robocall complaints per month. 

7 

the 
16 


pharmaceutical services. For example, in FTC v. Worldwide Jnjil Services, Inc., the FTC filed 

suit against telemarketers who used robocalls to pitch a purportedly •'free" medical alert system 

that a friend, family member, or other acquaintance had purchased for the consumer. In reality, 

no one had agreed to purchase the system, and the company charged consumers, many of whom 

were elderly, $34.95 per month for monitoring.23 The settlement with defendants permanently 

bans them from making robocalls.".\ Similarly, earlier this year the FTC sued Lifewatch, Inc. for 

tricking older consumers into signing up for a medical alert system."5 That case remains in 

litigation. 

Scammers have also falsely claimed an affiliation with government agencies to prey on 

consumers' fear of losing a government health benefit. In FTC v. Sun Bright Ventures, LLC, the 

FTC charged that defendants pretended to be part of Medicare and targeted older Americans. 

Defendants allegedly tricked seniors into providing their bank account information by telling the 

consumers that the information was required to obtain a new Medicare card or to receive 

important information about Medicare benefits. Once the defendants received the bank account 

information, they debited consumers' accounts by initiating a remotely created check that the 

23 FTC v. fVorldwide Info Services, Inc,. No.6: 14-cv~8-0RL-28DAB (t\,1.0. Fla. Jan. 6, 

2014), availahle at http://www.ftc.gov/enfOrcement/cases-proccedings/132-3175/worldwidc-infoserviccs-inc. Worldwide Info Services was telemarketing on behalf ofLifewatch, Inc. Despite 

Worldwide's agreement to be banned from sending robocalls. Lifcwatch continued utilizing other 

telemarketers to engage in the same deceptive business practices, leading to the FTC's current suit against 

Lifewatch, Inc. See Press Release, FTC, Florida Attorney General Sue to Stop Deceptive Robocalls from 

Operation that Pitched Seniors "Free" Medical Alert Systems (July 6, 2015), available at 

https:/ /www. ftc.gov/news-events/press-releases/20 I 5/07 ittc-florida-attomey-general-sue-stop-decepti verobocalls. 

24 Press Release, Settlement with FTC and Florida Attorney General Stops Operations that 

Used Robocalls to Fraudulently Pitch Medical Alert Devices to Seniors (Nov. 13, 20 14), available at 

https:i iwww. ftc.gov lnews-eventsipress-releascs/20 14/ I I /settlement-ftc-florida-attorney-general-stopsoperations-used. 

25 FTC v. Li{'ewatch, Inc., No. 15-CV-05781 (N.D. Ill. July 6, 2015), available at 

https:/!www. ftc. g,ovicn forcement/cases-proceedings/ 14 2-3123/li fewatch-inc. 

8 
17 


consumer never saw or authorized.26 The FTC sued Sun Bright Ventures and the individuals 

running it, seeking a temporary restraining order along with an asset freeze. As part of the recent 

settlement. defendants are permanently banned from selling healthcarc-related products and from 

debiting bank accounts by creating or depositing remotely created checks and a similar payment 

mechanism, remotely created payment orders?7 

Complementing these enforcement actions against the fraudsters, the FTC also has sued 

the money transfer services commonly used in these scams targeting older Americans. For 

example, in 2009, the Commission charged that MoneyGram allowed telemarketers to bilk U.S. 

consumers out of tens of millions of dollars using its money transfer system.28 The FTC's 

settlement with MoneyGram required it to pay $18 million in restitution to settle the charges. 

26 FTC v. Sun Bright Ventures LLC. No. 14-CV-02153-JDW-EAJ (M.D. Fla. Oct. 2, 2014), 

available at https:l/www.ftc.gov/enforcement/cascs-proceedings/132-32!7/sun-bright-ventures-llc-gmy-

!k. 

Press Release, FTC Action: Scammers Banned from Selling Healthcare Products (July 

27, 20 15), available at https://www.ftc.gov/news-events/press-releases/20 15/07/ftc-action-scammersbanned-selling-healthcare-products. 

FTC v. 1\IoneyGram lm'l, Inc., No. I :09-cv-06576 (N.D. Ill. Oct. 19, 2009). The FTC 

charged that MoneyGram knew that its system was being used to defraud people, many of whom were 

elderly, but did very little about it. For example, the FTC alleged that MoneyGram knew, or avoided 

knowing, that about I 31 of its more than I ,200 agents accounted for more than 95 percent of the fraud 

complaints MoneyGram received in 2008 regarding money transfers to Canada. The Commission further 

alleged that MoneyGram ignored warnings from law enforcement officials and its own employees that 

widespread fraud was being conducted over its network, and even discouraged its employees from 

enforcing its own fraud prevention policies or taking action against suspicious or corrupt agents. See 

Press Release, FTC. MoneyGram to Pay $18 Million to Settle FTC Charges That it Allowed its Money 

Transfer Sysrem To Be Used ji!r Fraud (Oct. 20, 2009), available at 

The Department of Justice subsequently negotiated a defen·ed prosecution agreement, pursuant to 

which MoneyGram paid an additional $100 million to victims of fraud. See United States v. MoneyGram 

fnt'l. Inc., No. I :12-CR-00291, D.E. 3 (M.D. Pa. Nov. 9, 2012); Pending Criminal Division CasesUnited States v. AfoneyGram International, U.S. Dcp't of Justice, 

http://www.justice.gov/eriminal/vns/caseup/moneygram.html (last visited Oct. 13, 20!5). In addition, in 

2008 forty-five state attorneys general entered into a $1.2 million multi-state settlement with 

MoneyGram. See Press Release, Office of the Vermont Attorney General, Attorney General Announces 

S/.2 _Mil/ion Settlement With lv!oneyGram (July 2, 2008), available at 

http://www.atg.state.vt.us/news/attornev-general-announces-1.2-rnillion-settlement-with-moneygram.php. 

9 
18 


The FTC is currently investigating whether another money transfer service company- Western 

Union has used effective procedures to stop consumers from sending funds to perpetrators of 

fraud, here and abroad, using its money transfer network. 29 In addition to its enforcement 

efforts, the FTC continues to collaborate informally with money transfer companies, reloadable 

prepaid card services, retailers, financial institutions, and other private sector entities to improve 

their fraud-prevention practices. 

C. Coordinating with Criminal Law Enforcement 

The Commission, through its Criminal Liaison Unit ("CLU''), coordinates extensively 

with criminal law enforcement agencies in combatting scams, including referring perpetrators to 

criminal law enforcement authorities for prosecution.30 Since the creation of the Cl.U in 2003, 

hundreds of fraudsters have faced criminal charges and prison time as a result of FTC referrals. 

Given the cross-border nature of many scams, the Commission also partners with foreign 

agencies to combat scams that impact the elderly. For example, the Commission is a member of 

the Centre of Operations Linked to Telemarketing Fraud ("Project COLT"), a joint operation 

FTC v. The Western Union Co., No 13-3100, Brief of Appellant [D.E. #49J at 1 (2d Cir. 

Nov. 27, 2013) (filing in litigation to enforce FTC civil investigative demand served on Western Union). 

In 2005, forty-eight state attorney generals entered into an $8.1 million multi-state settlement with 

Western Union to resolve charges that the company failed to take steps to stop fraudsters from using its 

money transfer system to defraud consumers. See Press Release, Office of the Vermont Attorney 

General, Western Union Enters Into Settlement With Attorneys General (Nov. 14, 2005), available at 

http :I /www .atg.s tate. vt.us/news/ westem-un ion-enters-into-settlement-with-attomeys-gen eral. php. 

30 In FTC v. Mail Tree, Inc., the FTC charged defendants for running a global sweepstakes 

operation that targeted senior citizens. FTC v. Mail Tree, Inc., No. 15-CV-61 034-JIC (S.D. Fla. May 21, 

20 15), available at https://www.ftc.gov/enforcement/cases-proceedingsll42-3068/mail-trcc-inc: Press 

Release, FTC Action Halts Global Sweepstakes Scam (May 21, 2015), available at 

https:/ /www. ftc.gov lnews-events/press-releases/20 15/05/tk-action-halts-global-sweepstakes-scam. In a 

companion case, the Office of the United States Attorney for the Southern District of Florida indicted four 

individuals in connection with the sweepstakes operation. Press Release, FTC Action Halts Global 

Sweepstakes Scam (May 21, 2015), available at https://www.ftc.gov/news-eventsipressreleascs/20 15/05/ftc-action-halts-global-sweepstakcs-scam; Press Release, Four South Florida Residents 

Charged in Sweepstakes Fraud Scheme (May 21, 20 15), available at http://www.justice.gov/usaosd tl/pr I four-south-florida-residents-charged-sweepstakes-fraud-scheme. 

10 
19 


involving U.S. and Canadian agencies to combat cross-border telemarketing fraud. 31 Through 

this operation, the FTC coordinates law enforcement eftorts and exchanges intelligence with 

Canadian authorities. The FTC's involvement in Project COLT has resulted in at least ten 

indictments of individuals involved in grandparent31 and timeshare scams. 33 Since its inception 

in I 998, Project COLT has recovered over $26 million for victims of telemarketing fraud. 

[n addition, the FTC is also a member of the Jamaican Operations Linked to 

Telemarketing task force ("Project JOLT"). Project JOLT is a multi-agency task force consisting 

of U.S. and Jamaican law enforcement agencies working cooperatively to combat Jamaicanbased t!·audulent telemarketing operations that target U.S. consumers. 34 The FTC, through its 

involvement in Project JOLT, shares information, investigative resources, and complaint data 

with other JOLT members. The Commission has supported multiple prosecutions in partnership 

31 Project COLT members include the Royal Canadian Mounted Police, Surcte du Quebec, 

Service de Police de la Ville de Montreal, Canada Border Services Agency, Competition Bureau of 

Canada. Canada Post, U.S. Homeland Security (U.S. Immigration and Customs Enforcement and the U.S. 

Secret Service), the U.S. Postal Inspection Service, the FTC, and the FBI. 

A grandparent scam involves an imposter claiming to be a grandchild in need of 

immediate financial help, such as money to get out of jail or to cover hospital costs. Many perpetrators in 

these types of cases are located overseas. See, e.g., U.S. v. Kirstein, Buchan, El Bernachauy, lacina, & 

Kama/din, No. CR 13 00469 (C. D. Cal. July 9, 2013); Press Release, FI3l, Alleged Operator of' 

"Grandparent Scam" Indicted (Oct. 26, 2012). available at http://www.fbi.gov/losangeles/prcssreleases/20 12/alleged-operator-of~grandparent-scam-indictcd. 

33 See, e.g., Press Release, FBI, Owner of' Timeshare Telemarketing Fraud Sentenced to 20 

Years in Prison (Jan. 29, 2014), available at http://www.tbi.gov/miami/press-releases/2014/owner-oftimesharc-telemarketing-fraud-sentenced-to-20-vears-in-prison; Press Release, United States Attorney's 

Oftlce for the Northern District of Georgia, Adams Sentenced to Over 17 Years in Prison for Multilvfiilion Dollar Telemarketing Fraud Scheme (Feb. 9, 2012), available at 

http://www.justice.gov/archivelusao/gan/press/20 12/02-09-l2.html. 

34 JOLT members include the FTC, Immigration and Customs Enforcement, the 

Department of Homeland Security, the Department of Justice, the Postal Inspection Service, the FBI, and 

Jamaican law enforcement agencies. 

II 
20 


with Project JOLT, including prosecutions for scams that targeted the elderly and impersonated 

government agencies to promote fake lottery schemes 3 ' 

III. Policy Initiatives 

The FTC's robust and longstanding law enforcement program has revealed certain 

systemic and regulatory weaknesses that fraudsters exploit time and again. Indeed, the 

Commission's telemarketing law enforcement record demonstrates that certain payment 

mechanisms enable fraudsters to steal consumer funds more easily. In FTC v. First Consumers, 

for example, the defendants cold-called seniors claiming to sell fraud protection, legal protection, 

and pharmaceutical benefit services for several hundred dollars. In some cases, the defendants 

pretended to be affiliated with a financial institution or government agency in order to gain 

consumers' trust. Once the consumers disclosed their bank account information, the defendants 

used remotely created checks to take consumers' monies right out of their bank accounts36 

Many other FTC cases against fraudulent telemarketing operations contain similar facts. 37 

Seeking to protect consumers from such tactics, the FTC announced proposed 

amendments in 2013 to strengthen the Telemarketing Sales Rule by barring sellers and 

.15 For example, on April29, 2014, a federal judge sentenced Jamaican citizen Oneike 

Barnett to 60 months in prison for his role in a fraudulent lottery scheme that targeted elderly victims in 

the United States. Barnett, who pled guilty, acknowledged that he was a member of a conspiracy that 

called elderly victims, infonning them that they had supposedly won a large amount of money in a 

lottery. The fraudsters induced victims to pay bogus fees in advance of receiving their purported lottery 

winnings. In an effort to convince the victims that the lottery winnings were real, the conspirators sent 

written and electronic communications that claimed to be from the IRS and the Federal Reserve. See 

Press Release, U.S. Dep't of Justice, Jamaican Citizen Sentenced in Connection With International 

Lottery Scheme That Deji·auded Elderly Americans (Apr. 29, 2014), available at 

http://www.justice.goviopa/pr/20 14/ i\pril/14-civ-454.html. 

'

6 FTC v. First Consumers, et al., No. 14-1608 (E.D. Pa. Mar. 13, 2014), available at 

https:/lwww. ftc.gov/en forcement/cases-proceedings/132-3 291 /first-consumers-et-a!. 

37 Telemarketing Sales Rule, Notice of proposed rulemaking, Request for public comment 

(''NPR"), 78 Federal Register 131 (Jul. 9, 20!3), pp. 41207-09, available at https://www.ftc.gov/newsevents/press-reI eases/20 I 3 !0 5 !ftc-seeks-public-comment -proposa 1-ban-payment -methods-favored (last 

visited Oct. 13, 2015). 

12 
21 


telemarketers ti·om accepting four payment methods that may lack adequate protectionsremotely created checks, remotely created payment orders, cash-to-cash money transfers, and 

cash reload mechanisms. The proposed changes would prohibit telemarketers from dipping 

directly into consumer bank accounts by using unsigned checks and "payment orders" that have 

been created by the payee. The proposed amendments would also bar the usc in telemarketing of 

cash-to-cash money transfers or cash reload mechanisms38 that scammers rely on to get money 

quickly and anonymously from consumer victims.39 The public comment period has since 

closed and the rulemaking process is ongoing. 

IV. Consumer Education and Outreach 

Public outreach and education is another essential means to advance the FTC's consumer 

protection mission. The Commission's education and outreach programs reach tens of millions 

of people a year through our website, the media, and partner organizations that disseminate 

consumer information on the agency's behalf. The FTC delivers actionable, practical, plain 

language materials on dozens of issues, and updates its consumer education whenever it has new 

information to share. For example, the Commission's library of articles in English and Spanish 

38 A cash reload mechanism acts as a virtual deposit slip for consumers who wish to load 

funds onto a general-use prepaid debit card without using a bank transfer or direct deposit. A consumer 

simply pays cash, plus a small fee, to a retailer that sells cash load mechanisms such as MoneyPak or 

REioadit. In exchange, the consumer receives a unique access or authorization code that corresponds 

with the specific amount of funds paid. A consumer can use the authorization or access code to load the 

funds onto any existing prepaid debit card within the same prepaid network or an online account with 

payment intermediary (e.g. PayPal) using the phone or intemet. NPR, 78 Federal Register at pp. 41211, 

available at https:/ /www. fkgov /news-events/press-releases/20 13/05/ftc-seeks-public-comment-proposalban-pavmenHncthods-favored (last visited Oct. 13, 2015). Since the Commission issued this public 

notice, GreenDot voluntarily withdrew MoneyPak from the marketplace. Written Statement of Green Dot 

Corporation For U.S. Senate Special Committee on Aging Hearing "llanging Up on Phone Scams: 

Progress and Potential Solutions to this Scourge," 2 (July 16. 2014), available at 

http://www.aging.senate.gov/imolmedia/doc/Green Dot 7 16 14.pdf. 

39 Press Release. FTC Seeks Public Comment on Proposal to Ban Payment Methods 

Favored in Fraudulent Telemarketing Transactions (May 21, 2013), available at 

https://www.ftc.gov/news-events/press-releases/20 13/05/ftc-seeks-public-comrnent-proposal-banpavment-methods-favored. 

13 
22 


includes numerous pieces of particular relevance to seniors, including those specifically 

describing grandparent scams,40 prize and lottery fi·aud,41 medical alert scams.42 technical 

support scams,43 and government imposter fraud. 44 

In addition, the FTC recently created Pass It On, an innovative education effort aimed at 

active, older adults. Pass It On seeks to arm older people with information that they can "pass 

on" to family and friends who might need it. The materials and videos available at 

www.ftc.gov/PassltOn are direct and to the point, with a friendly and respectful tone informed 

by research about the target community's preferences. The materials cover topics such as 

imposter and health care scams, charity fi·aud, and identity thcft,45 all of which are available in 

40 See Family Emergency Scams, FTC, http://www.consumer.ftc.gov/media/audio-0052-

tamily-emergency-scams (last visited Oct. 13, 20 15); Family Emergency Scams. FTC, 

http://www.consumer.ftc.gov/articles/0204-familv-emergency-scams (last visited Oct. 13, 2015). 

41 See Prize Scams, FTC, http://www.consumer.ftc.govlarticles/O 199-prize-scams (last 

visited Oct. 13, 20 15). 

See Colleen Tressler, To Roboca/1 Scammers Who Lied About Free lvfedica/ Alert 

Devices: We 'vc Got Your Number, FTC (Jan. 13, 2014), http://www.consumer.ftc.gov/blog/robocallscammcrs-who-lied-about-free-medical-alert-devices-weve-l!Ot-your-number (last visited Oct. 13, 2015); 

Bridget Small, Robocal/ Scams Push Medical Alert Systems, FTC (July 18, 2013), 

http://www.consumer. ftc.gov/bloglrobocall-scams-push-medical-alert-systems (last visited Oct. 13. 

2015). 

43 See Lisa Schifferle, FTC Cracks Down on Tech Support Scams, FTC (Nov 19, 2014), 

http:/lwww.consumedk.gov/bloglftc-cracks-down-tech-support-scams (last visited Oct. 13, 20 15); 

Nicole Fleming, Getting Your J\lfoney Back After a Tech Support Scam, FTC (Nov. 13, 2013) 

http://www .consumer. ftc.gov/blog/getting-your-monev-back~after-tech-support-scam (la<;t visited Oct. 13, 

2015); Lesley Fair, At the Boiling Point About "Tech Support" Boiler Rooms, FTC (Oct. 3, 2012), 

https :I /www. ftc.gov In ews-events/bl ogslbus iness-b I og/20 12/ 1 0/boi I i ng-point -about-tech-sup port -boi I errooms (last visited Oct 13, 20 15). 

44 See Government Imposter Scams. FTC, http://www.consumer.ftc.gov/articles/0048-

government-imposter-scams (last visited Oct. 13, 20 15); Governmem Imposter Scams, FTC, 

http:l/www.consumer.ftc.gov/media/audio-0053-government-imposter-scams (last visited Oct. 13, 2015); 

Amy Hebert, Scammers Continuing to Pose as IRS Agents, FTC (May 29. 2014 ), 

http:/lwww.consumer. ftc.gov/blog/scammers-continuing-pose-irs-agents (last visited Oct. 13, 20 15); Lisa 

Lake, Fake IRS Collectors Are Calling, FTC (Apr. 7. 20 I 4), http:l/www.consumer.ftc.govlbloglfake-irscollectors-are-calling (last visited Oct. 13, 2015). 

45 The FTC's Pass It On materials include a folder containing one-page a11icles and 

bookmarks that explain, in easy-to-understand terminology, how six of the most popular scams work and 

steps consumers can take to avoid falling victim to these schemes. 

14 
23 


print in both English and Spanish. 

The Commission seeks to reach older adults through the facilities where they gather or 

live: libraries, social and civic clubs, senior centers, adult living communities, and veterans' 

facilities. The FTC recently mailed information to three thousand such facilities and within three 

days had orders from around the country for more than two thousand copies of the Pass It On 

printed materials. This confirmed the demand for clear, friendly, respectful education materials 

for older Americans. The Commission looks forward to continuing to share these materials with 

public and private sector organizations. 

Pass It On resources complement the FTC's other outreach and coordination activities on 

behalf of older people. For instance, we work extensively with the Elder Justice Coordinating 

Council to identify cross-agency initiatives to protect seniors from abuse, neglect, and 

exploitation, and other crimes 46 In 2012, the Commission also entered into an innovative 

program with the American Association of Retired Persons Foundation. Through this program, 

the FTC refers for individual peer counseling consumers over the age of 60 who have called the 

FTC's Consumer Response Center with complaints about certain frauds, including lottery, prize 

promotion, and grandparent scams47 The counseling provides older Americans with important 

support to help overcome the non-monetary impacts of being targeted by fraudsters. In the last 

six months, the FTC has referred over I ,000 consumers. In 2014, the AARP Foundation peer 

46 The Secretary of the Department of Health and Human Services ("DHHS'') convened the 

Elder Justice Coordinating Council in accordance with the Elder Justice Act of2009. The Council 

consists of heads of federal departments and other government entities, including the FTC, identified as 

having responsibilities, or administering programs, relating to elder abuse, neglect, and exploitation. The 

Council's mission is to develop recommendations to the DHHS Secretary for the coordination of relevant 

activities. See Elder Justice Coordinating Council, Facts, 

http: //1 tcom budsman. org/u pI oads!fi l es/iss ues/ e I der-j usti ce-coordi nati ng-counci 1-facts heel. pdf (last visited 

Oct. 13, 2015). 

47 The FTC only refers consumers who have consented to being contacted by the AARP. 

15 
24 


counselors successfully communicated with more than fourteen hundred people referred by the 

FTC, providing one-on-one advice and guidance to consumers to help them avoid future fraud. 48 

V. Conclusion 

The Commission is committed to protecting all consumers from fraud in the marketplace. 

To address scams that target older Americans, the agency will continue to employ a combination 

oflaw enforcement, informed policy proposals, and effective consumer education messages. 

Moreover, the Commission will continue to identify areas in which new policy and law 

enforcement approaches are warranted. The Commission looks forward to working with the 

Committee on this important issue. 

,g 

million. 

The consumers contacted by the Foundation counselors reported having lost nearly $19.5 

16 
25 

Mr. BURGESS. The Chair thanks the gentleman. 

Ms. Canan, you are recognized for 5 minutes for an opening 

statement, please. 

STATEMENT OF STACY CANAN 

Ms. CANAN. Thank you. Thank you, Chairman Burgess. 

Mr. BURGESS. Would you please check to see if your microphone 

is on? 

Ms. CANAN. Thank you. Can you hear me now? Great. 

Thank you. Thank you, Chairman Burgess, Ranking Member 

Schakowsky, and distinguished members of the subcommittee for 

this opportunity to speak with you today about the devastating 

problem of elder financial exploitation. 

My name is Stacy Canan. I am the Deputy Assistant Director in 

the Office for Older Americans at the Consumer Financial Protection Bureau. Our office is dedicated to providing older consumers 

with the tools they need to protect themselves from financial abuse 

and to make sound financial decisions. 

The evidence is clear, older Americans have assets that make 

them attractive targets of fraudsters. In 2011 the cumulative net 

worth of consumers age 65 and older was approximately $17.2 trillion. Older adults are victimized by a range of perpetrators, including scam artists, family members, caregivers, financial advisors, 

home repair contractors, and even court-appointed guardians. A national study found that an estimated 5.2 percent of Americans 60 

and older are exploited by a family member. Other studies show 

that most incidents of financial abuse go unreported and under the 

radar. Once the fraud occurs, of course, older Americans have little 

time and few resources to recoup lost savings. 

To address these serious challenges, we recognize that collaboration is critical. Among other things, the bureau participates, along 

with 11 other Federal agencies, in the Elder Justice Coordinating 

Council. The council fosters coordination of Federal agencies. For 

example, many of our initiatives support council recommendations. 

And this year the CFPB and the SEC jointly issued a consumer advisory on planning for diminished capacity and illness. The bureau 

also works on education initiatives with non-profits, community organizations, and industry groups, such as the Financial Services 

Roundtable and Meals on Wheels America. 

I would like to tell you about a few of our initiatives to combat 

elder financial exploitation. One is the Money Smart for Older 

Adults Program which we developed jointly with the FDIC. Money 

Smart is a train the trainer curriculum that teachers consumers 

and their caregivers about different types of fraud, scams, exploitation, and provides warning signs and tips that is used by a broad 

range of intermediaries, including State and local Governments, 

non-profits, and financial institutions. 

In October 2013, we released Managing Someone Else’s Money 

Guides. They assist people who are managing the finances for a 

family member or a friend who is unable to pay bills or make financial decisions. Many older Americans experience declining capacity to handle finances, which make them very vulnerable to 

fraudsters. 

26 

Twenty-two percent of Americans over age 70 have mild cognitive impairment. Even mild cognitive impairment can reduce an 

older person’s ability to detect fraud or a scam, thereby necessitating the need for a surrogate to handle their money. The guides 

that I mentioned are user friendly how-to guides that explain the 

fiduciary’s responsibilities and how to spot scams and exploitation. 

In 2013 the CFPB and seven other Federal agencies released 

interagency guidance to provide financial institutions with certainty about the legality of reporting suspected financial exploitation. The guidance encourages timely reporting to law enforcement, adult protective services, and other Federal and State and 

local agencies. The bureau also has additional resources that help 

protect older Americans against fraud. Ask CFPB is an interactive 

online tool that helps consumers find clear unbiased answers to 

their financial questions. It has served more than eight million 

visitors since March 2012. 

We also accept consumer complaints by phone, mail, fax, and 

through our Web site. As of September 30, 2015, the bureau handled over 726,000 complaints, of which approximately 63,000 were 

submitted by or on behalf of a consumer 62 years and older. 

Congressional leadership and support is critical to implementing 

a multifaceted solution to the serious problem of elder financial exploitation. We therefore commend this subcommittee for holding 

this hearing and look forward to continued information sharing 

with interested parties and stakeholders. Thank you very much. 

[The prepared statement of Ms. Canan follows:] 

27 


Testimony of Stacy Canan 

Deputy Assistant Director, Office for Older Americans 

Division of Consumer Education and Engagement 

Consumer Financial Protection Bureau 

Before the House Committee on Energy and Commerce, 

Subcommittee on Commerce, Manufacturing, and Trade 

October 23, 2015 

Thank you Chairman Burgess, Ranking Member Schakowsky, and distinguished members of the 

Subcommittee for the opportunity to speak with you today about the Consumer Financial 

Protection Bureau and its work to address the devastating problem of elder financial exploitation. 

My name is Stacy Canan, and I am the Deputy Assistant Director of the Office of Financial 

Protection for Older Americans at the Consumer Financial Protection Bureau. 1 an1 honored to 

represent the CFPB today. The Office of Older Americans is one of the offices within the 

Bureau's Division of Consumer Education and Engagement with a Congressional mandate to 

focus on a particular part of the U.S. population. The Associate Director of the Bureau's 

Division of Consumer Education and Engagement previously testified before this Subcommittee 

on the topic of elder financial exploitation on May 16, 2013. Today, I will update the 

Subcommittee on the Bureau's initiatives in this arena. 

CFPB Office for Older Americans 

The CFPB's Office for Older Americans is specifically dedicated to the financial health of 

Americans aged 62 and older. The Office's statutory mandate is to help provide consumers aged 

62 and over with the tools they need to protect themselves from financial abuse and to make 

sound financial decisions. 

The evidence is clear: older Americans have assets that make them attractive targets of 

traudsters. In 2011, the net worth of households headed by a consumer age 65 and older was 

approximately $17.2 trillion, and the median net worth was $170,500. 1 Older adults may be 

victimized by a broad range of perpetrators, including scam artists, family members, caregivers, 

financial advisers, home repair contractors, and fiduciaries such as agents under power of 

attorney and court-appointed guardians. For example, a national prevalence study found that an 

estimated 5.2 percent of Americans 60+ experience financial mistreatment by a family member.2 

1 See Census Bureau, Table 5. Mean Value of Assets for Households by Type of Asset Owned and Selected 

Characteristics: 2011 (2011), ln:p l]k' _\,\sidil!, L'-b' (last visited Oct. 

4, 2015). 2 Acierno, R,, et al., ·'Prevalence and Correlates of Emotional, Physical. Sexual and Financial Abuse and Potential 

Neglect in the United States: The National Elder Mistreatment Study," American Journal~{ Public Health 100(2): 

292-97, 

Page 1 of6 
28 


Other studies document that most incidents of elder financial abuse go unreported and •·under the 

radar."3 Once the fraud occurs, older Americans have little time and few resources to enable 

them to recoup lost savings. 4 

To address these serious challenges and carry out Congress' directives, the Office for Older 

Americans has placed a priority on preventing, detecting and redressing elder financial 

exploitation. In doing so, we have recognized that collaboration is critical. The Bureau 

participates, along with eleven other federal agencies, in the Congressionally-established Elder 

Justice Coordinating Council. The Council provides a forum to spotlight the disastrous impact 

of financial exploitation. The Council has heard from national experts and has developed a set of 

eight recommendations for increased federal involvement in addressing elder abuse, neglect, and 

exploitation5 Several of the Office for Older Americans' projects support the Council's 

recommendations, including the Managing Someone Else's Money guides and the Money Smart 

for Older Adults (MSOA) program, which I describe in my testimony today. In addition, the 

Council provides an opportunity for member agencies to develop joint projects addressing elder 

abuse. For example, the CFPB and the Securities and Exchange Commission (SEC) jointly 

developed and issued a Consumer Advisory and Investor Bulletin on planning for diminished 

capacity and illness 6 

In addition to working with our partners in government, the Bureau engages with non-profits, 

community organizations and industry groups. For example, in January, 2015, we launched a 

joint initiative with the Financial Services Roundtable to promote effective financial education 

across the country, with a key focus on protecting older Americans from financial exploitation.7 

One outcome of that collaboration is a new Financial Services Roundtable website featuring 

CFPB fublications aimed at preventing, recognizing and reporting financial abuse of older 

adults. In the non-profit sector, we are working collaboratively with the national organization 

Yfeals on Wheels America to provide consumer education content for their publications. In 

addition, we conducted a wcbinar about elder financial exploitation for their staff and for the 

community-based senior nutrition programs across the country with which they work. 

3 Lifespan of Greater Rochester, Inc .. eta!., Under the Radar: New York State Elder Abuse Prevention Study 

(Rochester, NY: Lifespan of Greater Rochester, Inc., May 2011). 4 Robe11 E. Roush, et al., Why Clinicians Need to Know about the Elder Investment Fraud and Financial 

Exploitation Program, 36 Generations (Issue No.2, Summer 2012), at 94-97. 5 

Page 2 of6 
29 


Office for Older Americans' Initiatives 

In addition to work with our partners, the CFPB's Office for Older Americans is also combatting 

elder financial exploitation by identifying specific challenges and developing initiatives to 

respond to those challenges. 

• PROBLEM: Older Americans, their caregivers, and others in the community don't know 

how to spot and avoid frauds and scams. 

o CFPB INITIATIVE: The Office for Older Americans developed an awareness 

program called Money Smart for Older Adults, in collaboration with the Federal 

Deposit Insurance Corporation (FDIC). Released in June 2013, this community 

education program uses the FDIC's well established Money Smart training 

approach. The Office for Older Americans and the FDIC have developed trainthe-trainer materials and offer in-person and webinar training sessions. MSOA is 

being delivered to consumers through a broad range of intermediaries, including 

state and local governments as well as nonprofit and financial service 

organizations in 49 states. The materials include a Participant/Resource Guide 

that can be used by people who do not attend a local training. The 

Participant/Resource Guide presents information about different types of fraud, 

scams, and exploitation that target older people and provides warning signs and 

tips on how to prevent losses and report cases9 To increase the reach of this 

program, the Bureau and FDIC have made the module available in Spanish and 

are updating the MSOA content. 

• PROBLEM: Many older Ameli cans experience declining capacity to handle finances, 

which can make them vulnerable. Even mild cognitive impainnent greatly reduces an 

older adult's ability to detect fraud or a scam; 22 percent of Americans over 70 have mild 

CO!,'llitive impairment. 10 One in nine Americans aged 65+ has Alzheimer's disease. 11 

While many older Americans retain full financial capacity, those with diminished 

capacity often need a surrogate to handle their money. Those "lay fiduciaries" are a 

critical source of help and support, but often have no training. Some even engage in 

fraud. 

o CFPB INITIATIVE: In October, 2013, we released four Managing Someone 

Else's Money guides to assist people who are managing money or property for a 

9 The Participant/Resource Guide is available for download at \'\lll"LJHH:r fn1,Jl!'-:t>g .• w .r ~P(L l t1:l~ ,Jll~~.\1 

p:\rl!clp:uli ·gi!ldc fhlf or for order at pnlJ1\IltHl!i" u;a g\)i (!J~hJ Uh .... htnt!. Instructor materials are available from the 

FDIC at '-'P:l:'>umvl:-. c• 1lhUl1li'1 iU(l1h .. '\--.ll1Jrt ,,!dc'l'Jdul: hunl. 10 B.L. Plassman et al., ''Prevalence ofC~gnitiv~ lmpainnent without Dementia in the United States," Archives of 

Internal Medicine 148, no. 6: 427-34. 11 Alzheimer's Association, 2015 Alzheimer's Disease Facts and Figures, 

hnp•, \\\\\\.::1.~: dcl\\!lL'J(h f<h'!" ".pd1. 

Page 3 of6 
30 


family member or friend who is unable to pay bills or make financial decisions. 

These user-friendly "how-to" guides are for agents under a power of attorney, 

court-appointed guardians and conservators, trustees, and government benefit 

fiduciaries. The guides explain the duties and responsibilities of people acting in 

each of these fiduciary roles and teach them how to watch out for scams and 

financial exploitation. The guides also explain what to do if a family member or 

friend becomes a victim, and where to go for help. The guides are available in 

English and Spanish on the Bureau's website, consumcrfinance.gov, and can be 

ordered individually or in bulk at no charge. 12 We have already distributed over 

650,000 hard copies of these guides nationally. 

Because people's powers and duties overseeing another person's finances vary 

from state to state, the Bureau has learned that people need more than a one-sizefits-all guide. In the second phase of the Managing Someone Else's Money 

initiative, we are releasing state-specific guides for six states: Arizona, Florida, 

Georgia, Illinois, Oregon, and Virginia. The Bureau released the Virginia guides 

in August 2015 and the Florida guides in September 2015. We expect to release 

the additional guides in 2016. The Bureau also developed a replication manual to 

enable experts in the remaining 44 states and territories to create similar sets of 

state-specific guides. The Bureau released tips and templates for replication on 

October 19,2015. 

• PROBLEM: Residents of assisted living and nursing facilities can become victims of 

fraud and financial abuse. The operators of those facilities may see that bills are going 

unpaid and residents are threatened with eviction, but they don't know how to intervene 

in cases of financial exploitation. Spotting the exploitation before it drains the senior's 

funds is in everyone's interest. 

o CFPB INITIATIVE: In June 2014, the Bureau released a national guide for 

operators of residential care facilities. This guide, entitled, Protecting Residents 

from Financial Exploitation: A Manual for Assisted Living and Nursing 

Facilities, 13 provides facility personnel with information to help them identify 

warning signs of financial exploitation and a model protocol for intervening to 

prevent significant losses to victims. Bureau staff have made numerous 

presentations and conducted webinars about the manual for national 

organizations, including industry trade groups and organizations oflong-term care 

ombudsmen. 

• PROBLEM: Financial institution personnel observe signs that an older account holder 

may be the victim of financial abuse, but they may be unsure whether federal privacy 

12 See 

D lH\p, 

Page 4 of6 
31 


laws permit them to share their suspicions with social service and law enforcement 

agencies. 

o The Office for Older Americans, working with the Bureau's Office for 

Supervision Policy and with other federal regulators, developed interagency 

guidance for financial institutions to clarify the applicability of the privacy 

provisions of the Gramm-Leach-Bliley Act (GLBA) to their reporting of 

suspected financial exploitation of older adults. Eight federal regulatory agencies 

with authority to enforce the privacy provisions ofGLBAjointly released the 

guidance on September 24,2013. 14 The goal of the guidance is to provide 

financial institutions more certainty about the legality of reporting suspected 

abuse, thereby facilitating financial institutions' timely reporting of suspected 

abuse to law enforcement, Adult Protective Services and other federal, state and 

local agencies. Reporting by financial institutions enables officials in a variety of 

capacities to take appropriate protective action. (Following the issuance of the 

Interagency Guidance, several state regulators have taken similar action on the 

state level.) 15 

Financial institutions are especially well-positioned to spot signs of elder financial 

abuse; for that reason, CFPB will release an advisory to encourage financial 

institutions to prevent, recognize, and report elder financial abuse. The advisory 

will recommend an array of practices to assist financial institutions in protecting 

their elder account holders. The Bureau plans to release the advisory in 2016. 

Other CFPB Resources for Older Americans 

The Bureau also has additional resources that can help protect older Americans against fraud. 

First, Ask CFPB16 is an interactive online tool on our website, consumerfinance.gov, that helps 

consumers find clear, unbiased answers to their financial questions. As soon as a consumer 

begins typing in a question, the database's autocomplete feature begins to provide various search 

suggestions. Users can also browse product categories and tags. From any search page, they can 

narrow their choices by specific topics, such as "fees" or "closing," or by populations, like 

servicemembers, students, and older Americans. Under the "older Americans" tag, a consumer 

easily can find answers to questions about financial products and services, powers of attorney, 

14 See Interagency Guidance on Privacy Laws and Repor/ing Financial Abuse of Older Adults (Sept. 24, 2013), 

available at 1)ttp: Jlk" ~ (<JbHm~:rlman..::l· .g\1\ .::o! ckk_r-ab_t!\~_·:guJthmc_'(.1~~}f. The eight agencies are the 

Board of Governors of the Federal Reserve System, Commodity Futures Trading Commission, the CFPB, the 

FDIC, the Federal Trade Commission, the National Credit Union Administration, the Office of the Comptroller of 

the Currency, and tl1e Securities and Exchange Commission. 1

' See, e.g., New York State Department of Financial Services, Guidance for Financial Institutions on Preventing 

Elder Financial Exploitation (2015) !JtljJ: \\\\\\ .1Jf-.. n\ <ll:_{~_tJ! J)IY""2til._~ 

!(i l1!ip \\ l'\H1-.nilW1 !'1!l~lllc'V <l"~~'lj>b 

Page 5 of6 
32 


accepting assistance with bill-paying and banking, as well as tips to avoid financial harm. Ask 

CFPB has served more than eight million visitors since its launch in March 2012. 

We also have an Office of Consumer Response, which accepts consumer complaints by phone, 

mail, and fax and through our website. Currently, Consumer Response handles complaints about 

credit cards, prepaid cards, credit reports, money transfers, mortgages, bank accounts and 

services, vehicle loans and leases, payday loans, other consumer loans, debt collection and 

student loans. If older consumers encounter unfair, deceptive or abusive, or discriminatory 

activities by providers of these products and services and they wish to submit a complaint, the 

Bureau will forward their complaint to the company and work to get a response from them. If 

we detennine that another government agency would be better able to assist, we will forward the 

complaint to them and let the consumer know. As of September 30, 2015, the Bureau handled 

over 726,000 complaints, of which approximately 63,415 were filed by or on behalf of 

consumers age 62 and over. 

Conclusion 

Congressional leadership and support is critical to implementing a multi-faceted solution to the 

serious problem of elder financial exploitation. We commend the Chairman, the Ranking 

Member and other members of this Subcommittee for holding this hearing to spotlight the 

serious issue of elder financial exploitation. !look forward to continued information sharing 

with interested parties and stakeholders on this important topic. 

Thank you for the opportunity to present this testimony. 

Page6of6 
33 

Mr. BURGESS. The Chair thanks the gentlelady. 

Mr. Harris, you are recognized for 5 minutes for an opening 

statement, please. 

STATEMENT OF ROBERT F. HARRIS 

Mr. HARRIS. Good morning, Dr. Burgess, chairman of this committee, Ranking Member Congresswoman Schakowsky, and members of the Commerce, Manufacturing, and Trade Subcommittee. 

My name is Robert Harris, and I am a lawyer, and I am the 

Cook County Public Guardian in Chicago. I was appointed in 2004 

by the Chief Judge of the Circuit Court of Cook County to act as 

the guardian for people with Alzheimer’s and dementia. 

I am here today to discuss the issue confronting hundreds of people under my guardianship who have severe forms of dementia and 

Alzheimer’s and have been financially exploited. My office serves 

approximately 600 people right now as the guardian of last resort 

for people without family or others to care for them. The average 

age is 72, the oldest is 103, and around 70 of them are over 90 

years old. Our goal is to maintain them in their own homes or in 

a community setting. And for approximately one-third of those people, we are able to do so with their own assets. 

At this point, most of them have bought homes, saved money for 

their golden years. Unfortunately, there are people who view them 

as potential victims. And the problem is so widespread that at least 

a third of our intake cases have some form of financial exploitation. 

It doesn’t matter if they have large estates worth over a million 

dollars or if they simply have a house that is worth $25,000. 

Another unfortunate fact is the exploiters can be anyone. Family 

members, agents acting under their power of attorney, bank tellers, 

attorneys, clergy, caregivers, long-time friends. We have had cases 

involving police officers, and strangers and others who either have 

or obtain a position of trust for the elderly victims. 

To combat and recover assets, stolen from the people we serve, 

we do several things. We work with law enforcement, adult protective service agencies, and fraud protection departments of financial 

institutions. We work with the media to shed light on the problem 

within the public, and we speak at various community organizations to educate their constituents about the problem. 

One of our strongest and chief tools that we use is development 

of a financial recovery unit that we call FRU. We have three fulltime attorneys who file citation actions pursuant to the Illinois Probate Act and other causes of action to recover stolen, converted, 

embezzled, or concealed assets. Over the past 10 years that we 

have worked on this particular issue, the unit has recovered almost 

$50 million in money, houses, and other properties for the people 

under my guardianship to be able to use for their care to maintain 

them in the community. 

The types of scams that we see include, executing fraudulent 

deeds, unduly influencing the elderly individual to sign of over 

their property, or using a power of attorney to empty their bank 

accounts. The almost $50 million that we have recovered for people 

under my guardianship is just the tip of the iceberg. And I am sure 

that it is only a tiny fraction of the money that individuals have 

been exploited of, in and around Chicago. 

34 

Some of our suggested solutions are, to help local Governments 

establish offices such as mine, or legal clinics to establish practices 

that help people who have been exploited. Whether they come into 

the court system or whether they simply need help and aren’t involved in a Probate Court case. 

Educate seniors in the public regarding the dangers of financial 

exploitation through community organizations, and places of worship and community centers, and resources that might be available 

to them. To utilize organizations like the National Guardianship 

Association to play an important role by promoting standards best 

practices for guardians and probate courts, by providing education 

and training and provide advocacy on the issue that impact seniors 

including elder use and financial exploitation. 

Develop court systems and processes that don’t work against seniors and consider the urgency of time for the elderly, such as the 

probate and the Elder Lawyer and Miscellaneous Remedies Courts 

in Chicago. Because many exploiters simply try to wait out the life 

span of the elderly victims. 

You have the written materials that I have submitted that are 

premised in large part on an article that my Deputy Public Guardian, Charles Golbert, wrote for Van der Plas Publishers, and I 

would be happy to share our experiences with individual cases. 

[The prepared statement of Mr. Harris follows:] 

35 


COMBATING FINANCIAL ABUSE OF THE ELDERLY: 

THE EXPERIENCE OF THE COOK COUNTY PUBLIC GUARDIAN OFFICE, 

ILLINOIS, U.S. 

Good morning Dr. Burgess Chairman of this committee, Ranking Member Congresswoman 

Schakowsky, and all of the members of the committee. I am very honored to being invited to 

share the experiences that my office has had with the financial exploitation of the elderly 

individuals that we serve. 

I am the Cook County Public Guardian. an attorney, and I was appointed by the Chief Judge of 

the Circuit Court of Cook County, Timothy Evans in 2004. The Office of the Cook County 

Public Guardian in Chicago is a county based law office that acts as the attorney and guardian ad 

litem for approximately 6000 children in Cook County's abuse and neglect courts; guardian for 

adults with cognitive disabilities such as dementia and Alzheimer's disease; and as the child 

representative for approximately 600 children in contentious custody and divorce cases. We are 

unique in the country for combining the representative of children and the elderly. 

For the purposes of this hearing, I will focus on our work in the Adult Guardianship Division of 

the office and the l'inancial Recovery Unit which has recovered approximately $50 million in 

assets stolen ti·om the people we serve. The Adult Guardianship Division of the Public 

Guardian's Office, serves as the guardian of last resort for some 600, mostly elderly people with 

cognitive disabilities such dementia and Alzheimer's disease who need a guardian but who have 

no appropriate family member to serve as their guardian'. With an interdisciplinary staff of more 

than 80 people" (including attorneys, social workers, MBAs, financial services personnel, 

paralegals, and support staff) and we manage nearly $100 million in assets (cash, real and 

personal property) that belongs to the people under my guardianship"', it is one of the largest 

public guardianship offices in the United States."' The average age tor the people we serve is 72 

(the youngest is 21 and the oldest 103), approximately 70 are of over 90 years old. Our goal is to 

maintain them in their own homes or in a community setting, with approximately 1/3 of them 

living in the community. 

Unfortunately. we see elder abuse, neglect, and financial exploitation every day. Each year, our 

intake referrals ret1ect a growing percentage of new cases with abuse, neglect. or financial 

exploitation. 

To give a t1avor of how widespread the problem has become, in more than a third of our new 

intake cases, elder individuals had been financially exploited before the case was referred to our 

office.v That is just looking at tinancial exploitation, and it does not include new intake referrals 

with issues of abuse or neglect. Of course, in many of the financial exploitation referrals, the 

elder had also been neglected or abused physically or emotionally. Some of the people we serve 
36 


had been swindled out of virtually every cent, including their longtime family homes, before they 

came to the attention of authorities and were referred to our office. v' 

The experience of our office is consistent with national trends. According to a 2011 joint study 

by the National Committee for the Prevention of Elder Abuse, Virginia Tech University, and the 

Met!ife Mature Market Institute known as the Met life Study- the loss by victim of elder 

financial abuse in the United States in 2010 was at least $2.9 billion. v" That represents a 12% 

increase from just two years earlier, 2008, when the amount was $2.6 billion."" 

As disturbing as these numbers are, they are likely low, as elder financial abuse remains 

underreported, under-recognized, and under-prosecuted." In his treatise, Alzheimer's and the 

Law, Kerry Peck observes that seniors often do not report financial and other abuse for a variety 

of reasons including embarrassment, fear of being placed in a nursing home ifthe exploiter is a 

relative or caregiver or if the elder is deemed unable to manage his or her money, and fear of 

turning in the abuser.' He further observes that the abuser often knows, and takes advantage of, 

this fact." 

Older women in the United States are twice as likely to be victims of financial exploitation as 

older men."' Most victims are between the ages of 80 and 89, live alone, and need some level of 

assistance."" In other words, the exploiters seek out, find, and prey on the most vulnerable and 

isolated members of our society. 

Referring to elder financial abuse as the "Crime of the 21 s< Century,''''v the Metlife Study found 

that financial exploitation engenders health care inequities, fractures families, increases mental 

health issues among elders, and results in the loss of human rights and dignity." Elder financial 

exploitation often occurs in combination with physical abuse."' Pick notes empirical evidence 

that when a senior has been a victim of a crime, it can hasten their death.";' 

On a more positive note, the Metlife Study observed that the recently passed Elder Justice Act 

xv"'has the potential to make a real difference in reducing elder abuse, including elder tlnancial 

exploitation, in the United States."' 

To combat the growing problem of elder financial exploitation, the Cook County Public 

Guardian's Office created more than a decade ago a specialized unit of three senior attorneys 

whose full-time practice is to litigate complex cases against financial exploiters and to recover 

money and property stolen from the people we serve before we become their guardian. 

Over the years, the lawyers in this unit have litigated hundreds of recovery lawsuits. The 

respondents in our litigation have included, inter alia, family members, "friends," financial 

advisors, accountants, business partners, landlords, tenants, neighbors, prior guardians, agents 

2 
37 


under purported powers of attorney, home repair personnel, bank tellers, police officers, clergy, 

caregivers, doctors, nurses, and most unfortunately, longtime trusted family attorneys. In the 

majority of cases, the exploiter was someone in a unique position of trust or authority over the 

elder. Again, our experience is consistent with national trends. " 

Examples of scams that we have encountered include: Forged and fraudulent deeds transferring 

property to a third party; Drafting and execution of new estate planning documents; Conversion 

of money and personal property; Construction and home repair scams. 

The Financial Recovery Unit has been tremendously successful. Over the past ten years, we 

have recovered nearly $50 million for the people we serve. We arc then able to usc the money to 

take care of them in their golden years. In appropriate cases, we pursue and obtain punitive 

damages against the exploiters. It is particular satisfying when we are able to recover a longtime 

home and move the individual back into the place that brings them comfort and holds so many 

memories tor them. 

In the process, we have won significant victories in the Illinois Supreme Court and the Appellate 

Court that have resulted in favorable precedential published opinions."' Some of our cases have 

resulted in legislative initiatives to protect seniors."" We have also called attention to the 

problem of elder financial abuse through extensive positive coverage of our cases in the news 

media.""' One of our financial recovery cases was featured in the award-winning documentary 

film Forbidden Lie$."" 

We believe that our office has the largest financial exploitation recovery practice of its kind in 

the country in terms of the number of cases litigated and amount of money recovered. We would 

like to see the program replicated in other jurisdictions."v 

Some suggested solutions: 

I) Educate seniors and the public regarding the dangers of financial exploitation through 

local community organizations, places of worship and community centers. Ask family 

members to check in on elderly relatives and friends to ensure that unscrupulous or 

strangers haven't insinuated themselves into the elderly individual's life. 

2) Utilize organizations like the National Guardianship Association (NGA) to play an 

important role by promoting standards of best practices for guardians and probate courts; 

by providing education and training; and by providing advocacy on issues that impact 

seniors including elder abuse and financial exploitation. My Deputy of my Adult 

Guardianship Division serves on NGJ\'s national board of directors and other attorneys in 

my office hold key leadership positions in other national organizations that focus on these 

issues. 

3 
38 


3) Develop court systems and processes that don't work against seniors and consider the 

urgency of time for the elderly-such as the Elder Law and Miscellaneous Remedies 

court in Chicago. Many exploiters try to simply wait out the life span of older victims 

through lengthy court proceedings. 

'OFFICE OF THE COOK COLJNTY PUBLIC GUARDIAN, http://www.publicguardian/about/ 

"Charles P. Go I bert, Justice for Children, Adults with Disabilities, and the Elderly: Reflections 

from 15 Years as an Attorney with the Office of the Public Guardian of Cook County, Jllinois, 1 

DePaul J. for Soc. Just. 69 (2007) 

'"OFFICE OF THE COOK COUNTY PUBLIC GUARDIAN, 

http://www.publicguardian.org/guardianship/aboutl. 

" Charles P. Golbert, Health Care Surrogate Decision Making and Bioethics: Case Studies from 

the Files oft he Office of the Cook County Public Guardian, 6 NAELA J. !55 (2010). 

'OFFICE OF THE COOK COUNTY PUBLIC GUARDIAN, http://www.public 

guardian.org/guardianship/about/. 

"Charles P. Golbert, Using the Probate Act to Recover Assets Stolenfrom Persons with 

Disabilities, 88 ILL B.J. 510 (Sept. 20 I 0). 

vu THE METL!FE MATURE MARKET INSTITUTE ET AL., METLIFE STUDY OF ELDER 

FINANCIAL ABUSE: CRIMES OF OCCASION, DESPERATION, AND PREDATION 

AGAINST AMERICA'S ELDERS 2, 7 (June 2011), available at 

www.mctli(e.com/mmilrsearch/elder-financial-abuse.htmll+kev, [hereinafter METLIFE STUDY]. 

Vlll fd 

"!d. at 3-4, 16, 23. 

'KERRY PECK & RICK L. LAW, ALZHEIMER'S AND THE LAW: COUNSELING 

CLIENTS WITH EMENTIA AND THEIR FAMILIES, 285, 309 (Is' ed. 2013). 

"Jd. at 309. 

"' METLIFE STUDY, supra note 7 at 3, 8, 16. 

"" ld. at 3, 8, 16, 22. 

"' !d. at5. 

" !d. at4, 23. 

"' ld. at3, 17-18. 

xvn PECK & LAW, supra note 10, at 314. 

""' 42 U.S.C. §§ 132b-25 (2014); 42 U.S.C. §§ 1395i-3a (2014); 42 U.S.C. §§ 1397j-1397m-5 

(2014). > 

'"ME LIFE STUDY, surpa note 7, at 4, 19-2!. For an excellent article about the history and 

substance of the Elder Justice Act, and its potential to curb elder abuse, see Brian W. Lindberg, 

Charles P Sabatino, & Robert Blancato, Binging National Action to a National Disgrace: The 

History oft he Elder Justice Act, 7 NAELA J. 105 (2011). 

"See PECK & LAW, supra note I 0, at 290 (the majority of financial exploiters are in a unique 

position to take advantage of the elder such as fiduciaries, family members, and trusted members 

of society). 

"'See, e.g., In rc Estate of Powell v. Wunsch, 2014!L 1!5997, !2 N.E.3d 14 (Ill. 2014); In re 

Marriage of King, 802 N.E.2d 12!6 (Ill. 2004); In re Estate of Davies v. Pasamba, 2014 !LApp 

4 
39 


(1 ") 133551, 17 01.E.3d 763 (lll. App. Ct. 2014); In re Estate ofHoellen v. Owsley, 854 N.E.2d 

774 (Ill. App. Ct. 2006). 

""See generally Janna S. Dutton eta!., CBA Subcommittee Achieves Protections for the Elderly, 

15 C. B.A. REC. 20 (Jan. 2001 ); Robert F. Harris ct a!., if11en Disabled Homeowners Lose Their 

Homes For A Pittance in Unpaid Property Ta'Ces: Some Lessons From In re Mary Lowe, 5 

NAELA J. 190-91 (2009); see also OFFICE OF THE COOK COUNTY PUBLIC GUARDIAN, 

http://www.publicguaridan.org/guardianship/developments (last visited Nov. 17, 20 !4) 

·"'"See, e.g., Tina Sfondeles, Cop Accused ofForging $20,000 Check from Man with Dementia, 

CHI. SUN-TIMES, Dec. 28, 2013, at§ l, p. 5; David Jackson, Lawyer Punished in Elder Cases: 

License Suspended Ajier Allegations of Financial Misdeeds, CHI. TRIB., Jan 24, 20!3, at§ I, p. 

9; Jason Meisner & Annie Sweeney, Brothers Get 14 Years in Fraud Case: Judge Lambastes 

'Financial Vampires;' For Preying on Vulnerable Targets, CHI. TR!B., Nov. !4, 2012, at § l, p. 

4; Cynthia Dizikes & David Jackson, Bill Due for Nonprofit Chief Public Guardian Wants 

CEO Robert Wharton Jailed Afier Dej(llllt on $71.000 He Owes to Disabled Ex-Secretary, CHI. 

TRIB., Jan. l 0, 2012, at § l, p. l; David Jackson, Priest Investigated Over Estate Deal: With 

Help From Law Firms Pastor Obtained Ownership of Elderlv Parishioner's Home, CHI. TR!B., 

Feb. 14, 20 II, at § l, p. 7; Serena Maria Daniels, Disabled Man's Fortune Stolen: Authorities 

Say Savings Drained By Family Friends, CHI. TRIB., Sept. 23, 20!0, at§ l, p. II; Annie 

Sweeney, Cop Probed in Senior's Mission S400K: Officer Assigned to Help Elderly Residents 

But that 'Nice' Teller was Siphoning Away 86-Year-Old Jessie McDonald's Cash, the Public 

Guardian's Office Says And So Far Chase Hasn't Paid It Back, CHI. SUN-TIMES, June 24, 

2008, at § I, p. 8; Susan Chandler, This House Was a Steal: flow Fraud Led to This Property 

Changing Hands Three Times as Son of Owner Sat Dead Inside, CHI. TRIP., Feb. 24, 2008, at§ 

l, p. I; Lorene Y ue, Widow's Finances Run Dry: Neighbor Allegedly Bled Retiree Big-Time, 

CHI. TR!B., Oct. 12, 2005, at § 2, p. l; Debra Picket. Discredited Author Accused of Ripping 

0/fElderfy Neighbor, CHI. SUN-TIMES, Aug. 22, 2004, at§ 1, p. 14. 

""Forbidden LieS (World Cinema 2007). 

'"OFFICE OF THE COOK COUNTY PUBLIC GUARDIAN, 

http://www.publichguardian.org/guardianship/about/ (last visited Nov. 17, 20 14). More 

information about the financial exploitation recovery practice of the Office of the Cook County 

Public Guardian, and some of the cases litigated, can be found at Cook County Public Guardian, 

www.publicguardian.org/guardianship/about/departments/; 

www.publicguardian.or/guardiansihp/about/success-stories/ (last visited Nov. 17, 20 14). See 

also Charles P. Golbert, Justice jhr Children, Adult with Disabilities, and Elderly: Reflections 

from I 5 Years as an Attorney with the Office I!( the Public Guardian of Cook County Illinois, I 

DEPAUL J. FOR SOC. JUST. 69-79 (2007); Charles P. Golbert, Using the Probate Act to 

Recover Assets Stolen from Persons with Disabilities, 88 ILL. B.J. 510, 517 (2010) 

5 
40 

Mr. BURGESS. The gentleman yields back. The Chair thanks the 

gentleman. 

And thanks all of our witnesses for your testimony. And we will 

move into our question portion of the hearing. I will begin the 

questioning by recognizing myself for 5 minutes. 

Mr. Harris, I just have to ask you, and, I mean, I learn so much 

in this subcommittee. A fraudulent deed? What happens with that? 

Someone comes door to door and says: I will sell you some property? 

Mr. HARRIS. Well, no, actually what they do sometimes is they 

do quitclaim deeds from the person, the elderly person. They forge 

those deeds, write their own names in, or deed it to a third party. 

And then they record it against the property. And sometimes those 

elderly people never know about the crime, and then one day someone shows up and they no longer own their homes. 

Mr. BURGESS. Someone has purchased the home? 

Mr. HARRIS. Actually, they have not purchased the home, they 

have just developed a deed and recorded it against their property. 

Mr. BURGESS. And you are able to intervene on behalf of that 

person? 

Mr. HARRIS. Oh, yes. Well, what happens is, if a case is referred 

to our office and the person qualifies, first of all, they have to have 

a cognitive impairment that is severe enough to qualify for our 

services, we would file something like a citation action to recover 

their property that has been wrongfully taken from them. 

Mr. BURGESS. Are there other people within your county who 

would, if someone wasn’t suffering from a cognitive impairment, 

where that could be remedied? 

Mr. HARRIS. Yes. There is a Legal Assistance Foundation that we 

have in Chicago that also have a fraud department, and there are 

a couple of attorneys that work on cases for people who don’t have 

guardians. Sometimes they are referred to us if there is a need for 

a guardian. But often they just have people that walk in. 

But the office is very small. And one of the biggest issues I think 

that we are confronted with are not just on the deed, the fraudulent deed cases, but some of the people that we work with make 

the worst witnesses because of their cognitive impairment, whether 

this is severe or not. And so they need more help. Sometimes these 

are very intensive, document-intensive, financial-intensive cases 

that requires a lot of work and detail. 

Mr. BURGESS. Thank you. 

Mr. Kaufmann, thank you for being here this morning. And certainly I want to thank the FTC for always been willing to come and 

talk to our subcommittee and having us over to your offices earlier 

in the year, and having me to your regional offices down in Dallas, 

and that was all very helpful and I have learned about a number 

of resources that are available. 

Let me just ask you a question about your involvement when you 

have a foreign agency involved, a telemarketing scheme, something 

called the Jamaican Lottery, which I am not sure I understand 

what it is, but what enforcement tools do you have to be able to 

put a stop to these practices, and what have you learned about 

multijurisdictional enforcement? 

41 

Mr. KAUFMAN. Thank you for the question. Multi-jurisdictional 

enforcement is challenging. There are impediments when fraud is 

emanating from overseas to the United States. The tools that this 

committee have given us is the U.S. Safe Web Act have provided 

assistance, but we have also worked closely and built stronger relationships with law enforcement authorities in other countries, in 

Canada, in the United Kingdom. 

If we talk about Jamaica, we have seen a lot of prize and lottery 

scams in particular emanating from Jamaica. And we have a specific group who are involved in called JOLT, which is a number of 

law enforcement agencies in the United States and Jamaican authorities to help assist the Jamaicans in prosecuting these kind of 

cases there, as well as prosecuting cases in the United States. But 

there are challenges with these issues. 

Mr. BURGESS. Let me ask both you and Ms. Canan, what do you 

have at your disposal for spotting trends so that you might anticipate if something is happening in one location that it might metastasize or migrate to another location? Are there tools that you have 

where you can keep track of things that are popping up on the 

radar screen? 

Mr. KAUFMAN. Absolutely. Our primary tool, I would say, is our 

Consumer Sentinel Database. We get complaints from many consumers. We also get complaints from many other law enforcement 

agencies and entities such as the Better Business Bureau, and we 

routinely track, analyze, and look for trends and look for increasing 

spikes in order to find targets to pursue. 

Mr. BURGESS. And Ms. Canan, at the CFPB? 

Ms. CANAN. Yes. And I mentioned in my testimony that we have 

a consumer response department where we accept complaints from 

consumers. And our office, the Office for Older Americans, we look 

at the complaints that are submitted by and on behalf of older consumers routinely and look for trends and spikes as well. 

Some of the, you know, the information that we cull from the 

complaints, if appropriate, we send to our enforcement division. We 

also will develop education materials, depending on what we find. 

Mr. BURGESS. Well, part of the purpose of having this hearing, 

or course, is the expository nature of the services that you all have. 

I will tell you, as a regular guy, when I was caring for my parents 

as they aged, I had no idea about the types of services that were 

available, nor would I have been completely cognizant of the risks 

that were out there. 

And looking back on 10 or 15 years ago, I realize there were 

probably some near misses. But I really hope what this subcommittee hearing does today is make people, number one, aware 

of the problem, and, number two, aware of where they can go for 

help if they think they have been victimized. 

I yield now to the gentlelady from Illinois, the ranking member 

of the subcommittee. 

Ms. SCHAKOWSKY. Thank you, Mr. Chairman, and I appreciate 

your last comment. And hopefully we really can work together to 

drill down on this. 

I wanted to ask Mr. Harris a question. You said that you are 

guardian for 600 people. How do those people get to you? How does 

that happen? 

42 

Mr. HARRIS. We often have referrals from judges. A senior will 

come into a housing court and have an issue, and we will be called 

by a judge. Law enforcement. We have had referrals from banking 

institutions as well. Neighbors. All sorts of people. 

Ms. SCHAKOWSKY. So would you estimate that there are a lot of 

people out there who do not have the benefit of your guardianship? 

Mr. HARRIS. Yes. I do. A lot of people who either are fearful, and 

there is a lot of people out there that are fearful even to call our 

office, because they believe that the Government stepping in is 

going to be a bad thing for them. 

So I think that if there is an appropriate person out there, a 

friend or a family member that can help them, I think that is always the preferable way to go. But I think we do offer some services that specifically are FRU unit that is able to help people that 

is unlike probably any other organization in our city and our State. 

Ms. SCHAKOWSKY. You had said that a third of the people, so 

that would be about 200 of those, are victims of some form of exploitation, financial exploitation. Did you say by families? 

Mr. HARRIS. By family members. But often it is a lot of other 

people. There is a lot of strangers that do it, but there is a lot of 

people that hold great positions of trust that end up doing it, and 

unfortunately it can be a family member. 

Ms. SCHAKOWSKY. Yes. I am wondering if you could describe 

some of the types of financial exploitation that seniors under your 

care have experienced. 

Mr. HARRIS. Sure. I remember a young lady—young lady to me. 

She is older, but she is still young in spirit—who was exploited by 

a woman who styled herself as her personal banker. She would go 

to the same bank, downtown Chicago, large banking institution, for 

years. She worked for R.R. Donnelley, which used to be a company 

that produced books and other things in the city. And she and her 

husband had amassed a small about of money, about $300,000. 

This person, she befriended her, would sit down with her every 

time she came into the bank. She started to rely on her to write 

checks for her bills, and she ended up taking about $300,000 from 

her. The bank called us, and we ultimately, after a little 

contentiousness, we ultimately were able to recover the money 

from her. 

But we have also had people who have been exploited who have 

gone to the hospital. Elderly gentleman, 90 years old, who had 

gone to the hospital, met a CNA at the hospital, who ended up volunteering to become his caregiver, who then stole about $500,000 

from him. Those are just some of the cases. We have had all kinds 

of cases similar to that. 

Ms. SCHAKOWSKY. You know, some of these are so personal. And 

I think—I don’t know if all of you have, but I know Mr. Kaufmann 

and I think Ms. Canan also said, a lot of people don’t report it. And 

I would think when families are involved that it becomes even 

more difficult. How can we—maybe this is for all of you—encourage 

people to protect themselves to actually report when family or a 

former trusted friend has clearly exploited them? How do we break 

through that? 

Mr. KAUFMAN. Sure. I think a couple things. First, we would obviously love to have the committee members providing information 

43 

on their Web sits and to their constituents about the resources we 

provide. It is very important to help us get the word out, and we 

would like the committee to assist us. 

For us, our campaign Pass It On is premised on the notion that 

it is senior citizens helping other senior citizens and spreading the 

word out, and not being ashamed to talk about frauds that have 

happened, and to protect each other. So that has been the focus of 

our consumer education, is sort of breaking that barrier and getting seniors to talk about it with each other. 

Ms. SCHAKOWSKY. Let me ask you—did you have something, Ms. 

Canan? 

Ms. CANAN. Well, I was just going to say that similar to the FTC, 

we are out and about and encouraging the reporting of abuse. It 

is something that really needs almost a mass media attention to. 

We have the Money Smart for Older Adults, train the trainer 

program that we are out and about, and with intermediaries training people constantly about how to spot and intervene and report 

when fraud is observed. 

Ms. SCHAKOWSKY. Do you partner with senior citizen organizations like AARP and—— 

Ms. CANAN. Yes. So we are a very small office with 57 million 

constituents. So the only way that we could effectively do our job 

is if we connect with service providers, State, local government entities, other Federal partners in order to—you know, with organizations that are on the ground providing services to seniors. And 

many of them will engage in the Money Smart training for their 

clientele. 

Ms. SCHAKOWSKY. Mr. Chairman, can I ask one short question 

in addition? 

I wondered, Mr. Harris, does the State attorney general have any 

role in helping your office with financial exploitation? 

Mr. HARRIS. Yes. In terms of some of the bigger cases, people 

who do systemic exploitive things, they do get involved, file lawsuits, as does the U.S. Attorney’s Office as well. 

I have to say that to me one of the biggest tools that we can use, 

is to get to the smaller community groups, to go to churches, to go 

to synagogues, to go to other places. We work with a small agency 

on the West Side of Chicago called South Austin Coalition. And 

they, you know, they know the people. They bring folks like myself 

in, and these two people here from their organizations to come and 

talk to the various smaller groups. I have generated certain cases 

where we have been able to help people from those groups. 

Because I am not sure how much some of the folks on the West 

Side, the South Side and some of the North Sides of Chicago are 

looking at like bigger media attention on something like that or 

reading some of the brochures that are really geared toward helping the seniors. So it is as simple as you can get it and as grass 

roots as you can get it. I think that is probably the most effective 

tool that I have seen, to help. 

Ms. SCHAKOWSKY. Let me just say I would really like to meet 

further with all of you and talk about ways that we can partner 

on this. And I look forward to the committee following up on this. 

Thank you. 

I yield back. 

44 

Mr. BURGESS. The Chair thanks the gentlelady. Gentlelady yields 

back. 

The Chair recognizes the vice chairman of the subcommittee, Mr. 

Lance from New Jersey, 5 minutes for your questions, please. 

Mr. LANCE. Thank you, Mr. Chairman. And my thanks to all the 

distinguished panel for being here. 

I hear from constituents all the time about being bombarded 

with robocalls from scammers who have spoofed their phone numbers to look like a local call or like a State or Federal agency in 

order to scam them out of personal and financial information. Indeed, yesterday my wife received such a call in New Jersey. Someone claiming that we were in arrears with the Internal Revenue 

Service. And she chose quite appropriately not to return the telephone call. She telephoned me, and our office looked into the telephone number, and it was a someone who was scamming constituents, I would imagine, across the country. 

I have introduced a bill with Grace Meng of New York City, from 

the Great Borough of Queens in New York City, a Democrat, and 

Chairman Emeritus Barton of this committee, called the AntiSpoofing Act of 2015, and I would encourage colleagues to examine 

that bill, and it would target caller ID spoofing and specifically expand protections of the Communications Act of 1934 to include 

spoofed text messages and voice over IP calls. 

Mr. Kaufmann, the FTC runs a do-not-call list. Would you please 

explain in detail, what my constituents and others who are on the 

list, should do if they believe they are being called by scammers or 

organizations in violation of FTC protection? 

Mr. KAUFMAN. Sure. Thank you for the question. Robocalls are 

a huge challenge. The first word of advice we provide to consumers 

if you receive one, hang up. Don’t provide any information. Just 

hang up. 

Mr. LANCE. Yes. I hope those who are viewing this hearing will 

take that to heart. Do not respond to such a call. 

Mr. KAUFMAN. The technology issues are challenging, and it has 

become very inexpensive to blast millions upon millions of phone 

calls. You know, we are bringing law enforcement actions, but the 

cases are challenging. The caller IDs are spoofed. It makes finding 

the perpetrators pretty challenging. 

One thing we have done at the FTC that is pretty innovative is, 

we have issued a number of different public challenges, to get people in the technology community interested in the issue of 

robocalls, in helping to figure out ways to block calls. We have had 

four separate events that have been successful, and it is something 

we are continuing to pursue. We also, again, hang up on the calls, 

get yourself on the do-not-call list, and we continue to work hard 

in this area. 

Mr. LANCE. Thank you. In one of the counties I represent in New 

Jersey, residents were being telephoned by those who claimed to be 

from the county sheriff’s office. This is clearly inaccurate, fraudulent, and the sheriff of that county, the sheriff of Somerset County, 

New Jersey has taken appropriate action. But this happens quite 

frequently. 

How do the FTC and the FCC coordinate to combat these scams? 

45 

Mr. KAUFMAN. We coordinate quite well with them. We have frequent phone calls. We are careful that we are not overlapping in 

terms of the law enforcement actions. And we try to harmonize our 

processes and our implementation as well as we can. 

Mr. LANCE. Thank you. 

Mr. Harris, I am interested in your office. I do not know much 

about it. As I understand it, you are appointed by the chief judge 

of the circuit Court of Cook County. Is that accurate? 

Mr. HARRIS. That is correct. 

Mr. LANCE. And is that true in all of the counties in Illinois, or 

only in Cook County with several million people? 

Mr. HARRIS. Actually, it is only in Cook County that there is a 

public guardian like myself. The other public guardians are appointed by the Governor. 

Mr. LANCE. By the Governor in the various counties, or are there 

jurisdictions? 

Mr. HARRIS. It would be in the various counties, which becomes 

a problem sometimes in downstate because some of the counties 

are so small. 

Mr. LANCE. Yes. Yes. And then do you report to the Circuit Court 

of Cook County? How does that work? 

Mr. HARRIS. Yes. I act under the auspices—obviously I am an appointed person on each one of my cases, and so we have to report 

to the court on an annual basis. We file inventories. We also file 

a yearly accounting and kind of a goings-on of the wards. Kind of 

a social on what we have done with the wards. We also file a yearly 

annual report with the Cook County commissioners. 

Mr. LANCE. Thank you. Well, very good luck with your continued 

work. It is certainly a matter of strong public policy as well as the 

other members of the panel. 

I yield back the balance of my time. 

Mr. BURGESS. The gentleman yields back. The Chair thanks the 

gentleman. 

The Chair recognizes the other gentleman from New Jersey, the 

ranking member of the full committee, Mr. Pallone, 5 minutes for 

your questions, please. 

Mr. PALLONE. Thank you, Mr. Chairman. 

I wanted to ask Mr. Kaufmann, a variety of consumer scams 

emerge during tax filing season, one of which is a phone call from 

a person who falsely claims to represent the IRS. I think that is 

what my colleague—— 

Mr. LANCE. Would the ranking member yield for a moment? This 

happened to me personally, my wife personally, yesterday. Yesterday. 

Mr. PALLONE. I thought you were saying that when I walked in, 

but I wasn’t sure. Thanks. 

So, you know, this person threatens the victim with arrest, deportation, or suspension of a license if an amount of money is not 

paid immediately. And these scammers are very aggressive and 

may use personal information about the victim to seem legitimate. 

And it definitely has affected many constituents in my district. I 

mean, I am not making this up. People have, including seniors, one 

of whom was recently threatened with a home foreclosure if they 

didn’t pay a specified amount. 

46 

So, Mr. Kaufman, I would like my constituents to be prepared 

when they receive a phone call from an IRS imposter. Can you confirm that an actual IRS agent would never call to demand immediate payment, ask for credit or debit card numbers over the phone 

or threaten arrest for not paying? 

Mr. KAUFMAN. Yes. I can absolutely confirm that. Those are imposter scams and consumers should hang up and not provide any 

information. 

Mr. PALLONE. All right. I appreciate that. I am probably going 

to repeat what you just said, just so we don’t—you know, so people 

understand that in my district. 

I wanted to ask also about reporting incidents of elderly fraud. 

Many consider financial exploitation to be a silent crime because 

victims are often too ashamed or embarrassed to report what has 

happened. Additionally, it can be challenging for many seniors to 

serve as a criminal witness, and law enforcement officials regularly 

identify lack of reporting and the difficulty obtaining relevant data 

as challenges to both identity and to combat elder financial exploitation. 

So, Mr. Kaufman, can you explain the role the Consumer Sentinel Network Database plays in combatting senior financial exploitation? Are there any challenges the FTC faces with respect to the 

database, and what steps need to be taken to increase both the use 

of the database and reporting of senior financial exploitation in 

general? 

Mr. KAUFMAN. The database is a very important tool for law enforcement agencies, and we continue to develop it and improve it. 

We have some enhancements in the works right now. But it really 

is a tool for law enforcement agencies throughout the country to 

have access to our millions of customer complaints, and to look for 

trends and to look for specific areas they might be interested in. 

It has been a very effective tool and many of our cases—many, 

many of our cases have originated from complaints that we have 

received and that are in our Consumer Sentinel database. 

Mr. PALLONE. OK. Let me ask Ms. Canan, can you give us an 

update on the Consumer Complaint Database at the CFPB, how 

many complaints do you receive, what types of fraud are you seeing, and how has this information been useful to you in developing 

policy proposals? 

Ms. CANAN. Well, I will say that we know that there have been 

in excess of 63,000 complaints that have been submitted by consumers 62 and older, since we began accepting complaints. What 

we do is we cull through them. We look at them to see how older 

consumers are faring in the marketplace. We know from looking at 

the complaints that there are many older consumers who are having difficulties with their mortgages and with debt collection. Those 

are the two largest areas that older consumers are complaining 

about. Which, by the way, is not unlike their younger counterparts. 

There is often a misconception that older consumers are not engaged fully in the marketplace. That simply is not true. And that 

is borne out by the complaints that we see. 

Our consumer response section for complaints, of course, is focused on consumer products and services which is what the bureau 

focuses on. However, consumers also add narratives into their comVerDate Mar 15 2010 11:54 Oct 26, 2016 Jkt 037690 PO 00000 Frm 00050 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X92ELDERFRAUDXNDFPSTMT\114X92ELDERFRAUDPENDING
47 

plaints, and we have the opportunity to find instances of financial 

exploitation, of stories that are related to that, in the complaints 

as well. 

Mr. PALLONE. All right. Thank you very much. 

Thank you, Mr. Chairman. 

Mr. BURGESS. The Chair thanks the gentleman. The gentleman 

yields back. 

The Chair recognizes the gentleman from Mississippi, Mr. Harper, 5 minutes for questions, please. 

Mr. HARPER. Thank you, Mr. Chairman, and thanks to each of 

you for being here. And we certainly have a lot of issues that need 

to be discussed. 

I know this will come as a surprise, but we do some bipartisan 

work on occasion. So I, along with Representative Castor, have introduced legislation in July, H.R. 3099, the Raise Family Caregivers Act, which would implement the bipartisan recommendation 

of the Federal Commission on Long-Term Care that Congress require the development of a national strategy to support family 

caregivers, similar in scope to the national strategy developed to 

address Alzheimer’s disease. 

The bipartisan legislation would require the development, maintenance, and updating of an integrated national strategy to recognize and support family caregivers. I think this is an underreported 

issue. Unless you are living in the middle of it, a lot of people don’t 

understand what is going through. My motheris almost 92. We are 

going through issues with sitters and ourselves trying to take care 

of her and deal with those issues. And it is a difficult problem for 

a lot of families. 

And we deal with constant—and I can just tell from personal experience, for a number of years we had phone calls, you know, credit card offers, switch your credit card over here, do this, change 

your phone service to the cable. And then you don’t like that and 

you can change back and we would lose her phone number. So we 

finally were able to get to the point, and hopefully this would be 

something to do to help the families that are doing this is to tell 

that person to say: I won’t do anything until you talk to so and so, 

my son, my daughter, my trusted family member. And those 

things, you know, sometimes will help. 

But this is a question for Mr. Kaufmann and Ms. Canan as well. 

I am interested in whether your agencies have focused on the caregiver’s role in protecting the elderly from fraud. And you mentioned 

some, but do you have particular educational materials or guides 

for these caregivers and others in a fiduciary position to seniors, 

and how are lawyers and financial institutions dealing with the 

risk of fraud against their elderly clients? Mr. Kaufmann. 

Mr. KAUFMAN. Sure. At the FTC we have a wide range of consumer materials available. We have got materials that are focused 

specifically, 14 years, our Pass It On campaign has been highly effective for seniors. But I think the CFPB has more materials on 

specifically caregivers and financial institutions of that nature. So 

I think I might defer to my colleague here. 

Mr. HARPER. Miss Canan. 

Ms. CANAN. Thank you. Excuse me. 

Mr. HARPER. Take your time. 

48 

Ms. CANAN. I am actually very happy to have this opportunity 

to tell you about one of our very popular publications, which we 

call Managing Someone Else’s Money. These are how-to user 

friendly guides, for non-professional fiduciaries. People who are 

taking care of the financial matters for a family member or a 

friend. And it includes information that helps the lay fiduciary 

know what his or her responsibilities and duties are. So, in other 

words, if you are caring for someone and you have access to their 

money, it is not OK to buy a car with those funds. Simple things 

like that which should be known, but unfortunately sometimes 

there is some confusion. 

In addition, in these guides we include information about how to 

spot scams and frauds and what you can do to protect the person 

who you are caring for as a financial caregiver. 

We have these national guides we are just in the process of embarking on rolling out State specific guides, including a template 

which would allow States to do their own as well. 

Mr. HARPER. OK. You mention you had 63,000 complaints involving people 62 years of age and older. You mentioned mortgage related, debt, you know, collection. Of course we have the Federal 

Fair Debt Collection Practices Act that deals with a lot of that. So 

of that 63,000, you are not saying that all 63,000 were fraud, you 

are just saying those were complaints that were registered. Correct? 

Ms. CANAN. Correct. That is correct. 

Mr. HARPER. All right. If in the time that I have for both you, 

Mr. Kaufmann, and Ms. Canan as well, I am certainly very interested in the cross-agency initiatives that protect seniors from fraud, 

abuse, neglect and exploitation. 

Would you both very quickly discuss your work with the Elder 

Justice Coordinating Council housed at the Department of Health 

and Human Services, whether the council’s efforts have been constructed towards your agency’s efforts, and what do you think could 

be improved?if I may be allowed to continue, Mr. Chairman, to an 

answer on that or—— 

Mr. BURGESS. Proceed. 

Mr. HARPER. OK. Thank you. 

Mr. KAUFMAN. We are members of the council. We have participated in a number of events. We have partnered with organizations 

throughout the country, senior organizations. We found it to be an 

effective tool for sharing information with other law enforcement 

agencies. And I can’t think of any improvements at the moment. 

Mr. HARPER. Thank you. 

Ms. CANAN. Yes. So we are one of the 11 Federal agencies. We 

have been very active in participating in the Elder Justice coordinating Council. We too find it very helpful for coordinating our actions. You know, each agency brings to the table different expertise 

in different jurisdictions. It is clearly a situation where we need all 

hands on deck and our work often will compliment those of our sister agencies. 

Mr. HARPER. Thank you very much. 

I yield back. 

Mr. BURGESS. The Chair thanks the gentleman. The gentleman 

yields back. 

49 

The Chair recognizes the gentleman from Massachusetts, Mr. 

Kennedy, 5 minutes for questions, please. 

Mr. KENNEDY. Thank you, Mr. Chairman. Appreciate it. Always 

a pleasure to hear you get Massachusetts out of the—as often as 

we possible can from our friends from Texas. So thank you very 

much. 

To the distinguished panel, thank you very much for being here. 

It is a pleasure to have you here. And I wanted to focus on an aspect of Medicare if we can. 

Their open enrollment period started on October 15 and runs 

through December 7. For the Nation’s 54 million Medicare beneficiaries, this is an important time to consider changes to their 

health and drug plans. However, Medicare beneficiaries should be 

vigilant as this period also represents an opportunity for fraud. 

According to a recent article by U.S. News and World Report, a 

common request for Medicare scams is that a victim reveal their 

Medicare number. It is important that our seniors know how easy 

it is to spot these open enrollment scams. 

So, Mr. Kaufman, I would like to start with you, sir. I understand that the FTC won a victory in Federal Court last October 

after filing a complaint against a telemarketing scheme that was 

designed to trick and did trick seniors by pretending to be part of 

Medicare. Could you describe the specifics of that case and why 

that victory is so important for consumers? 

Mr. KAUFMAN. Sure. Thank you for acknowledging this case. It 

is a very important case. The entity was called Sun Bright. Telemarketers were claiming to be affiliated with Medicare. They falsely promised new cards for consumers and required people to provide their bank account numbers. They of course used those bank 

account numbers to withdrawal several hundred dollars from the 

consumers that were contacted. 

It is very consistent with the cases we have seen repeatedly 

where they are misrepresenting affiliations with Government entities or other entities in order to scam consumers out of their personal information and then out of their financial benefits. 

Mr. KENNEDY. So how does the FTC then coordinate with CMS 

to prevent this type of fraud? 

Mr. KAUFMAN. We do work with them. We talk to them. We also 

issue alerts. When there are changes in health benefits that are 

publicly available, we know that the frauds will follow. That is one 

thing we have always seen at the FTC. When there is a new program, a new scare, frauds will always follow from it. So we will always issue alerts and scam alerts and blog about it. 

Mr. KENNEDY. And just so everyone is clear, Mr. Kaufman, is it 

true that Medicare will never call or email seniors with products 

offered or for requests for their Medicare number? 

Mr. KAUFMAN. That is correct. And they will not ask for your 

bank account information in particular. 

Mr. KENNEDY. And insurance agents are not allowed to visit your 

home to sell or endorse any Medicare product. Is that right? 

Mr. KAUFMAN. That is my understanding, but I would have to 

verify that and get back to you if that’s OK. 

50 

Mr. KENNEDY. My understanding as well. But thank you. So 

what should consumers do if they or someone they know has received one of these fake Medicare solicitations? 

Mr. KAUFMAN. Hopefully they have not provided their information. If they have, they should contact their bank immediately and 

try to rectify the situation. They should also file a complaint with 

the FTC at ftc.gov/complaint. 

Mr. KENNEDY. Great. Thank you very much sir. Any of the other 

witnesses have anything to add? 

With that I yield back. 

Ms. SCHAKOWSKY. I was just going to dig in my purse for my 

Medicare card. Every once in awhile we hear from people who say 

how come Social Security numbers are on the Medicare card? So 

it is in the wallets of everybody who is over 65, and we are told 

that it would be very cumbersome and costly to change that, but 

is that a bad idea? Either one of you can answer. It is right there. 

That is the number. So when we talk about Medicare number, it 

is a Social Security number. 

Mr. BURGESS. Will the gentlelady yield on that point? 

Ms. SCHAKOWSKY. Yes. 

Mr. BURGESS. And I am not sure about this, and I will to look 

into it for you, but I believe in the Medicare reform that we passed 

in March and April of this year, the removal of the Social Security 

card, that was one of the Ways and Means provisions that was 

added to the bill called MACRA that was passed earlier this year, 

the bill that repealed the sustainable growth rate formula. But I 

will find out about that because that was a weakness inherent in 

the system. 

Mr. KAUFMAN. But I very much agree with you. It is important 

that Social Security numbers not be shared or readily accessible or 

publicly displayed, but we would be glad to talk to you more about 

that issue. 

Ms. SCHAKOWSKY. OK. And maybe we did fix it. That is good. 

Mr. BURGESS. Every now and then we fix something. The Chair 

thanks the gentlelady. The Chair recognizes the gentleman from 

Oklahoma, Mr. Mullin, for 5 minutes for questions. 

Mr. MULLIN. I can honestly tell you I can’t tell you what a card 

for Medicare looks like. I haven’t got one. Anyways, thank you so 

much for being here. 

Something started happening to us about a month ago in our office which was very odd. We started getting people calling us, saying they had received a call from our office, pretending to be from 

our office to get personal information. And it worries me because 

their automatic trust that we have built with our constituents is 

getting phone calls from people supposedly being from our office. 

Now, I can imagine in business we use a rule that you only receive roughly around 1 percent of your actual complaints, and I 

would wonder if that factor would play true that I am only receiving about 1 percent of those that are receiving those calls. Now, is 

there an enforcement that—do we lack enforcement? Do we lack 

the ability to go after these individuals even if we get their information? What is the penalties for doing this? And Mr. Kaufmann 

or Ms. Canan, can one of you guys talk on that? 

51 

Mr. KAUFMAN. We have definitely seen a rise in imposter scams. 

I have also received phone calls in my office from people who have 

been contacted by me who were not contacted by me. So it is definitely a prevalent scheme and fraud that is out there. 

The FTC is bringing actions when we can find the perpetrators. 

We are a civil law enforcement agency, so we can only bring civil 

actions. We also know criminal law enforcement is looking at it as 

well. But consumer education is a really important focus here. 

Mr. MULLIN. Well, we talk about consumer education, but I will 

just use my grandparents for example. They are checked out. And 

I am not saying that in a bad way. My grandpa is Papa, he is 94 

years old. Grandma is I think 89. They are not reading these 

manuals that come out. They are not getting online. They are not 

reading this stuff. We are talking about the most vulnerable. Ones 

that didn’t grow up with the computers, one that has a cell phone 

but the numbers are this big on it. Information is for younger generations, not these other generations. 

Mr. KAUFMAN. Well I would encourage you to take a look at our 

Pass it On brochure. We have a one-pager on imposter scams. It 

is about three paragraphs long. It describes what the scams are, 

what they are trying to do, and what consumers should do. We researched with seniors to find out effective ways to communicate it. 

Mr. MULLIN. Right. I get that, but what I am saying is, is there 

an enforcement problem here? Because it is growing. It is not going 

backwards, and obviously it is profitable or they wouldn’t be doing 

it. So how can we help you on the enforcement side of it? There 

has to be someone knowing that if you do this there is a better 

chance you are going to get caught, not a very slim chance you are 

going to get caught. 

Mr. KAUFMAN. We continue to bring cases. There is always more 

that we can do. We are also getting more and more criminal law 

enforcement agencies interested. So I think the combination of the 

FTC working with other law enforcement agencies is starting to 

make a dent, but it is a problem. 

Mr. MULLIN. Mr. Harris, I believe, if I understand it correctly, you guys have recovered roughly, is it $50 million in stolen assets? 

Mr. HARRIS. Yes. 

Mr. MULLIN. What are your best tools? Maybe we can work together here, because if they were able to recover that out of one 

county, I am just floored. 

Mr. HARRIS. I think, you know, we too are a civil litigation organization, and for us the more practical thing is to get the money 

back because they need it. You know, the people we work with 

need it. 

I think that criminal enforcement is important. And when I first 

became public guardian almost 11 years ago, I think there was 

fewer criminal cases being brought against people, again because 

of problems with witnesses and recordkeeping and telling. But 

since then it has increased, the amount of litigation, both from the 

State’s Attorney’s office in Cook County as well as the U.S. Attorney’s Office. 

Mr. MULLIN. So, Mr. Harris, what I am trying to get to though, 

is what is the most effective tools you are using, to make that happen in one county, to recover $50 million? 

52 

Mr. HARRIS. We largely work with the Probate Act, and there is 

a specific section of the Probate Act called the Citations Section in 

which we can recover properties that have been embezzled, stolen, 

concealed from wards. It is really just us lawyers doing our work 

and doing our job. 

Mr. MULLIN. How do you find the people? 

Mr. HARRIS. We get referrals from all sources, from banks, from 

neighbors, from churches, from hospitals. And once we have an intake and if they qualify, then those are cases that we go after. 

Mr. MULLIN. So really basically you have to just spend the time. 

You have got to be able to have the resources to be able to spend 

the time to go after and follow the lead—— 

Mr. HARRIS. That is absolutely true. When I first became public 

guardian, we had one person working on it. Because of the growth 

in this area, we have added more resources, and I work on it and 

other people as well. 

Mr. MULLIN. Mr. Harris, I appreciate it. 

And, Mr. Kaufman and Ms. Canan, I do appreciate what you are 

doing, but I really think we are going to have to step up the enforcement side of it. As I go back to say what I said earlier, we 

have got to make it to where they believe there is better chance 

they are going to get caught than a slim chance they are going to 

get caught. 

Mr. Chairman, I yield back. 

Mr. BURGESS. The Chair thanks the gentleman. The Chair recognizes the gentlelady from Indiana, Mrs. Brooks, 5 minutes for your 

questions, please. 

Mrs. BROOKS. In my home State of Indiana, our Attorney General is taking a lead in combatting fraud targeting seniors. Six 

years ago they launched a free senior consumer protection workshop that has actually traveled to all 92 counties in Indiana, and 

has reached over 2,000 elderly Hoosiers and their families. And I 

appreciate that we have to take a multilevel approach in working 

on this, whether it is the Federal, State, or local levels. 

And I do have to say that when you think about retirement security, and I talk about security a lot, and retirement security is part 

of that, when I am out talking with constituents, people often are 

embarrassed. They don’t want to share if they have been scammed. 

And I appreciate the work that you all are doing. They don’t want 

to share with their families. They don’t want to share, they don’t 

want to talk about it, and it might even take a while for them to 

realize it. 

I am a former U.S. attorney, and I am curious whether or not 

any U.S. attorney’s offices, whether in the civil division or the 

criminal division, are engaged? I know they are on identity theft 

because that is something that we have been working on for a very, 

very long time, as the Justice Department has worked on it. I am 

curious whether or not any of you are working with any U.S. attorney’s offices on any task forces, whether it is a civil division or a 

criminal division? This is for any of you. 

Mr. KAUFMAN. Sure. We work closely with a number of U.S. attorneys throughout the country. We have the Criminal Liaison 

Unit at the FTC. Although we lack criminal authority, we realize 

that a lot of our cases should be prosecuted criminally, and we proVerDate Mar 15 2010 11:54 Oct 26, 2016 Jkt 037690 PO 00000 Frm 00056 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X92ELDERFRAUDXNDFPSTMT\114X92ELDERFRAUDPENDING
53 

vide referrals, leads, information to the Court, to criminal law enforcement. 

Indeed, since we started this program in 2003, well, over 700 of 

our defendants have been prosecuted criminally on a variety of 

frauds, not just seniors. 

Mrs. BROOKS. Right. OK. Terrific. Mrs. Canan? 

Ms. CANAN. So I am in the consumer education division in the 

bureau, and I would have to get back to you regarding whether our 

enforcement teams are engaged with U.S. attorneys. I suspect that 

they are. 

I know that we are in frequent contact with the Department of 

Justice, and we have frequent communications with DAs around 

the country who are prosecuting elder exploitation and abuse. 

Mrs. BROOKS. Terrific. Mr. Harris? 

Mr. HARRIS. In our small office we do work with the U.S. Attorney’s Office. I think it is the relationships have developed over the 

years in working with cases. It has worked out very well. We have 

even worked with the postal inspectors on some cases as well. 

So I think it becomes for us, it becomes relationship building, 

and I think we have established that, at least in Chicago. 

Mrs. BROOKS. OK. Thank you. Just with respect to your respective agencies, I am curious; how many people work on this specifically? How many FTEs, going back to my days in Justice. How 

FTEs are kind of focused on this? 

Mr. KAUFMAN. At the FTC we don’t have our attorneys designated as working specifically on senior issues, so they are really 

spread throughout our Bureau. We have about 440 people in the 

Bureau of Consumer Protection, working on a wide range of issues, 

but we have brought a number of cases affecting seniors, and it is 

an area of interest throughout our Bureau. 

Mrs. BROOKS. Thank you. Ms. Canan? 

Ms. CANAN. So our office is small. We are determined and dedicated, but we are small. We are under 10 full-time employees. But 

we have the benefit of being able to work with other divisions and 

offices throughout the Bureau. 

So, when we become aware of a particular problem where it appears that it may include violations of the law, we bring in other 

divisions that have the ability to engage in enforcement or supervision. We also have a market division and research division, too. 

So we are frequently working. So even though we are small, we 

have the benefit of being able to work with others around the Bureau. 

Mrs. BROOKS. Thank you. Mr. Kaufman, when the FTC does, on 

those rare occasions when you recover the funds, how is it determined, how do you ensure that the victims ever receive the funds? 

Mr. KAUFMAN. That is always our first priority. If there is 

enough money to get back to consumers, we get customer lists, and 

we will do some sort of pro rata distribution. There are cases where 

we are very successful on that. There are cases where the funds 

are no longer available and we can’t find them. But our number 

one priority—well, number one is stopping the conduct. Number 

two is getting money back to the consumers. 

Mrs. BROOKS. How does that happen actually? 

54 

Mr. KAUFMAN. We actually have a redress office in our Bureau 

that coordinates it. We have contractors we work with. Depending 

on the nature of the fraud, often we will have customer lists and 

we can just send out checks. Sometimes there might be a claims 

process. It varies depending upon how the consumers were defrauded and what information we have. 

Mrs. BROOKS. OK. And just one last question if I might, Mr. 

Chairman. How do we make sure, Mr. Harris, when so many of 

these financial abuse go underreported, underrecognized, underprosecuted, what would you like for us to do? 

Mr. HARRIS. I think one of the things that is lacking are organizations like mine, not necessarily that do guardianship work, but 

that focus on recovering moneys on a local level for seniors. There 

is a lot of people we can’t help, and if there is some way that the 

Federal Government can support legal assistance foundations, or 

other legal services, you know, for establishing attorneys in those 

offices that focus specifically on this area, I think that would be 

very helpful. 

Mrs. BROOKS. Thank you all for your work. I yield back. 

Mr. BURGESS. The Chair thanks the gentlelady. The gentlelady 

yields back. The Chair recognizes the gentleman from North Carolina, Mr. Butterfield, 5 minutes for questions, please. 

Mr. BUTTERFIELD. Thank you very much, Mr. Chairman, for convening this important hearing today, and thank you to the three 

witnesses, Mr. Kaufman, Ms. Canan, and Mr. Harris. Mr. Harris, 

I am not going to be able to get to you today, but these questions 

going to be directed to the other two. Please don’t take that personally. 

But I know a little bit about the Cook County Public Guardian 

Program. It is one of the best in the Nation. What was your predecessor’s name, the gentleman that was there before you. 

Mr. HARRIS. Patrick Murphy. 

Mr. BUTTERFIELD. Patrick Murphy, that was his name. My 

daughter, stepdaughter, Tracey Caveness Glass—don’t get surprised, but that was my stepdaughter. She worked for Patrick for 

some years there in Chicago. 

I never heard of the Public Guardian Program until she went to 

work there, and I have the greatest amount of respect. So thank 

you for the work that you do. 

Mr. HARRIS. Thank you. 

Mr. BUTTERFIELD. The FTC recently created a program called 

Pass it On, in which the Commission reaches out to older Americans with information about avoiding common types of fraud by 

contacting them at places where they gather and interact, like libraries, clubs, and adult living facilities. 

And so Mr. Kaufman, let’s start with you. Can you explain why 

that approach might be more effective at disseminating the antifraud information than, say, publishing the information on a Web 

site or even a mailer? 

Mr. KAUFMAN. Absolutely. We engaged in research before we instituted the Pass it On program. We met with seniors, we met with 

people who provide support with seniors. We discussed what is the 

best way to effectively communicate information in short, clear, 

concise information on specific topics. We have so far given way I 

55 

think about 3 million copies of it to I think it is more than 8,000 

different organizations around the country. So there is a lot of research and thinking that went through it, and we are going to 

issue additional aspects of it in the coming year. 

Mr. BUTTERFIELD. The Pass it On initiative seems to emphasize 

the importance of striking the right tone in educating seniors about 

potential fraudulent schemes that is respectful and nonjudgmental. 

Do you find that seniors, Mr. Kaufman, respond better to advice 

given to them by people of their own age, their own generation? 

How can the financial literacy community honor this preference 

going forward? 

Mr. KAUFMAN. Our research has shown that it is an effective 

tool. This is a campaign that we launched about a year ago. We are 

continuing to explore it, but it has shown effectiveness, and it has 

been very successful. We have gotten a lot of very positive feedback 

about the program. We will continue to monitor it and see how it 

can be modified and improved over time. 

Mr. BUTTERFIELD. And Ms. Canan, as someone who also promotes financial literacy, do you agree with this approach in general? 

Ms. CANAN. Yes, we do. And we have very similar materials, or 

at least the type of materials that are written in plain language 

that are nonjudgmental, and we frequently will actually use the 

FTC’s materials, its Pass it On materials, and we go to conferences 

together and share tables and distribute our materials jointly. 

Mr. BUTTERFIELD. All right. Finally, Mr. Chairman, the FTC conducted a workshop in October of last year that explored some of 

these issues, including how fraud affects different communities in 

different ways. Mr. Kaufman, what were some of the outcomes 

from this workshop in terms of the senior community? Do consumer groups and the industry know how to address the problems 

that are really, really unique? 

Mr. KAUFMAN. Yes. Our Every Community Initiative, we kicked 

it off about a year, year and a half ago. Actually Pass it On is one 

of the results of that. We realized we had experts on senior issues 

that provided information about best ways to reach seniors. 

We also focused on issues affecting Spanish-speaking Americans, 

African Americans, and that continues to be a very important issue 

for us. We are looking for law enforcement actions and targets 

where they are targeting specific populations, and we want to make 

sure that our law enforcement and our education programs reach 

all Americans. 

Mr. BUTTERFIELD. Very well said. And I thank all three of you. 

Mr. Chairman, I am going to set a record today. I have got to be 

in the Cannon Building in about 30 seconds, and so I am going to 

yield back. I yield back. 

Mr. BURGESS. The Chair thanks the gentleman. The Chair recognizes the gentleman from Kentucky, Mr. Guthrie, 5 minutes for 

your questions, please. 

Mr. GUTHRIE. Thank you very much. I appreciate that. And 

thank you, Mr. Chairman. Thank you for being here. I have been 

in another hearing of the subcommittee of the same committee, so 

I apologize, I missed some of it. Mr. Kaufman and Ms. Canan, I 

want to ask you a couple questions on your regional offices. How 

56 

involved are your regional offices in combatting fraud against the 

elderly? 

Mr. KAUFMAN. Our regional offices, we have eight throughout the 

country, are incredibly involved. They do a good deal of our litigation. They do a lot of our fraud work, and they also do a lot of outreach on the local level. 

So, actually our regional offices provide enormous benefits to the 

Bureau, and it is very important to us that they are there and they 

are on the ground and bringing actions and doing outreach. 

Mr. GUTHRIE. OK. Ms. Canan? 

Ms. CANAN. So I may have to get back to you with more detailed 

information because I don’t want to say anything that may be incorrect, but it is my understanding that our regional offices are 

mostly occupied by our examiners. We have a full team of examiners that are examining financial institutions. 

And nonetheless, in our headquarters we have a nationwide approach. And our enforcement actions are nationwide. Our consumer 

education engagement is nationwide as well. 

Mr. GUTHRIE. OK. Do either of you guys—it may not be as applicable to you, Ms. Canan, given the setup of your regional offices— 

but do either of your agencies measure engagement on this issue 

on a regional level to see if there are trends that either target or 

scam seniors in one area more than another? 

Ms. CANAN. I will start. Yes, absolutely. So, we are frequently 

going through our consumer complaints, just as one example. And 

in the process of doing that, we look for geographical, you know, 

spikes in complaints and things of that sort. In addition we are frequently conferring with stakeholders that are nationwide around 

the country, having calls and hearing from people on the ground 

about particular problems that they are seeing. 

Mr. GUTHRIE. OK. 

Mr. KAUFMAN. And at the FTC we have hosted over the past few 

years, 30 different what we call Common Ground Conferences 

throughout the country. We get together law enforcers from other 

Federal agencies, local authorities, consumer organizations, and we 

have a daylong discussion of the issues that they are seeing. So it 

is a way for us to get more information to develop relationships 

and to keep abreast of trends that are happening. 

Mr. GUTHRIE. OK, thank you. And then also, Mr. Kaufman, actually Mr. Butterfield kind of went down the path I was going to go. 

I wanted to hear more about the Pass it On program, which I think 

you have explained well. You said you are going to be looking at 

the effectiveness of the Pass it On. I know you have other programs. How do you all measure the effectiveness? What do you all 

when do you a review of effectiveness? 

Mr. KAUFMAN. You know, it is challenging to measure effectiveness in fraud. That is something we wrestle with. We bring a lot 

of law enforcement. We do a lot of consumer education. Our materials seem to be popular. There is a high demand. We get a lot of 

requests for it. We have a lot of organizations that take our materials and just stamp their logo on it and use it, and we are delighted when they do that. We just want to get the message out. 

But measuring effectiveness is challenging. We keep bringing 

more cases, and that is one measure of our success. And 

57 

thereceptiveness people have to our materials is one measure as 

well, but it is a challenge to precisely measure how effective are we 

being. We also, I will say, do a survey every year of one of our consumer education Web sites to see whether consumers are satisfied 

with it, and we have done quite well there as well. 

Mr. GUTHRIE. OK. A lot of times it is hard to measure the crime 

that you prevent from being committed. It is hard to define that. 

I understand that. Well thank you, and I will join Mr. Butterfield 

in yielding back time. 

Mr. BURGESS. The Chair thanks the gentleman. The Chair recognizes the gentleman from Florida, Mr. Bilirakis, for 5 minutes of 

questions. 

Mr. BILIRAKIS. Thank you, Mr. Chairman. I appreciate it, and I 

thank the panel for their testimony. Mr. Kaufman, in your testimony you state the importance of the FTC recognizing trends in 

fraud against the elderly as the population of older Americans continues to grow. As you may know, the census estimates that the 

number of seniors 65 and older will surpass Americans under age 

18 for the first time. Actually we are 18 years away from that, 

2033. 

So what resources is the FTC putting toward following trends 

and fraud against the elderly, allocating resources to enforce 

against criminals targeting the elderly and educating seniors of the 

risks? 

Mr. KAUFMAN. It is a very important priority area for us. Our 

Consumer Sentinel database, which has millions of complaints, is 

an incredibly important tool for us. It is self-reported information 

that we get at the FTC as well as other law enforcement agencies, 

the BBBs. They all share information, put it into this database, 

and we are very frequently analyzing it, looking for trends, and 

looking for developments. We are also continuing teaching more 

law enforcement and more outreach. It is a very important priority 

for us. 

Mr. BILIRAKIS. OK good. And I want to commend you. I have had 

several senior seminars in my area in central Florida, and you participated, the FTC has, and they have done a wonderful job. 

And maybe this question also is for Mr. Harris. Is there a line, 

maybe anonymous line, where someone, a friend of a loved one who 

is having trouble, and elderly person is having trouble or maybe 

has been taken advantage of where a person can call and report 

an incident? 

Mr. KAUFMAN. We collect complaints as ftc.gov/complaints, and 

we also have a toll-free number; it is 1–877–FTCHELP. 

Mr. BILIRAKIS. Very good. Sir, is there a number—I know that 

you do a wonderful job but most seniors do not qualify for your 

services. Do you refer some seniors to other programs where they 

can be helped? And also is there an anonymous line or maybe a 

211—we have 211 in Florida—where a person can call and be made 

aware of some of these services? 

But specifically is there an anonymous line where maybe a friend 

of a loved one who is having difficulty can share those concerns 

with your particular program? 

Mr. HARRIS. With my office you can call our office directly at 

312–603–0800, and we would refer you to either to an adult protecVerDate Mar 15 2010 11:54 Oct 26, 2016 Jkt 037690 PO 00000 Frm 00061 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X92ELDERFRAUDXNDFPSTMT\114X92ELDERFRAUDPENDING
58 

tive services agency that is monitored by the State of Illinois, or 

the City of Chicago, or you can call 311 quite frankly in Chicago 

and get help in that way as well. 

Mr. BILIRAKIS. What are the ways that you gather information 

with regard to maybe candidates that need your services? 

Mr. HARRIS. We talk to their medical providers, doctors. We also 

have some investigatory power to look at previous reports of adult 

abuse or exploitation of some of our wards. We also have some access to financial records, vis—vis an investigatory process if we 

opened it for an intake. 

We use subpoena power once we have a case that is opened and 

other legal tools like depositions and other discovery tools. 

Mr. BILIRAKIS. Very good. Thank you. And I will follow the trend 

and yield back my time. Thank you, Mr. Chairman. 

Mr. BURGESS. The Chair thanks the gentleman. The Chair just 

does want to observe because questions did come up on Social Security numbers on Medicare cards, and that, indeed, was part of the 

law that was passed in April. My understanding, and I have got 

crack staff who are always watching me, and they provided me the 

information. I think it is within 4 years’ time. It is an agreement 

between the Secretary of Health and Human Services and the 

Commissioner for Social Security, but that is a change that is coming. It is not going to be an immediate change. If anyone gets their 

Medicare card in the next couple of months, it may very well not 

have reflected that change, but it was passed by the House and 

Senate, signed into law by the President, so one of those times 

where things did work as intended. 

Seeing that there are no further Members wishing to ask questions for the first panel, I wanted to thank our witnesses for being 

here today. This will conclude our first panel, and we will take a 

2-minute recess to set up for the second panel. 

[Recess.] 

Mr. BURGESS. I want to welcome everyone back. Thank you for 

your patience and taking time to be here today. We will move into 

the second panel for today’s hearing. We will follow the same format as the first panel. Each witness will be given 5 minutes for an 

opening statement followed by a round of questions from Members. 

For our second panel, we want to welcome the following witnesses: Professor Charles Wallace, the Undergraduate Program Director For Computer Science at Michigan Technical University; and 

Ms. Tobie Stanger, Senior Editor for Consumer Reports. We appreciate both of you being here this morning. We will begin with you, 

Professor Wallace, and you are recognized for 5 minutes for an 

opening statement, please. 

STATEMENTS OF CHARLES WALLACE, DIRECTOR OF UNDERGRADUATE STUDIES, COMPUTER SCIENCE DEPARTMENT, 

MICHIGAN TECHNOLOGICAL UNIVERSITY, AND TOBIE 

STANGER, SENIOR EDITOR, CONSUMER REPORTS 

STATEMENT OF CHARLES WALLACE 

Mr. WALLACE. Very well. Thank you, members of the subcommittee, for the opportunity to speak at this meeting. And the 

59 

students in my discrete math course, who get the day off, also 

thank you. 

My name is Charles Wallace. I am Associate Professor of Computer Science at Michigan Technological University. Michigan Tech 

is a researched-focused university located in the upper Peninsula 

of Michigan with an emphasis on technology, engineering, and scientific degree programs. 

For the past 4 years, our Breaking Digital Barriers Group at 

Michigan Tech, has organized and participated in an ongoing outreach program in conjunction with the local public library called 

Online at the Library. It trains elderly residents of our rural community in digital literacy skills and exposes our students to the realities faced by digital non-natives. 

Through our experiences, we have identified recurring themes. 

Of these, the theme most germane to the current hearing is anxiety 

versus exploration. Lacking appropriate grounding in this new 

technology, our senior patrons alternate between naive trust and 

paralyzing suspicion, neither of which leads to comfortable, productive use. Our program addresses this problem by providing a safe 

place for learning among peers, interaction with mentors who 

model appropriate use, and develops a healthy balance between 

caution and exploration. 

Residents over age 65 constitute over 15 percent of the population of our rural area. Because of the larger-than-average number 

of elders without family support, many of whom are below the poverty line, there is a strong need to help with digital literacy in this 

community. The experience of using a computing device is well 

known to cause anxiety in elders, and our experiences bear this 

out. Many learners are fearful of going online because of stories of 

fraud and identity theft they have heard in the media and experiences of relatives and friends. 

Without a basis of understanding for how malware and other 

threats work, they have no model for how to minimize their threat 

level. Anything can be a threat. So many learners fear using a computer altogether. One unfortunate consequence of this anxiety is 

the reluctance to explore. And for newcomers to a software product 

or service, this is a vital form of learning, exploration. 

To complicate matters further, in practice it is often far from 

clear whether a user is a victim of true criminals or simply aggressive businesses pushing a product. For example, Mitch, a 60-yearold recreational computer user runs a small service-based local 

business. He paid a company hundreds of dollars because they convinced him, after many hours on the phone, that his business needed to be on prioritized search lists through Google and Bing. However, Mitch did not know what the service was or how it helped his 

business, how he could access his accounts with the service, or 

where he would be able to see the effects of the service. 

After several months, he attended as a participant in the library 

help sessions and described his experience. Tutors determined after 

a lot of exploring and calling the company that sold the service to 

him, what the service does and explained to him what he had paid 

for. Mitch’s business has no online presence, and being a local business, being searchable as an advertiser on search engines does not 

help him. In this case, Mitch was not a victim of fraud or theft 

60 

strictly speaking but paid a legitimate business to help him without understanding the services he was paying for. It is clear that 

basic literacy and secure online behavior is an essential weapon in 

fighting fraud against the elderly. 

We believe that Online At the Library serves as an effective and 

replicable learning model, a safe place for learning, asking potentially embarrassing questions, and gaining strength from seeing 

peers in the same position, personal contact with mentors who can 

model appropriate behavior and attitudes. Development of healthy 

online behavior, finding a balance that keeps seniors safe without 

stifling their creativity and productive energy. 

Breaking Digital Barriers members are developing a 

sociotechnological approach to help older learners with strategies 

for navigating the Internet. This approach involves small interactive group learning activities, along with software tools to help 

them with navigation. Over the next 2 years Breaking Digital Barriers will help similar learning programs around the upper Peninsula of Michigan and through the rest of Michigan. More information can be found at our Breaking Digital Barriers Web site at 

mtu.edu/bdb. Thank you. 

[The prepared statement of Mr. Wallace follows:] 

61 


Breaking Digital Barriers: 

Promoting a safe, productive online presence for senior citizens 

Testimony submitted to the House CMT Subcommittee hearing 

"Fighting Fraud Against the Elderly: An Update", October 23, 2015 

Charles Wallace 

Associate Professor, Computer Science Department, Michigan Technological University 

Summary. In today's world, technological change outpaces many people's ability to 

comprehend or trust it, let alone embrace it. It is vitally important that developers of 

technology for the elderly are grounded in the needs, experience, and capabilities of the 

people they seek to help. For the past four years, the Breaking Digital Barriers group at 

Michigan Technological University has organized and participated in an ongoing outreach 

program called Online at the Library that trains elderly residents of our rural community in 

digital literacy skills and exposes our students to the realities faced by digital non-natives. 

The attendees at our help sessions, having been left behind in earlier iterations of the 

technological revolution, exemplify the challenges facing the designers of tomorrow's 

technology. Through our experiences, we have identified recurring themes. Of these, the 

theme most germane to the current hearing is "anxiety vs. exploration": lacking appropriate 

grounding in the new technology, our senior patrons alternate between naive trust and 

paralyzing suspicion, neither of which leads to comfortable, productive use. Our program 

addresses this problem by providing a safe place for learning among peers, interaction with 

mentors who model appropriate use, and developing a healthy balance between caution 

and exploration. 

In this document, we briefly cover the motivation and background for our project, we offer 

real examples of seniors struggling with both the reality and the fear of online fraud, and we 

offer our program as a model for engagement with the elderly, helping them overcome their 

obstacles to online activity and close avenues for fraud. 

Motivation. The Internet-fueled explosion of digital technology use in the late 20th century 

promised much for the elderly: a wealth of news and health information and the ability to 

stay in touch with distant friends and family, to name a few examples. To a great extent, 

these promises have been fulfilled, but at a certain cost: digital literacy is quickly moving 

from an attractive option to a necessity. In many cases, paying utility bills or performing 

certain bank transactions may only be available online. Keeping up with communication 

from one's local church, medical facilities, and contacts has become ever more difficult 

without the use of digital technology. The electronic tools they must use vary across 

platforms and over time, and traditional forms of learning are unavailable or inadequate. 

Even simple device-local tasks on PCs or tablets can be challenging, let alone the use of 

services through these devices. 

When we design and build the technology to support an aging population staying at home, 

we need to consider it from a grounded perspective that takes into account the particular 

characteristics of this population. We need to acknowledge the barriers confronting them as 

they attempt to adopt more powerful, pervasive technology. We need to learn what 

knowledge and skills they have picked up earlier as users, and how it affects their adoption 

of new technology. Finally, we need to be realistic about the degree to which elders are 

willing to bring more pervasive technology into their lives. 
62 


Background. Since 2011, students at our university have been meeting weekly at the local 

public library with community members, most of them 60 years of age or older. This series 

of meetings, called "Online at the Library", provides one-on-one tutoring for people with 

questions about digital technology. Some participants are ordinary people who may have 

never used a computer but suddenly find themselves required to conduct online banking 

transactions or update electronic retirement information. Others may have used computers 

but have fallen out of practice. Still others need help transferring skills from PCs to new 

mobile devices. As we continue to move the technological bar, we are leaving these people 

behind. It is a moral imperative that we listen to their stories and address their needs as we 

develop the technologies of tomorrow. 

Our Online at the Library experiences are colored by the particular character of our local 

area and our university. Michigan Tech is located in the far northwest corner of the U.S. 

State of Michigan, near the shore of Lake Superior. Our program precipitates some unlikely 

pairings: on one hand, local residents with long family tics to the area and varying levels of 

technological literacy; on the other hand, student tutors from around the globe, with 

extensive interest and experience in technology. 

A copper boom in the 19th century brought wealth, industry, and a wide range of 

immigrants to this remote area. It also spurred the founding of Michigan College of Mines in 

1885, later renamed Michigan Technological University. This mixture of mining, immigrants, 

and technology in a remote community has continued to shape the character of this area. By 

1969, the last of the mines closed permanently; many of the villages and larger towns have 

shrunk drastically or even disappeared. The disappearance of mining jobs provoked flight 

from the area, primarily among younger people. The population of Houghton County has 

steadily decreased since the early 20th century- a decline of over 50% in the past century. 

County residents over age 65 constitute over 15% of the population, 2% more than the U.S. 

average. Many of their relatives live far away, and those who stay struggle to get by in an 

economically depressed area with few jobs outside the university. In spite of the hard 

economic conditions, there is a strong sense of identification with the area among the 

elderly, and this along with financial constraints keeps many elderly in the area. Because of 

the larger than average number of elders without family support, many of whom are below 

the poverty limit, there is a strong need to help with digital literacy in this community. 

Michigan Tech is a research-focused university with an emphasis on technology, 

engineering, and scientific degree programs. Students in the Computer Science, Cognitive & 

Learning Sciences and Humanities departments provide most of the help at Online at the 

Library. International students make up a sizeable portion of the graduate enrollment, and 

they are well represented at our help sessions: our tutors include Chinese, Indian and 

Nepalese nationals along with U.S. citizens. 

Anxiety vs. exploration. The experience of using a computing device is well known to 

cause anxiety in elders, and our experiences bear this out. A common concern for computer 

owners in our group is that something they do will "break" their investment. Even routine 

activities cause anxiety as users fear accidentally going "off script". 

Many learners are fearful of going online because of stories of fraud and identity theft they 

have heard in the media. Without a basis of understanding for how malware and other 

threats work, they have no model for how to minimize their threat level. Anything can be a 
63 


threat, so many learners fear using a computer altogether. One unfortunate consequence of 

this anxiety is the reluctance to explore. For newcomers to a software product or service, 

there is a vital form of learning that comes from exploration. 

To complicate matters further, in practice it is often far from clear whether a user is a victim 

of true criminals or simply aggressive businesses pushing a product: 

Mitch is a 60 year old recreational computer user. He runs a small service based local 

business. He paid a company hundreds of dollars because they convinced him, after 

many hours on the phone, that his business needed to be on prioritized search lists for 

Coogle and Bing. However, Mitch did not know what the service was or how it helped 

his business, how he could access his accounts with the service, or where he would be 

able to see the effects of the service. After several months, he attended as a participant 

in the library help sessions and described his experience. Tutors determined after a lot 

of exploring and calling the company that sold the service to him what the service does 

and explained to him what he had paid for. Mitch's business has no online presence 

and being a local business, being searchable as an advertisement on search engines 

does not help him. 

In this case, Mitch was not a victim of fraud or theft but paid a legitimate business to help 

him, without understanding the services he was paying for. 

News coverage of malware and spyware, coupled with stories of privacy abuses by 

companies such as Google, have terrified our elderly learners: 

Marsha explained in great detail that if she used an online calendar service it would be 

easier for her to manage her busy schedule but someone on the internet would be able 

to spy on her and know where she was. Her biggest fear was that Coogle was going to 

know where she was because her schedule would be online. 

In another case, a senior user was overly suspicious of a legitimate online service that may 

actually have saved her money: 

Diane proudly announced that she had cancelled Amazon Prime. Evidently her 

husband had signed up for a trial membership and then was charged the yearly 

subscription price. She thought her husband had been tricked into paying for this 

online television service and that they were wasting money since they already had 

cable and don't watch anything online. She had no idea about the free shipping and it 

turns out that they are very frequent Amazon shoppers. 

Along with these stories of stifling anxiety, we see many cases of the opposite: senior users 

who trust too much. In the words of one tutor: 

1 often see older people at our sessions visiting sites I would call sketchy at best, or 

reading every email sent to them - because someone sent it to them, so it must be 

important. Often they attribute the email to an acquaintance or relative, even if it is 

junk mail or spam or a phishing attempt. I haven't seen anyone open a malware 

attachment, but I've had to help clean computers after people did so. In the real world, 

people are often less trusting or have simply learned to avoid the dodgy parts of town 

or throw away junk mail without reading it. Why don't these skills transfer? 
64 


Online at the Library. Learners and tutors meet at the local public library every Friday 

morning. The library presents a less intimidating venue than the university computer labs, 

and it represents a link between familiar, traditional forms of literacy and the new digital 

literacy. Tutors assign themselves to learners on an as-needed basis. A typical session has 

around 10-15 learners and 6-8 tutors, so tutors often alternate between more than one 

learner. There are computers at the library available for our use, but many people come 

with their own computers. 

The tutor and learner arrive at an informal set of goals and activities for the session. Tutors 

customize their approach to the perceived level of competency of their learners. Many 

learners attend the sessions regularly and continue working on issues from a previous 

session. Often the self-identified beginners work as a group separately with a tutor. At 

appropriate teaching moments, the tutors explain concepts to the learners to aid their 

understanding. We encourage learners to persist through challenging situations, keeping 

the amount of "steering" done by the tutors at a minimum. We also encourage tutors to 

articulate their own habits and approaches to working online, so that they can serve as a 

model for our senior learners. 

Tutors, of course, constitute a learning community of their own. Students from Michigan 

Tech can join the tutoring team at any time. Upon entering the program, a process of 

legitimate peripheral participation ensures: new tutors watch experience ones in action, 

then team-teach with an experienced tutor or take on small-scale tasks until they achieve a 

level of comfort. Tutors contribute to a project blog, reporting their weekly interactions 

from which the stories in this paper derive. Our posts are essentially ethnographic studies 

that fill out the details about each learner with every weekly meeting. We are now at an 

interesting stage where some learners have expressed the confidence and willingness to 

"give back" and serve as tutors themselves. 

In addition to the one-on-one tutoring sessions, we have offered occasional short courses on 

particular themes. Most relevant to this hearing is a course entitled "Staying Safe Online". 

Attendees are presented with examples of fraudulent email material side by side with 

traditional physical junk mail. The course attempts to tap into seniors' intuitions about 

traditional forms of communication, encouraging them to maintain a similar skepticism 

about electronic correspondence. 

Conclusion. It is clear that basic literacy in secure online behavior is an essential weapon 

in "Fighting Fraud against the Elderly". We believe that Online at the Library serves as an 

effective and replicable learning model: 

• A safe place for learning, asking potentially embarrassing questions, and gaining 

strength from seeing peers in the same position. 

• Personal contact with mentors who can model appropriate behavior and attitudes. 

Development of healthy online behavior, finding a balance that keeps seniors safe 

without stifling their creativity and productive energy. 

This program has served over 80 local residents and engaged 40 students as tutors. The 

BDB team has developed graduate courses on digital literacy, accessibility and usability 

design for older users. BDB members are developing a socio-technological approach to help 

older learners with "wayfinding" strategies for navigation within web applications. This 

approach involves small interactive group learning activities along with software tools for 
65 


annotation of web navigation. Over the next two years, BDB will help build similar learning 

programs, using our techniques, in the central and eastern regions of the Upper Peninsula. 

The goal by 2017 is to have 200 older learners, 100 student tutors, and a tested program to 

serve as a national model. More information can be found at the Breaking Digital Barriers 

website: http:/lmtu.edu/bdb 
66 

Mr. BURGESS. The Chair thanks the gentleman. 

Ms. Stanger, you are recognized for 5 minutes for questions, 

please. 

STATEMENT OF TOBIE STANGER 

Ms. STANGER. Chairman Burgess, Ranking Member Schakowsky, 

committee members, thank you for inviting me to speak. My tame 

is Tobie Stanger. I am a Senior Editor at Consumer Reports. And 

I also represent today its advocacy arm, Consumer Union. 

You may wonder why Consumer Reporters, which is better 

known for rating products and cars, would highlight elder scams. 

Retirement security is at its core, a consumer issue. People have 

a right to expect that their hard-earned savings are protected. 

When I was asked to testify, I was a bit nervous, but then I 

thought about Edna Schmeets, an 86-year-old great-grandmother 

from Harvey, North Dakota, who had the courage to testify in Federal court earlier this year against a man from Jamaica who was 

part of a vast conspiracy to defraud dozens of people, mainly seniors, in a sweepstakes scam. Edna herself lost nearly $300,000, her 

life’s savings. 

Most seniors would not be willing to talk, but Edna was angry 

and she wanted her money back. So in spite of being nervous and 

scared, she spoke out. Sadly, her money may never be returned, 

but she helped convict a really bad guy. 

Edna was one of eight victims who spoke for me for a recent article on elder scams that you mentioned that appeared in Consumer 

Reports. I am truly grateful for their willingness to have their 

names and portraits published. They told me they did it to warn 

other people so others might be spared. This isn’t typical of elder 

scam victims. Most elder fraud cases go unreported. The victims 

are embarrassed and ashamed. Among other things, they are 

scared that if they tell, people will think they are unsophisticated 

or stupid or losing their cognitive abilities. But honestly, these 

scams can victimize anyone. 

The criminals catch people off guard. They sound very convincing. They require their victims to make very quick decisions, 

and they insist on secrecy. This is their job. They do it all day long. 

Their tactics could work on anyone in the right circumstances, but 

the scammers know that seniors, in part because they are proud 

and want to retain their dignity, often keep quiet, so we don’t hear 

about these crimes as often as we should, and that is my point 

today. 

These scams are rampant. They are growing in number and complexity. They run the gamut from to sketchy phone and mail solicitations to shady contractors to dishonest financial advisers. We 

need to document them better, and seniors need to feel safe about 

speaking up about their victimization and getting help. 

Understandably, they are concerned about losing independence if 

they admit they have been taken or need help avoiding getting 

conned in the first place. But there are measures they can take 

that preserve their dignity and independence. For example, there 

is a Web-based service called EverSafe. The service identifies any 

unusual activity in a senior’s account and then sends alerts to the 

senior or to a trusted adult child or other third party, but the senVerDate Mar 15 2010 11:54 Oct 26, 2016 Jkt 037690 PO 00000 Frm 00070 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X92ELDERFRAUDXNDFPSTMT\114X92ELDERFRAUDPENDING
67 

ior doesn’t have to allow direct access to the account, so the senior 

can retain control. 

Of course, Consumer Reports recommends signing up for the 

Federal Do Not Call Registry and the Direct Marketing Association’s mail preference service to reduce unwanted calls and mail. 

We have also tested and recommended some call-blocking machines 

that block robocalls which can be the basis of phone scams. Notably 

we found a free robocall blocking service called Nomorobo, and it 

is very effective; but it is not available on traditional land lines, 

which is what seniors often have. There is no reason why tools to 

block unwanted calls can’t be made available on land lines, but the 

three top land-line providers don’t offer them. 

So Consumers Union has an End Robocalls campaign that has 

gathered more than half a million petition signatures. We are soon 

going to deliver it to the phone companies to demand that free, 

more effective tools be offered. 

These developments can help stem elder scams, but they must be 

supplemented by communication and education. Elder financial exploitation needs to be part of the national conversation. We have 

published articles about it. Other publications have. But I would a 

lot of to see a Hollywood movie on this. It is a plot with poignant 

stories, heroic investigators and victims, piles of money, and even 

some exotic locations. 

Thankfully, some seniors are willing to speak out. There is an 

acting troupe in Los Angeles called the Stop Senior Scams Acting 

Program. The actors are all seniors. The oldest is 97. They write 

skits dramatizing scams, and they perform them in senior centers 

and other locations. Some of the actors themselves have been scam 

victims, so they can speak from experience. After performances, audience members often come up to them to report that they, too, 

have been scammed. These people might not be willing to tell their 

own families, but they will tell their peers. 

There is no dearth of creativity, initiative, and will, to make a 

dent in this horrific crime. But seniors themselves need to feel it 

is safe to talk about it with law enforcement, adult protective services, peers, and their families. As one of the actors in the Stop Senior Scams Program said, don’t keep it a secret. You are not the only 

one. Thank you. 

[The statement of Ms. Stanger follows:] 

68 


Statement of Tobie Stanger, Senior Editor, Consumer Reports 

Before the U.S. House of Representatives Committee on Energy and Commerce 

Subcommittee on Commerce, Manufacturing, and Trade 

"Fighting Fraud Against the Elderly, an Update" 

Friday, October 23, 2015 
69 


Chairman Burgess, Ranking Member Schakowsky, committee members, thank you 

for inviting me to speak. I come here today as a representative of Consumer Reports, 

and its advocacy arm Consumers Union. 

You may wonder why Consumer Reports, which is better known for rating products 

and cars, would highlight elder scams. Retirement security is at its core a consumer 

issue. People have a right to expect that their hard-earned savings are protected. 

When I was first asked to testify, I was bit nervous. But then I thought about Edna 

Schmeets, an 86-year-old great grandmother from Harvey, North Dakota, who had 

the courage to testifY in federal court earlier this year against a man from jamaica 

who was part of a vast conspiracy to defraud dozens of people, mainly seniors, in a 

sweepstakes scam. Edna herself lost nearly $300,000-her life savings. 

Most seniors would not be willing to talk. But Edna was angry and she wanted her 

money back. So, in spite of being nervous and scared, she spoke out. Sadly, her 

money may never be returned, but she helped convict a really bad guy. 

Edna was one of eight victims who spoke with me for a recent article on elder scams 

that appeared in Consumer Reports. I am truly grateful for their willingness to have 

their names and portraits published. They told me they did it to warn other people, 

so others might be spared. 

1 
70 


This isn't typical of older scam victims. Most elder fraud cases go unreported. The 

victims are embarrassed and ashamed. Among other things, they're scared that if 

they tell, people will think they're unsophisticated or stupid, or losing their cognitive 

abilities. 

But honestly, these scams can victimize anyone. The criminals catch people offguard and sound very convincing. They require their victims to make very quick 

decisions, and they insist on secrecy. This is their job. They do it all day long. Their 

tactics could work on anyone in the right circumstances. But scammers know that 

seniors, because they're proud and want to retain their dignity, often keep quiet. 

So we don't hear about these crimes as often as we should. And that's my point 

today. These scams are rampant. They're growing in number and in complexity. 

They run the gamut from sketchy phone and mail solicitations to shady contractors 

to dishonest financial advisers. We need to document them better. And seniors need 

to feel safe about speaking up about their victimization and getting help. 

Understandably, seniors are concerned about losing independence if they admit 

they've been taken, or need help avoiding getting conned. But there are measures 

they can take that preserve their dignity and independence. For example, there's a 

web-based service called EverSafe. The service identifies any unusual activity in a 

senior's account, and then sends alerts to the senior, or to a trusted adult child or 

2 
71 


other third party. But the senior doesn't have to allow direct access to the account. 

So the senior can retain control. 

Of course, Consumer Reports recommends signing up for the federal Do Not Call 

Registry and the Direct Marketing Association's mail preference service, to reduce 

unwanted calls and mail. We've also tested and recommended some call-blocking 

machines that block roboca!ls, which can be the basis of phone scams. 

Notably, we found a free, robocall-blocking service called Nomorobo very effective. 

But it's not available on traditional land lines, which often are what seniors have. 

There's no reason why tools to block unwanted calls can't be made available on land 

lines, but the three top land-line providers don't offer them. So Consumers Union 

has an End Robocalls campaign that has gathered more than 500,000 petition 

signatures. We're soon going to deliver it to the phone companies to demand that 

free, more effective tools be offered. 

These developments can help stem elder scams, but they must be supplemented by 

communication. Elder financial exploitation needs to be part of the national 

conversation. We've published articles about it, but I'd love to see a Hollywood 

movie, too. It's a plot with poignant stories, heroic investigators and victims, piles of 

money, and even some exotic locales. 

3 
72 


Thankfully, some seniors are willing to speak out. There's an acting troupe in Los 

Angeles called the Stop Senior Scams Acting Program. The actors are all seniors. The 

oldest is 97. They write skits dramatizing scams and perform them in senior centers 

and other locations. Some of the actors themselves have been scam victims, so they 

can speak from experience. After performances, audience members often come up 

to them to report that they, too, have been scammed. These people might not be 

willing to tell their own family, but they'll tell their peers. 

There is no dearth of creativity, initiative and will to make a dent in this horrific 

crime. But seniors themselves need to feel it's safe to talk about it with law 

enforcement, and with their families. As one of the actors in the Stop Senior Scams 

program said, "Don't keep it a secret. You're not the only one." 

4 
73 

Mr. BURGESS. Thank you. 

And I thank both of you for your testimony. We will move into 

the question portion of the hearing. We will begin the questioning 

on this side. I will yield to Mr. Harper 5 minutes for questions, 

please. 

Mr. HARPER. Thank you, Mr. Chairman, and thanks to you both 

for being here. Some great stories. I know your class is very excited 

today. They are probably watching as we speak, so we wish them 

well, just in case they are there. 

Ms. Stanger, you have spent obviously a significant amount of 

time putting together the Lies, Secrets, and Scams piece for Consumer Reports. What was the most shocking thing you learned 

while you were researching the article? 

Ms. STANGER. I think the most shocking thing is that it really 

is so rampant. It seems everywhere. Every person I turned to in 

the elder-justice community and adult protective services, when I 

would call them and say I was doing this, they would say, thank 

you. We need to have this publicized. Please. It is everywhere. 

In my own family with my husband and I together, we can think 

of four instances of various elder abuse situations. It is everywhere, 

and it is really underreported. It was very hard to get eight people 

to talk with me. It took a lot of effort, and I am very grateful for 

their bravery, because people are afraid to talk. And so the conversation, I think, needs to change to not being afraid. 

Mr. HARPER. And it is so humiliating for them to have to share 

that, and they would rather just suffer in silence, so that does take 

a lot of courage to do that. I know dealing in the last year with 

a gentleman, a senior, who fell for one of the scams of, you know, 

‘‘send us some money and you are going to get a lot of money 

back.’’ He was thinking, This will help me pay for my adult kids’ 

graduate school, and I am going to take care of my wife, and we 

said don’t do it, and he did it anyway, and he kept doing it to the 

tune of probably most of his savings, even though his wife—I don’t 

know yet that he still has grasped what he has done. 

And it is a very difficult thing because when you have people 

that can’t really control that, and fall prey to that, and they don’t 

have someone overseeing, it is very difficult. I know in your article 

you talk about some of the great senior-led initiatives to educate 

their peers about the fraud risk. Have you seen any similar initiatives to educate caregivers, and what experience with the caregivers to the seniors did you have in your research? 

Ms. STANGER. Well, I think the CFPB’s program that they talked 

about where they have got several booklets to educate caregivers 

and people who have fiduciary duty over seniors’ accounts, I think 

those are very helpful. Those are pretty new, and as I understand 

they are being promulgated in different States, so I think that is 

very helpful. But yes, I think caregivers need more education. That 

is something we can started to do in our publication. 

Clearly, I spoke with one woman who, exactly the same thing, 

her father and mother were involved in a scam, and she just did 

not know how to stop them. And so widespread education can be 

very useful. I found a victim specialist from the FBI in Los Angeles 

who people come to her when they have relatives who are repeat 

scam victims. And these are often the toughest because they have 

74 

developed an emotional relationship with the scammer often, and 

they really trust them. And this woman from the FBI, she tells 

people call me. If somebody calls you, you call me, and I am going 

to walk you through this. I am going to keep you from getting 

scammed again. And sometimes it requires really, you know, handin-hand cooperation. 

Mr. HARPER. And some of these, you will see that they will get 

into it. They will send them a few thousand dollars, and, well, we 

have got these additional costs over here we are going to have to 

cover, and all of a sudden they think, well, I am in this far and 

they keep going and going. And it is just heartbreaking what you 

see. But thanks for your work on that. And I really do appreciate 

it. 

Professor Wallace, in your testimony you talk about how in your 

experience you have seen a lot of anxiety about using technology, 

and very naive trust about technology that pose risks for consumers, and things are constantly moving as we see; and my adult 

daughter has, because I know we are on the record here, has quit 

using Facebook once my wife, her mom, started getting on 

Facebook. 

Mr. WALLACE. Facebook is for old people. 

Mr. HARPER. There you go. There you go. So we are seeing all 

this transition there. So what are the most effective methods you 

have found to teach seniors that they can be safe online without 

thinking they are going to break their device or trusting every single popup that comes through on the screen? 

Mr. WALLACE. Yes. It is a tough problem. One thing that helps 

a lot is being among peers, and realizing that they are not alone 

and that other newcomers to the technology are struggling with the 

same kinds of issues. 

One exercise that we have done in the past that I think has been 

pretty effective, has been considering what they do with physical 

postal mail that they get, that looks suspicious. It has a certain 

smell to it, right? And you get something in the mail and you look 

at it and say, no, I am going to—I am going to throw this in the 

waste bin right. 

Mr. HARPER. Professor Wallace, my time is long over. I am going 

to yield back and hopefully they can finish back up on this later. 

Mr. WALLACE. Oh, OK. Sure. Sure. 

Mr. HARPER. Thank you. 

Mr. BURGESS. The Chair thanks the gentleman. The gentleman 

yields back. The Chair recognizes the gentlelady from Illinois, 5 

minutes for questions, please. 

Ms. SCHAKOWSKY. First, Ms. Stanger, during our first panel we 

talked about shame, and we have talked about it again in this 

panel. So I am wondering if there are tools, other than the individual having to report, that couldn’t be more effective? In your article you mentioned several cases in which a bank allowed older 

people to repeatedly withdraw large amounts of money. 

And presumably when it was out of order for that particular person, and actually did nothing to investigate whether fraud was involved, and perhaps didn’t even notify anybody, until the point at 

which the person attempted to get a loan from the bank. So what 

75 

should be, or is being done, to encourage banks to take a more active role in intervening in these situations. 

Ms. STANGER. So I don’t have that much information on this except that there are some banks that are making it part of their 

companywide effort, such as Wells Fargo, I understand, where they 

are educating everybody to be a reporter. Not every State has the 

same law, in terms of who is supposed to be a, you know, has to 

report when they think elder fraud is happening. It varies from 

State to State. 

There are companies themselves that are taking it upon themselves to do this. And I can’t speak in great detail about what the 

bankers associations are doing, but there are some banks that are 

saying if you think there is something going on, you need to speak 

up right away and not wait until time goes by. But certainly more 

education at all levels from the teller—you know, the teller is often 

the person that sees the senior taking out the money, and it is a 

fine line between letting them have control over their money and 

putting up a red flag. 

We also think it is a good idea for family members to have a relationship with the local bank. Often seniors do go to local branches. 

I don’t know how much they are doing their banking online, as opposed to other population groups, but often seniors go to the bank, 

especially if they are going to be taking out a large amount of 

money. They are going to go to the teller, and so it is a good idea 

for the families to have a relationship with the bank so that this 

kind of conversation can be had. 

Ms. SCHAKOWSKY. I have a feeling if that woman who was trying 

to help her son Will, purportedly in Peru and needing help, even 

if the teller would have said you are taking out a lot of money, that 

she might have shared that story. Oh, my grandson is in trouble, 

and I am trying to help him. It just seems like those kinds of conversations even could help. I don’t know how one enforces that 

however. 

I have one other question for you and then for Professor Wallace. 

I think some people think that these might be small scam operations, but you pointed out that actually some of these are fairly 

big-time operators. I wonder if you could talk about that a little 

bit? 

Ms. STANGER. So we looked at something called the Jamaican 

lottery scam, which, you may have heard about. It operates not just 

out of Jamaica, but other foreign countries as well, Costa Rica, 

Israel, Canada, I think. This is where people are called, elderly 

people are called. The scammers have a list that they have collected. It may be because somebody has responded to something in 

the mail, and then they sent something back, their name, maybe 

a phone number, maybe even some money because they think they 

are going to be receiving something. 

And these lists are created, and these scammers get a hold of 

these lists, and they know now that this is somebody who has already responded once to a mailing. And so, then they will call these 

seniors, and they are very, very organized. They know how to get 

seniors’ emotions. They know how to draw the senior in, and they 

often use threats, and these things go on for months and months, 

76 

and people lose hundreds of thousands of dollars. So they are very 

organized. 

Ms. SCHAKOWSKY. Mr. Wallace, your testimony mentioned the 

Breaking Digital Barriers program at Michigan Tech, that could 

serve as a national model. What are some of the common themes 

that you observed in seniors that have taken that course, and do 

you believe these trends will be reflective of seniors nationwide? 

Mr. WALLACE. Yes. Certainly the anxiety and the fear of adopting the technology is a profound one, and we need to balance this 

concern about fraud, which is absolutely legitimate, with something 

that encourages them to explore in a safe way. 

And so finding that balance is really a key issue for us. And we 

still struggle with it, but we are looking for metaphors and ways 

in which we can relate it to their life off line. What do you do to 

be sensible and safe and secure in your regular life? Can you transfer those kinds of skills over to the digital world? And so, that is 

one of the things that I think is certainly—— 

Ms. SCHAKOWSKY. Although I do want to say that, the Pew Research Center reports 35 percent of Americans age 65 and older 

currently use social media, up 27 percent from 2014. So more and 

more people are. And in 2014, Pew reported 59 percent of this age 

group using the Internet, with 71 percent going on daily. So we are 

seeing more and more seniors. 

Mr. WALLACE. For sure. And especially in our area, it is vital for 

them to go online because so many of their family members live far 

away now. And so it is a tremendous asset for them, really a lifeline in a way. So it is important for them to adopt this technology. 

Ms. SCHAKOWSKY. Thank you. I yield back. 

Mr. BURGESS. Great. The gentlelady’s time has expired. The 

gentlelady yields back. The Chair recognizes Mr. Mullin of Oklahoma, 5 minutes for your questions. Please. 

Mr. MULLIN. Thank you, Mr. Chairman, and thank you both for 

being here. Professor Wallace, what gave you the idea to even start 

this up? Just taking a look at you, I am very impressed—not by 

your looks—I am just very impressed by the idea that you would 

take this initiative. I mean, was this something driven by you, by 

your students, what made you even think of this? 

Mr. WALLACE. One driving force is, the type of material that I 

teach to our students involves understanding users of the technology that they are developing. So our students are going to be developing the software that we all are going to be using in just a 

few years. I want them to understand what regular people are like 

and certainly people who don’t have that kind of deep understanding of the technology that they do. 

Very often what happens is software people will develop software 

for other software people, and so we need to have a broader view 

of what the user base is going to be like. And by the way, one thing 

I want to insert here—I got a message from one of my colleagues 

in Breaking Digital Barriers—this is not exclusively a senior problem. Digital literacy is something that is a concern for people 

across age groups. 

We have worked with people who are, well they are younger than 

I am, so by definition, they are not old, who struggle with the technology, too. And so in general this is a larger issue that impacts 

77 

seniors greatly, but I think we also need to keep in mind it is a 

broader issue. 

Mr. MULLIN. Thank you for seeing a need. And then I am assuming that once you started down this path, it became a passion because the amount of work you have put into this, this wasn’t just 

a class project. Did you get personally involved in it to some degree, surprisingly? 

Mr. WALLACE. Yes. I think it is fair to say that everyone who has 

participated in it, students, faculty, really take a personal interest 

in it. And it is the kind of work that is so much fun that it doesn’t 

feel like work. 

Apart from the learning that goes on in our sessions, it is also 

a social session, and it is a way for generations to meet and work 

together in a productive way. It is just a lot of fun. 

Mr. MULLIN. Well, thank you. Ms., I hope I say this right, 

Stanger did I say that right? 

Ms. STANGER. Yes that is right. 

Mr. MULLIN. Now, kind of the same question applies to you, too. 

The way I understand this wasn’t exactly your background. You 

just started down this path, and one door opened to another, and 

now it has become almost a passion if I am seeing that right. Was 

there something that led you down this road? 

Ms. STANGER. Well, I would say number one, it is my passion. 

But I am a personal finance editor. I am a senior editor in personal 

finance at Consumer Reports. This is actually the second piece we 

have written on this. 

Two years ago we wrote more about scams, or I should say fraud 

committed by family members and people that the seniors know. 

This one is more about scams by strangers. But, yes, I feel very 

strongly about it. 

And Consumers Reports and Consumers Union, retirement security is very important to us. I write on all sorts of retirement 

issues, so I am very interested. But you can’t help when you speak 

to these seniors, even one or two of them, you have to get drawn 

in because it is just, it is heartbreaking, and there is so much that 

we can do, I think. 

Mr. MULLIN. If you could pick maybe two things that you would 

like to see for, maybe there has to be a required personal interaction, there has to be something signed before you could do it, 

what would you give this panel or this hearing, what would you 

give us two suggestions to say, hey, work on this? 

Ms. STANGER. Believe it or not, I think this Stop Senior Scams 

dramatic group was very impressive, the only one I know of in the 

country. And I don’t think it is particularly difficult to fund a little 

theatre group in all communities in the country where they could 

be communicating to each other. This is senior to senior. It gets the 

actors themselves out of the house. 

You know, isolation is a major part of this. Getting people out, 

getting people into the community to talk to each other is very important, and there is that communication. So that is, I just think 

dealing at a grass-roots level can really make a difference, and I 

think that was reflected in many other of the statements. 

What else? I think just supporting the work, I think the FTC is 

doing some wonderful work. The Pass it On really is a very useful 

78 

and, again, grass-roots effort, and I think the, CFPB’s, specifically 

collection of anecdotes from people is very helpful. Obviously they 

don’t always know what the age is, I think, am I right that they 

don’t collect the ages of all the people who report, but certainly if 

people are reporting about problems with reverse mortgages, they 

know that is somebody 62 and older. 

The more we can get in anecdotes, that helps me as a reporter, 

and it just helps in collection of data. We need more data. 

Mr. MULLIN. Thank you for the work that both you all do. Mr. 

Chairman, I yield back. 

Mr. BURGESS. The Chair thanks the gentleman. The gentleman 

yields back. The Chair recognizes the gentlelady from Indiana, 

Mrs. Brooks, 5 minutes for your questions. 

Mrs. BROOKS. Thank you, Mr. Chairman. Professor Wallace, 

prior to coming to Congress, I was at IV Tech Community College, 

as a senior administrator, and I was there during the recession 

from 2007 until 2011. And I must say that college and community 

college exploded in enrollment during that time period because so 

many people had gotten laid off of their jobs, of all ages, but particularly those who were 40, 50 years old, who had gotten laid off 

their jobs needed to come back to college because they had no digital literacy skills. And they couldn’t even apply for jobs online because of that digital literacy or lack, illiteracy. 

So I am very pleased that you are doing this. How would you encourage other schools? I mean, how much are you talking about 

this? Obviously this is a nice platform for you to publicize, but how 

are other communities, you know, are they taking up your baton 

and, you know, doing what you are doing, or are you a unique program in the country? I am really not that familiar with the various 

programs. 

And then, secondly, what are some of the strategies you are 

using that are actually teaching the seniors? 

Mr. WALLACE. We are certainly not unique. There are several 

other efforts in this regard. I want to include SeniorNet, CyberSeniors, Generations Online. There are a lot of groups that are 

doing similar kind of work in this space. 

Mrs. BROOKS. Do they actually go into the communities like you 

are doing, or are they more online educational tools? 

Mr. WALLACE. There are a variety of approaches. Some of them 

are truly working one-on-one. So, I don’t want to claim that we are 

the only ones doing this kind of work. 

Obviously this is a tremendous platform to raise awareness. I 

was also invited to the White House Conference on Aging over the 

summer which also gave me a platform to speak out about this. 

And certainly within the State of Michigan, there has been a tremendous amount of interest that has come up from that, and so we 

are working now in conjunction with other universities. I feel like 

it is a very easy model to implement, and what we are in the business of doing right now is, codifying what we do at Michigan Tech 

so that we can distribute that to other schools and give them a leg 

up on the whole process. 

Mrs. BROOKS. What are some strategies that you have found that 

have worked best when you are teaching? 

79 

Mr. WALLACE. Well, as I said in my statement, having tutors sort 

of model their own behavior and speak out loud about it is an important piece of it. So having an experienced computer user say, 

well, looking at what is on the screen, well, in this case I would 

be thinking about this, and I would be worried about this, and I 

would want to try out this. 

And working out what is going on in their minds, saying it out 

loud is an important piece to articulate that this is a process just 

like working with any other aspect of life. You have to weigh the 

pros and cons and think about things in a sensible way. For instance, looking at junk mail that you get in your mailbox compared 

to a potential scam by email. That kind of brings it back to familiar 

territory, which I think is useful. This is not something entirely 

new. It is different, and you have to learn how to use it, but it is 

not entirely. 

I just want to say that Ms. Stanger and I are both in solidarity 

on this issue, that education in this regard is an extremely effective 

and low-cost way of addressing this problem of fraud online. A little bit of education I think can go a long way to stem some of the 

problems that we see that take immense amounts of time and efforts to cure later. 

Mrs. BROOKS. Thank you. I know we focus a lot on education of 

our young, of the children getting online, but we don’t spend nearly 

enough time educating seniors. Ms. Stanger, I would like you to 

know that every time I go home and visit my parents, Consumer 

Reports is front and center. 

But I do want to ask you, are there enough, in you research, 

available and accessible tools, for seniors to report? Have you found 

in your research, are there enough tools, and do they know what 

they are? 

Ms. STANGER. I think the last part of your question is the important thing. There are plenty of tools. We have several, in our article, several places where people can report. Obviously AARP is very 

involved, and they have their scams and fraud page. The CFPB, 

there is something called the Financial Fraud Enforcement Task 

Force stopfraud.gov, where you can report. 

On the Senate side, they have the Special Commission on Aging 

Hotline, and that is a good sort of place you can call up, and they 

will tell you where to go for help. But I think a lot of people, the 

first person they might go to report it to is the police first, is local 

law enforcement. And my understanding is that there could be 

more training with local law enforcement. I spoke with local prosecutors who said, you know, there are still police who when somebody comes to them and say I have been scammed and this person 

called me, the cop said, well, is thinking to themselves, well, that 

was kind of stupid. Why did you do that? And they have to be 

trained. 

I understand that the Justice Department is getting involved in 

training local police to spot elder abuse, not just financial elder 

abuse, but also physical abuse and emotional abuse and so forth. 

So at the very local level, where people are doing the reporting, I 

think there has to be better training. In some communities, some 

large communities there are task forces, in Seattle, I think in San 

80 

Diego, where different groups have come together and really created a public face. And that can help. 

In San Diego there is a fellow named Paul Greenwood who is an 

assistant district attorney, I think. And he is very well known, and 

one of the people that we profiled was involved in a scam. He got 

caught—he didn’t get caught, he sent money in a scam, and then 

he thought better of it and he told a friend, and the friend went 

to Paul Greenwood’s office, and Paul Greenwood working with I 

think it was Wells Fargo, was able to stop the payments that he 

was making to a scammer. 

So it can work, not always, but it can work sometimes if people 

report it quickly and they know where to go. And on a local level, 

I am not sure that that always happens. 

Mrs. BROOKS. Thank you. Thanks for your efforts in protecting 

our seniors to both of you. Appreciate it. 

I yield back. 

Mr. BURGESS. The gentlelady yields back. The Chair thanks the 

gentlelady. 

The Chair recognizes the gentlemen from Kentucky, Mr. Guthrie, 

5 minutes for questions, please 

Mr. GUTHRIE. Thank you very much. Thank you for being here. 

And I guess a lot of us prepared the same kind of a question. So 

it is very similar, because I was going to ask you what the biggest 

take-away is you got from the aged seniors. But what in your, Ms. 

Stanger, in your article, but what do you think was the common— 

was there a common thread—you said isolation. I think there 

seems that people are isolated, and so when the phone rings they 

answer the phone and engage in conversation. But is there something common among the aged that we should be looking for, or 

several things that were common? 

Ms. STANGER. So one common thread is that they—well, in many 

of them they were acting, sadly, because they wanted to provide for 

somebody, for children or grandchildren. They thought this would 

be great. You know, I am getting these winnings and it can help 

me. The priest that we—Father Ortiz who we profiled, he was hoping to get the money and use it to fund a school. 

The scammers know this. They really know how to just push 

those emotional buttons, and that is what is sad. The oldest people 

who were scammed, people in their 80s, those I have been told, and 

it seemed to be true from my research, they get scammed for bigger 

amounts of money. Younger people maybe are a little bit more likely to report, and maybe they don’t go as far. 

But in general it is because people really were—they really trusted these scammers at some point, and the other major thing is that 

they were told: Don’t tell anybody, and so they kept it to themselves because they were afraid of what would happen if they did 

tell. And that is why they were scammed by so much. 

And finally when it finally either somebody caught on or they 

themselves thought, you know what, this isn’t sounding right, and 

then they reported. So it is the secrecy. 

Mr. GUTHRIE. Yes, no, I guess another question I would say what 

do you think we should be looking for in our district. But I have 

a friend who had a older brother that was being scammed and for 

several hundred thousand dollars and knew it was going—and 

81 

tried to get him and he couldn’t get him to stop. And there is no 

legal way because then he was just an adult. Have you seen that 

in—were some of the others trying to—family members saying, 

‘‘Don’t do this. This is scamming,’’ and it just keeps going or—— 

Ms. STANGER. Yes. I mean, I did—— 

Mr. GUTHRIE. And I think that is the trust they build. I didn’t 

think about that case. You just said that. It was the trust that they 

build with the scammer. 

Ms. STANGER. That is right. 

Mr. GUTHRIE. Which is an oxymoron, I think. Trust with a 

scammer, but—— 

Ms. STANGER. It is true. Unfortunately, some of the worst cases, 

the repeat cases, they develop a relationship with the scammer. 

And relatives are saying, you know, ‘‘You can’t do this, Dad. No, 

no, no.’’ This is true, you know. And they trust the scammer more 

than they trust the adult child. 

I am at a loss, really, to know what to say except that, if a senior 

can at least be told, you know what, they can be—if they can be 

shown some of the things that don’t make sense, then maybe they 

will start to realize, Oh, you know, this Web address, that doesn’t 

seem right. It doesn’t have a dot-gov at the end. Right. 

Mr. GUTHRIE. Right. 

Ms. STANGER. You know, some of these things that seniors may 

not think about, the URLs and so forth that somebody younger 

knows about, just knows. You know, the pop-up that says Microsoft 

says that you have a problem with your computer. ‘‘Click here.’’ 

Well, a lot of younger people, not all, but a lot of younger people 

will know, ugh, ugh, ugh. I am not going there. But somebody who 

is not as familiar won’t know. And so it is just education. 

The victim specialist in Los Angeles said that was some of the 

victims that the she dealt with she actually wrote down something 

like a script for them to put next to the phone so when somebody 

called they knew what to say. It requires real preparation. It is almost an addiction for some people, sadly. 

Mr. GUTHRIE. So, professor, it might have been in this case, I 

was—Professor Wallace, I know Ms. Schakowsky asked you some 

questions. And ones she asked I was going to ask, but I don’t know 

if you ever got done your answer, because there were several questions was: What trends do you see in your online program? What 

are the trends and are there some sessions more popular than others? 

Mr. WALLACE. Trends. Well, certainly a trend toward mobile devices now. We get a greater variety of types of devices coming in, 

which makes it harder for us to keep track of—we are not familiar 

with all of them ourselves, and so it takes a little while to learn 

them. 

Actually, that speaks to one thing that I think we try to get 

across to our learners is that we don’t know everything. Even the 

tutors don’t know everything. But we have sort of ways of approaching something new. So maybe it is a new device, but it could 

also be, you know, a new Web site or a new service of some kind. 

And so we have ways of looking at it, checking it out, making sure 

it is legitimate, you know, and moving on. 

82 

So there is certainly a greater diversity, both in terms of the actual physical devices but also, really, in terms of the kinds of services that people are using. So that means that we have to teach 

them a more kind of agile way of approaching the technology. We 

can’t just teach them how to use, you know, gmail in its current 

form right now because if we lock them into that, it is going to 

change. The interface will change over time. And so we need to 

teach them these kind of deeper skills. 

Again, it is getting back to the idea of what kinds of approaches 

do you use in the physical world to ensure yourself that this is 

something legitimate and perceived from there. So those kinds of 

techniques, we try to transfer them over to this digital world. 

Mr. GUTHRIE. Well, thank you. And I appreciate you guys doing 

this. And my time is expired so I will yield back. 

Mr. BURGESS. The Chair thanks the gentleman. 

The Chair is going to recommend himself for 5 minutes for questions. 

I did let the other Members go first because I knew we were coming up on a vote, but it looks like we have got enough time to conclude this and adjourn the subcommittee before we go to record our 

votes. 

Ms. Stanger, I just wanted to know from you, what sort of response have you had since publishing the article that you did in 

Consumer Reports? 

Ms. STANGER. People in the elder-justice community, those are 

people who deal with, you know, lawyers and people in communities, workers who are very happy that it is out there because 

they think it gets the word out. 

Apparently the FTC called this little dramatic group to congratulate them. And maybe they will work together. That would be 

great. I haven’t looked at the letters we have got recently so I don’t 

know what readers are saying. We just hope that having it on the 

cover of a national magazine will get people to think more about 

it and think about it in their own lives. 

Mr. BURGESS. Certainly drives the interest factor. 

Professor Wallace, you may have noticed that you have arrived 

in a digital-free zone, and it is ironic because we are the principal 

committee in the United States House of Representatives that 

deals with technology and communications, and they provide us a 

pad of paper and a pencil. So there is room, there is room for improvement. 

But I just wanted to ask you, in the healthcare space we have 

something known at syndromic surveillance where, for example, 

tissue sales and decongestant sales at a drugstore may be an early 

tip-off that there is a flu epidemic in a community. Is there any 

way to use that kind of surveillance in your world where there is 

an increased level of scamming activity? 

I can remember as a kid reading in the newspaper, they used to 

call them pigeon drops where someone would come to town and 

take advantage of people. And you’d see an article in the newspaper about there is some scammers in town so be careful. Is there 

any way now in the digital world that you have of getting tipped 

off and then getting the information out that there is an uptick in 

this type of activity? 

83 

Mr. WALLACE. Boy, I do not know of any effort in the that regard. But you have given me a great idea to take back to some of 

my faculty colleagues at Michigan Tech who work in that space. If 

it doesn’t exist right now, I think that is a great idea. 

Mr. BURGESS. Well, I don’t even know if it is possible, but I also 

did not know, Ms. Stanger, in your article, about the little scratchoff money cards that people have. I didn’t even know you could do 

that. So, and I don’t know if there is any way of watching that kind 

of activity. That almost seems like legalized money laundering to 

me. 

Ms. STANGER. Well, I understand that that particular green dot 

card doesn’t have the capability anymore. So I think they are trying to, you know, eliminate that. But the scammers come up with 

new things. Somebody told me that now the iPhone cards, I guess 

they are cards that you can—or I don’t know, something—— 

Mr. BURGESS. Apple Pay. 

Ms. STANGER. Excuse me? 

Mr. BURGESS. Apple Pay. 

Ms. STANGER. Apple—something is being used. I don’t know if it 

is that, is being used. The scammers move on. They move on to 

new payment. They figure it out, unfortunately. 

Mr. BURGESS. Yes, they are much more facile than the United 

States Congress. 

And both of you have mentioned and it has come up in several 

Members’ questions, the isolation factor and how that is used and 

almost monetized to take advantage of people. Hard to know how 

to overcome that except that making families aware that that is a 

risk factor in this population. 

Mr. WALLACE. It is ironic because the isolation is something that 

really motivates their computer use, at least in our case. A lot of 

people don’t have relatives nearby, and so a great way to communicate is through social media and so on. 

And so the irony is of course then they are isolated and don’t 

have feedback. But hopefully we are providing a service for them 

that does provide that. Working together as peers and working 

with mentors who know is a help. 

Mr. BURGESS. And just as a general word to families to be on the 

lookout for when you know you have a family member who has 

tended to be isolated that they are perhaps at risk for being targeted by this type of activity. 

Professor Wallace, I just have to ask you one last brief question. 

It is off topic, but you referenced that Facebook was for old people. 

What is up with that? 

Mr. WALLACE. I am just echoing the sentiment of my children 

who say that young people don’t use it anymore. 

Mr. BURGESS. So where are they? They are not on Facebook, 

where are they? 

Mr. WALLACE. You think they are going to tell me? 

Mr. BURGESS. They will tell you. OK. It is in development. All 

right. 

I will yield back the balance of my time. And seeing that there 

are no further Members wishing to ask questions for this panel, I 

do want to thank our witnesses for being here today. 

84 

Before we conclude, I would like to submit the following document for the record by unanimous consent: a story by Ms. Stanger 

in the upcoming issue of Consumer Reports magazine. Without objection, so ordered. 

[The information appears at the conclusion of the hearing.] 

Mr. BURGESS. Pursuant to committee rules, I remind Members 

they have 10 business days to submit additional questions for the 

record. And I ask the witnesses to submit their response within 10 

business days upon receipt of such questions. 

Without objection, the subcommittee is adjourned. 

[Whereupon, at 11:35 a.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

PREPARED STATEMENT OF HON. FRED UPTON

Elder fraud is a serious problem that threatens the very financial stability and 

wellbeing of our seniors and their families. Sadly, it’s a problem that we are very 

familiar with in Michigan, and is an issue confronting every community and State. 

Seniors have always been targets for fraudsters, but the digital age has especially 

increased opportunities for predators of the elderly. 

From the Greatest Generation to the Baby Boomers, our retired and elderly population is projected to grow rapidly—in Michigan and across the country—and with 

it, the number of potential targets for elder fraud. By 2020, the number of Americans over 65 years old is projected to be 54.8 million, an increase of about 14 million 

since the last census. 

For those who have been unable to keep a family member from being defrauded 

in a scam, it is a heartbreaking occurrence. While some may view it as a ‘‘petty 

crime,’’ it is not. 

The consequences are real. And the effects are lasting. When fraudsters trick the 

elderly into parting with often limited retirement funds, they take more than just 

money. Many of these schemes also rob victims of their independence, dignity, and 

self-worth. These are possessions that money can’t buy and that are difficult to reclaim. 

Make no mistake—the criminals who target the elderly put significant time and 

resources into their efforts. In one conspiracy, fraudsters posed as the victim’s 

grandson and grandson’s lawyer, claiming he was in a Mexican jail. These criminals 

took almost all of the victim’s savings with elaborate stories. In another type of 

scheme, callers target older Americans and develop various relationships with them 

over the phone, eventually leading to the victim sending money under false impressions. 

These scams often require extensive profiling of the intended victims and persistent contact—in other words, material dedication to the crime. Criminals with 

these kinds of resources to commit elaborate and evolving forms of fraud warrant 

robust responses from Government at all levels. 

We in Congress, as well as regulators and law enforcement owe it to seniors to 

crack down on this despicable activity and ensure enough is being done to stop the 

perpetrators. 

We need to make sure that our Government response also allocates the appropriate resources to protecting our seniors in every community. I appreciate the diligent work being done at the FTC, Michigan Tech, Consumer Reports, the CFPB, 

and Cook County to put a stop to elder fraud and I look forward to today’s very 

important discussion. 

85 


SENIORS AND THEIR FAMILIES LOSE 

BILLIONS OF DOLLARS EACH YEAR 

TO HEARTLESS FRAUDSTERS. 

LEARN HOW YOU CAN HELP. 

,..,~,·~· ·~u.r robust 87-year-old, got taken for .pu;;,vvv T

o understand how Beth an 

in less than one week last year, it's to 

know about her grandson, Will. a retired 

"pc·nnor!-<Yr:>ciiPteacher in National City, Calif:, 

beams when she of the the eldest of 

her five grandkids. As a and 

later a U.S. Coast Guard n'-''"'"''" 

terribly 

wife delivered Baker's first Baker was 

"Will is precious to me," Baker says. 

So when a man phoned one morning last December 

the news he delivered hit 

28 WATCH, COMMENT, SHARE & MORE at ConswnerReport.;;.org 
86 


··Jfe said my grandson \vas in Peru and 

was in trouble there," Baker recalls. Then 

lw rut another rnan briefly' on the line. 

Thinking it sound('d like Will, Baker am:-

iously said into the phone, '\\'ill'?" 

What BaKer unwittingly did pro· 

vide the caller with lwr grandson's <Ktual 

name, which was swiftly \VO\'l'n into a 

c-:tory. The c:dll'r said that Will had lwen 

a guest at a wedding in Peru. \\'hllC'· driv· 

ing, he had been involved in an accident 

1 hat injured a 7·year·old pedestrian. Th('ll 

a caller claiming to be Wiil's !a,rycr got 

on the line and s<tid \\'lll was in jail .:1nd 

needed money at once; there was no time 

to think or question. '·And he said if l 

sburcd this story with anyone, there'd be 

trouble for my grandson," Baker recalls. 

Buker hadn't seen \\'ill for a while, hut 

the tale seemed plausible to her. 

So, shaken and :.cared, she follO\vcd 

the caller's instructions \Vithout verifying 

the story with anyone in her family. She 

hung up, drove to her bank, \\"lthdrcw 

SS,OOO from savings, and bought 10$:100 

Green Dot f\1oncyPak cards at~~ CVS and 

a Ralphs supermarket. The contact called 

back as promised, and Baker scratched 

the card backs and read him the number;-; 

lOVE AND FEAR Scammers told Beth Baker 

to send money to rescue 

her grandson, Will (shown 

in photo frame). 

beneath. That was alllw m•etk'd to gt't 

an almost untraceuble $5,000 payment, 

ostensibly for Will's legal fees. 

The man called soon after to the 

injur('d child had died. Will needed more 

mone;..' to avoid 10 to 20 years in prison. 

Ag<.Jin, the c<.Jllcr stressed urgency and secrecy. 1\t his prompting, Baker withdrew 

SJLOOO, bought more :\loncyPak cards, 

and waited for lwr phone to ring. 

It did ring-again and again--each call 

detailing <1 lll'W twist on \Vlll's story and 

yet Jnothcr demdnd. Owr fH"e days Baker 

purchased 101 ~lonE'~'Pak cards and sent 

$6:1,000 almust all of1wr liquid savings. 

Baker hardly slept. She shaky 

and nervous. She skipped a visit to her 

husband, in nursing rare at a home for 

wcterans. She lied to her son, .Jim-Will's 

tathcr- about her acthltics. Once during 

a visir,Jim noticed thut her thumbnail tip 

black. lle didn't ask \vll;..· for fear oJ 

cmb<.Jrrassing hl'r. ln retrospect, he says, 

he realized that "'it w;1s from scratching 

off all those Green Do1 cards"'" 

\\'hen Baker appllcd hN local bank 

for a $1/i,OOO loan against her paicJ,off 

home, she attracted the attention or a 

manager. With patient prompting, B;;1ker 

ti.Ha!!y confessed. The hanker told her she 

was being scammed. They called Jim to 

conf1rm that \\'ill was saf"c. ·•r \V<lS so n.• 

!ievcd," Baker recalls. 

Jim Baker reported the crime' to tlw San 

Diego County district Gttorncy's Elder 

Abu"e Unit and fJred oif an angry lcttc1 

to Crecn Dot lie remembers the incldcnt 

with bitterness. ·'It madL' my motlwr 

qut>stion her own sanity and worth," he 

says. '·At her age that's hard to ger back.'' 

A t:risis in the 'laldng 

Baker's story mav sound unbelievable. You 

may tell yourself it could never happen to 

you or anyone ln y-our family. But don't be 

so sure. Financlal ck!er C~bust> broadly 

dcfiw.'d as the illegal or improper usc 

of the funds, property, or assets of people 

GO ;md older by famlly, friends, neighbors, 

and strangers-is rising fast. 

estimates of the crime's frequency 

,\ 20!0 survey of seniors by the 

nonprofu Investor Protection Tru~t projected that 1 S seniors had been taken 

advantage of linancial!y. A study last 

in the journal of(;enerallntL'nlctl 

:\Iedicine found that -L7 percent of Arneri~ 

cans·-about 1 in 20-reported that they 

had bt.'en financially exploited in their 

later years. The study provided pcrspec· 

tivc: If a new dist>ast' struck tllat same 

percentage of older Americans, research· 

wrote, "a public health crisis would 

likely be declared.'. 

The Federal Trade Commission 

that fraud complaints to its offices b) 

individu<.Jls GO Jnd olJer rose at least 

47 percent between 2012 and 2014. Seniors arc the predominant victim~ of impostor schemes, which criminals pose 

asg;oyernment ofi.lciab or other authority 

WATCH. COMMENT, SHARE & MORE at ConsumerReports.org 29 
87 


Ordinary People, 

Outsized Courage 

i, An unscrupulous financial adviser cheated 

Phillip Deeb, 77, of Bradenton, Fla. (pictured here 

with daughter DeneB), out of $186,000 before 

law enforcement stepped in (see page 35). 

2. !n the hope of claiming a prize to share with 

family, Edna Schmeets, 86, of Harvey, N.D., lost 

$297,000 to swindlers (see page 33). Here she 

poses with daughter Lisa. 

3. A phony letter sent to Father Michael Ortiz, 86, 

of S;m Diego said he'd won a $1.6 million sweepstakes. The retired Roman Catholic army chap· 

lain was directed to transfer advance taxes to 

4. The Rev. AI Cadenhead, 68, of Matthews, N.C., 

relinquished almost $16,000 in one day to an IRS 

s. A letter to Wade Gardner, 62, of Los Angeles, 

retail· 

before realizing she'd been conned (see page 28). 

B. louise Brown, 68, a retired nurse from Richmond, 

troubles abroad. The money hasn't been recovered, 

LIES. SECUETS, A~D SC:\ "\tS 

30 WATCH, COMMENT. SHARE & MORE at ConsumerReports.org 
88 


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89 


LIES, SEt.:RETS. AND SCA:\IS 

figures and dalm that money is owed, , annually. And as baby boomers age, the 

They also are hit hard by gambits involv- 1 pool of potential victims \Vill expand, 

ing prizes, sweepstakes, and gifts. with assets ripe for the pickpockcting. 

Older people's vulnerabilities-including isolation, loneliness, generally trust- ~fining for !\'larks 

ing natures, rclativ(~ wealth, and in some 

cases declining mental capabilities·-· make 

them ideal quarry for con E\'en 

those whose cognition is intact can be 

S\Vayed if they're stressed or depressed, 

or recently have lost a loved one. 

The amount lost to swindlers, whether 

Among the factors that keep seniors from 

reporting scams are deep humiliation 

once they realize they've been had, and 

tf.~ar of reprisals from scammers who may 

have madt:: threats to keep them silent. 

l\Iany may be unaware that they've been 

scammed. A 20il study conducted in i'\e\v 

are strangers or even relatives, is i York state found that in om~ year, just lin 

huge, with estimates ranging from al- 44 cases was actually reportetl 

most $3 billion to more than $30 billion "Victims arc often deeply ashamed," 

Anatomy of a Swindle 

says Elizabeth Locv,ry, former head oft he 

Manhattan district attorney's Elder Abuse 

lin it and now general counsel at EverSafe, 

a fraud-monitoring service for seniors. 

"They worry that if they're viewed as vul· 

nerable, they'll lose their independence." 

!n additlon to the psychic trauma, the 

crime can affect seniors' health. A 2009 

study of people 65 and older participat· 

ing in the Chicago Health and Aging Proj 

ect found that older people subjected to 

ahuse or neglect, including financial 

ploitatlon, were hospitalized at a higher 

rare than those who weren't victims. 

Many of the cons that seniors get taken 
90 


by are no different from those used against 

younger people. But criminals take pains 

to identify older people (sec "Anatomy of 

a Swindle," on the facing page). A clever 

scam mer who gets a senior on the phone 

will quickly tease out personal information. "They might say they want to send 

the person free medical supplies or that 

they just want to verify their personal information," says Hazel Beckers, a victim 

advocate at the Colorado Bureau of Investigation. "Either way, their Social Security 

number is requested." 

To create personal connections, they'll 

use "mirroring" techniques. "They'll say, 

'You're a veteran? I'm a veteran!'" says 

Debbie Deem, an FBI victim specialist 

based in Los Angeles who works with 

victims of financial crimes, including seniors. The flattery and emotional grooming are similar to techniques she has seen 

used by sex traffickers luring young girls. 

"lt's low-risk occupation," says jane 

Walsh, director of the Community Protection Division at the Boulder County 

district attorney's office in Colorado. 

"Why would someone rob a bank when 

they can sit at home ·with a phone and 

call a bunch of seniors"?" 

An Emotional Appeal Edna Schmcets, now 86, received a call 

in September 2011, the year after her husband died. A stranger claiming to be from 

an outfit called "Amt•rican Cash Awards" 

announced to the Harvey, N.D., retired 

farm wife and homemaker that she had 

won a $19 million prize. All she had to 

do was wire $3,500 in advance fees and 

taxes to someone in Portage, Ohio. She 

shouldn't tell anyone, the caller said, or 

she would lose the prize. To Schmeets, 

who had dreamed of providing a substantial inheritance to her four remaining children, eight grandchildren, and six 

great-grandchildren, the promise of a vast 

sum seemed a godsend. She complied. 

"They're good talkers," Schmeets says 

now, puzzling over how the scammers 

reeled her in over lO months. "They can 

just about hypnotize you over the phone." 

The caller, going by the alias Newton 

Bennett, then escalated his demands. Week 

LIES, SECU.ETS, AND SCAMS -~~---~~- --- ____________ ,_ ~ 

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Find regulatory actions, 

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• Arrange for limited 

i 

person with power of attorney, mandating a periodic 

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account could, for Instance, 

include a debit card and 

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] cred by Medtcare or other 

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WATCH, COMMENT, SHARE & MORE at ConsumerReports.org 33 
91 


LIES, SECRETS, ,\:-.JD SCA:\1S 

by week, Schmccts eYcntually cashed in to stop. Then they told the local police. Altered Reality 

llcr investments and 1-Vithdrc\v almost cv· Tile case \vas eventually fonvardcJ to the 

crything she had from saving:;. She bor- i FBI, and an agent began an investigation. 

rowed against a Ufc-insurance policy. She By the time Schnwcrs stopped her folly, 

the her crediH:ard num· she'd lost $297,000. 

her and personal identification number to ''\:i/hcn the FBI got involved, it was like 

provide more funds. She tried to get a loan the spell broke," Lisa says oflwr mother's 

on equipment from her t3.mJly's G4(hlcTe 

wheat and catt!e !~mn. The local bank, now 

suspecting that fraud \Vas afi:Jot, refused. 

HIT daughter, Usa, who llwd about 

hours away and visited hl'r morn frc· 

qucnt1y, n'ca!ls that hN mother was un· 

characteristically sccrcti\'c during th<n 

pcrlod. And Schmcets did something 

odd: She opened accounts all three 

banks in her town and began shuttling 

money among them. flcr children found 

out that the scammcrs had instructed 

Scllmeets to receive and deposit checks 

from other victims, and send the money 

to a third party. Without her realizing it, 

Schmeets was being used by the scam~ 

mcrs to launder money. 

A banker in I rarvey qucslioncd Schmccts 

about her large transaC'tions. "I don't remember \vhat the heck I told him," Schmcets says, "hut 1 didn't tell him the truth 

because I wasn't supposed to tell anybody." 

The banker alerted Scbmeets' son,Jeff, 

to his mother's strange behavior. Her 

children, who ·weren't named on their 

mother's account, immediately asked her 

sudckn awakening. "She was like, 'Oh my 

gosh.' And then she was rl'ally hard on 

herself. She'd really lost evNytlling." 

Experts say it's not unusual for some 

victims to get duped repeatedly, betrayed not just by clever scammcrs but 

also by their own cognitive decline or 

emotional need. Jolene T. of California 

watched helplessly as her f~1ther, a retired 

plumber, and mother, a retired nurse, 

draim:d their life savings of $200,000 

Jnd borrowed an additional $50,000 

Money Management and the Aging Brain 

Al1heimcr's diSCJSe 

language and reasonmg, 1m prove 

34 WATCH, COMMENT, SHARE & MORE at ConsumerReports.org 
92 


responding to multiple sw<oeostakes 

prize offers, including one for $2,5 million 

from "Globallntemationa! Sweepstakes." 

jolene consulted her father's doctor, hop~ 

he would declare father incom· 

petent i>O that she could take 

l1nances, but doctor didn't signs 

of cognitiq~ decline. Legally her father 

was able to carry on. 

"I'd be at the house, andhe'dgcta can,·· 

Jolene says. "They'd tell him to wire the 

money right away He'd nm out the door 

to send it, and I'd run aft('r him. I still 

so invested in it that 

he didn't want to believe it \vasa lie," she 

adck "It became a kind of addiction:' 

'"The victims 1 deal with \Vould not call 

strangers," says Deem, 

the FBI victim specialist. "To these people, friends." 

To get through to victims and encourage them to stop, tries to reveal 

the scams' contradictions, But even when 

the hustlers are unmasked, some lonely 

that they're 

and thu;;lost his life savings. 

ln 2006, when Deeb was 68, 

supplemental insurance. 

a list of 1ocal insurance agents and 

selected Cline to sell him the policy. Cline 

soon began courting Deeb, befriend· 

him and inviting him to a holiday 

He persuaded 

SECRETS, AND SCA:VIS 

Jane, to thelr forms, 

fl!ed the returns at all. Deeb owed the 

IRS $20,000, 

Around the same time, Dceb rece-ived a 

collections notice for cable tC'levision service he'd never ordered, Dcd1's daughter, 

I)eneC, and son, J.P., decided to investigate 

and found that Cline had used Deeb's So 

cial number to arrange for the 

service in his own home. Suspicious, they 

dug deeper. discovered that Cline 

had opened t1.vo more annuities. Over 

t!mc, he'd gutted aH three accounts, 

impersonating hls client to gradually 

\Vithdraw the funds by phone. To esc-ape 

detection, arranged for statements 

and checks to be sent to his or his father's 

home. The value of the annuities had 

dropped to zero. 

Deeb's children alerted police. ln No· 

vembcr 20l2, Cline \Vas arrested, and 

month later he was charged with schem· 

lng to defraud $SO,OOO or more, tlrst-

-r .. l~.rii ... , ... a Safaty 

Show on the Road Members of the Stop Senior Scams 

Cast member Bob Eddy, who almost 

WATCH, COMMENT, SHARE & MORE at ConsumMReports.org 35 
93 


The f<'ight for Justice In search of help, families report to lo" 

cal police, financial institutions, and 

numerous government agencies and 

not-for-profits (see "Where to Heport 

Abuse," on page 37). But investigations 

and prosecutions often fall short because 

of lack of training and coordination 

among vmious experts. 

Investigators may be able to determine 

the origin of a phone call or the original 

IP address of an Internet operation, but , 

by then the crooks have moved on. Pau! 

Greenwood, San Diego deput~y district 

attorney (Hid head of the office's Elder 

Abuse Unit, notes that although Gret>n 

Dot changed the loading process of its 

cards earlier this year to make it impossi· 

ble for scarnmcrs to redeem loaded funds 

remotely, criminals arc using other cards 

in their place. 

LIES, SECRETS, AND SCAMS 

And resources stretch only so far. 

·•The feds are more imerestcd in a global 

picture, \vith a criminal network, lots 

of defendants, and millions of dollars;' 

Greenwood says. "Ifl brought them Beth 

Baker's case, for S6S,OOO, they'd probably 

laugh at me." 

Yet dogged investigators can succeed. 

·while looking into some suspicious 

money transfers through the mall, Brian 

Horne, a postal inspector based in l'vfiami, 

and Frank Gasper, the FBI special agent 

in Bismarck, N.D., who \I,' as probing Edna 

Sdunects' case, discovcrctl thnt they 

were tracking the same person: Shan· 

non O'Connor of DeC'rtieid Beach, Fla., 

who large checks from 

Schmcets and at least three others. 

Horne and Gasper teamed up and even· 

tually paid O'Connor a visit. She was arrested and questioned. "Initially she told 

a couple of stories," Gasper recalls. ''But 

after a 40·minute interview. she realized 

we knew what was happening/' 

O'Connor cooperated, and the investigators pieced together the workings of a 

network of middlemen ln the U.S. collect· 

inp; huge sums of cash, much of it from 

seniors, and wiring or flying the funds to 

Jamaica. Working with.Jamaican law en· 

forcement, Horne and Gasper identified 

conspirators in the U.S. and jamaica. 

They estimated that the conspiracy had 

collectctl total of $5.5 million from at 

least 70 viet ims <~cross the country. 

Progress on Many f<'ronts As difficult as such probes can be, 

eldcr·ahuse experts say they've seen 

some progress in how the crime is 

perceived and handled. Last Septcm· 

her, for instant:e, the Department of 

Initiatives That Could Help Prevent Elder Fraud 

Recently, attorneys general in 

44 states and the District of Co-
94 

Æ 


N.C. There was an arrest warrant out for 

SHARE 

Have you, a friend, or a family 

member been the victim of an elder 

scam to steal money or property? 

Did you or the person you know fight 

back? Share the story with us on 

our Facebook page 

LIES, SECRETS, AND SCAMS 

him, and he was apprehended. One of his 

victims was Edna Schrncets. 

laundering, 

and 35 counts of wire Sentencing 

is scheduled for early October. He faces 

a potential40 years in prison, 

Greenwood says the Beth Baker invesher retirement, LIK•oocnmeet,;, st1e nmv 

has her children's names on her bank ac· 

"I don't feel like a hero," Baker says. 

"But I'm thankful ifl can keep somebody 

else from being fooled." 

Whereto 

Report Abuse 

against older people 

Consumer Financial Protection Bu~ 

reau's Office of Financial Protection 

for Older Americans (consumerfinance 

Financial Fraud Enforcement Task 

National Adult Protective Services 

by state. 

National Center on Elder Abuse 

Senate Special Committee on Aging 

toiHree hotline (855-303-9470) can refer victims and families to resources for 

assistance. Or go to aging.senate.gov/ 

fraud·hotline. 

For more resources, go to Consumer 

WATCH, COMMENT, SHARE&. MORE at ConsumerReports.ors 37