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25–878 PDF 2006

S. HRG. 109–316

OLD SCAMS-NEW VICTIMS: BREAKING THE CYCLE

OF VICTIMIZATION

HEARING

BEFORE THE

SPECIAL COMMITTEE ON AGING 

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

WASHINGTON, DC

JULY 27, 2005

Serial No. 109–13

Printed for the use of the Special Committee on Aging

(

SPECIAL COMMITTEE ON AGING 

GORDON SMITH, Oregon, Chairman 

RICHARD SHELBY, Alabama 

SUSAN COLLINS, Maine 

JAMES M. TALENT, Missouri 

ELIZABETH DOLE, North Carolina 

MEL MARTINEZ, Florida 

LARRY E. CRAIG, Idaho 

RICK SANTORUM, Pennsylvania 

CONRAD BURNS, Montana 

LAMAR ALEXANDER, Tennessee 

JIM DEMINT, South Carolina 

HERB KOHL, Wisconsin 

JAMES M. JEFFORDS, Vermont 

RUSSELL D. FEINGOLD, Wisconsin 

RON WYDEN, Oregon 

BLANCHE L. LINCOLN, Arkansas 

EVAN BAYH, Indiana 

THOMAS R. CARPER, Delaware 

BILL NELSON, Florida 

HILLARY RODHAM CLINTON, New York 

CATHERINE FINLEY, Staff Director 

JULIE COHEN, Ranking Member Staff Director 

(II) 

C O N T E N T S 

Page 

Opening Statement of Senator Gordon Smith ....................................................... 1

Opening Statement of Senator Herb Kohl ............................................................. 2

Opening Statement of Senator James Talant ....................................................... 3

PANEL OF WITNESSES

Lois Greisman, esq. associate director, Division of Planning and Information, 

Federal Trade Commission, Washington, DC .................................................... 4

Zane M. Hill, esq., acting assistant chief inspector, United States Postal 

Inspection Service, Washington, DC .................................................................. 19

Anthony R. Pratkanis, Ph.D., professor of Psychology, University of California 

at Santa Cruz, Santa Cruz, CA .......................................................................... 40

Denise C. Park, Ph.D., co-director, National Institute on Aging Roybal Center 

for Healthy Minds, University of Illinois, Urbana-Champaign, IL .................. 53

Helen Marks Dicks, esq., director, Elder Law Center Coalition of Wisconsin 

Aging Groups, Madison, WI ................................................................................ 71

Vicki Hersen, director of operations, Elders in Action, Portland, OR ................. 81

APPENDIX 

Written statement of Melodye Kleinman on behalf of WISE Senior Services .... 93

Written testimony from Stetson University, College of Law, Gulfport, FL ........ 97

(III) 

(1)

OLD SCAMS–NEW VICTIMS: BREAKING THE 

CYCLE OF VICTIMIZATION 

WEDNESDAY, JULY 27, 2005 

U.S. SENATE, SPECIAL COMMITTEE ON AGING, Washington, DC. 

The committee met, pursuant to notice, at 2:32 p.m., in room 

SD–106, Dirksen Senate Office Building, Hon. Gordon Smith 

(chairman of the committee) presiding. 

Present: Senators Smith, Talent, Kohl and Carper. 

OPENING STATEMENT OF SENATOR GORDON SMITH, 

CHAIRMAN 

The CHAIRMAN. Good afternoon, ladies and gentlemen, we welcome you all to this hearing of the Senate Special Committee on 

Aging. Today’s hearing is the first in a series that will examine 

consumer fraud and identity theft issues relating to older Americans. 

According to the Administration on Aging, nearly 40 percent of 

America’s seniors rank fear of fraud ahead of their concern for 

health care and the crisis attendant to it and even higher than terrorism. In all, the Nation loses $40 billion per year to telemarketing fraud and over $50 billion to identity theft. These crimes 

rob America’s seniors of their dignity and retirement security. 

As we will hear from the Federal Trade Commission, Internet 

auctions, prize and sweepstakes fraud and lottery scams top the 

list of fraud complaints received from Americans age 50 and older. 

What is most disturbing is that these scams routinely top the 

FTC’s annual list of top consumer frauds in the nation. It seems 

that even though we are aware of their use, scam artists remain 

successful in pitching old scams to new victims, perpetuating the 

cycle of victimization. 

Through today’s hearing I hope we will make progress in finding 

effective means to break this cycle. Fortunately, a number of Federal, state and community programs, especially groups in Oregon 

such as Elders in Action, have made a positive difference in helping 

seniors prevent and recover from fraud and identity theft crimes. 

However, I believe we can and should do more. Working with my 

colleagues, I have introduced bipartisan identity theft legislation 

that would, among other things, place restrictions on the solicitation of Social Security numbers, allow consumers to place a security freeze on their consumer credit reports, and require all entities 

that handle sensitive personal information to provide notice to affected consumers in the event of a security breach. 

2

I am also mindful that legislation and consumer education must 

work in tandem. As reflected in the consumer education research 

that will be presented to us today, one size may not necessarily fit 

all when it comes to consumer messaging. 

Throughout this Congress I will be inviting state and Federal 

law enforcement agencies, as well as independent consumer protection groups, to embark upon a collaborative approach to responsible 

and effective consumer education messaging. To further this goal, 

I welcome today’s distinguished panelists and again I thank you all 

for coming today. 

I will turn next to my colleague, Senator Kohl, for his comments 

and then to Senator Jim Talent of Missouri for his comments. 

OPENING STATEMENT OF SENATOR KOHL 

Senator KOHL. Thank you, Mr. Chairman, for holding this important hearing. We would like to welcome all of our witnesses here 

today as we examine ways to combat consumer fraud and identity 

theft as it impacts our nation’s seniors. 

It seems that seniors are being targeted more and more by con 

artists looking for a quick buck. Studies show that up to 5 million 

seniors fall prey to financial fraud every year. Just last week my 

Milwaukee office helped a 65-year-old man, who was a businessman all of his life, when he responded to an e-mail he received encouraging him to invest in a Nigerian business venture. The return 

was supposed to be outstanding. One hundred sixty-five thousand 

dollars later, this man is left with nothing but an empty retirement 

account and his wounded pride. Although the FBI was contacted, 

he was told that these scams are so common and so difficult to 

trace that they could not do anything to help him recover the 

money that he has lost. 

Seniors like this man become targets every day. They are trusting and come from a generation when business was often conducted 

on a handshake. Unscrupulous criminals are exploiting this trust 

and using it to their advantage. Preying on the elderly is certainly 

nothing new but in a day and age when many seniors are not technologically savvy, con artists have an easier time collecting personal information and using it to swindle a person out of their savings more than ever before. 

One way to stem the tide of consumer fraud is consumer education. We need to explain what seniors need to watch for and how 

not to be victimized. In my home State of Wisconsin we have been 

working to educate seniors on the pitfalls of financial exploitation. 

My office has developed a brochure that not only gives seniors an 

idea of what to watch out for in terms of identity theft, credit card 

scams, telemarketing schemes and fraudulent lotteries, but also 

lists where seniors can turn for help. 

I have also been working with the Wisconsin Coalition of Aging 

Groups, the banking industry, and law enforcement in Wisconsin, 

and recently received confirmation from Federal agencies that Wisconsin banks can report suspicious activities involving a senior’s account to law enforcement officials without violating Federal privacy 

statutes. This is good news for seniors and their families and we’ll 

continue to work with all of our partners to get the message out 

to seniors on how to avoid being victimized. 

3

As we examine this issue today, it is critical that we keep in 

mind that senior scams are nothing new. Just as con-men and 

-women have new high-tech ways of conducting fraud, we, too, 

must develop new ways of stopping these criminals. 

So I thank you once again, Mr. Chairman, for holding this hearing. We look forward to hearing from our witnesses, learning more 

about how we can put an end to schemes and scams targeting our 

seniors. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Kohl. 

Senator Talent. 

OPENING STATEMENT OF SENATOR TALENT 

Senator TALENT. Thank you, Mr. Chairman. I think this is a very 

important hearing and I am not surprised that our senior citizens 

rank fear of fraud so highly. They are a target because these con 

artists know that in many cases they have worked very hard and 

tried to save a little money and I think a lot of people have a sense 

that well, the only people who are victims are people who perhaps 

are naive or maybe do not have a lot of experience with the world, 

but that just is not true. I was just leafing through the statements 

and I know a lot of the witnesses are going to say that and we 

know that in our office. 

This is a very important hearing. I hope there is more we can 

do here in the Federal Government to try and help our seniors. I 

also want to echo what you said about the number of good state 

and local programs that are out there. We have several in Missouri. I want to mention in particular the O’Fallon, Missouri Police 

Department Senior Citizens Police Academy, which has been very 

effective because the seniors can come in and learn about these 

scams, and also what Clay County is doing with an elderly protection initiative for homeowners. 

So I am glad you are holding this hearing. I am very interested 

in what the witnesses have to say and what we can do productively 

to try to help fight this. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Talent. 

Our first panel will consist of Ms. Lois Greisman. She is the associate director of the Division of Planning and Information at the 

Federal Trade Commission. They will be releasing a first-of-itskind report compiling fraud and identity theft statistics on Americans age 50 and older. Ms. Greisman, I am pleased that you are 

here and we welcome you and look forward to your testimony. 

She will be followed by Mr. Zane M. Hill, acting assistant chief 

inspector at the United States Postal Inspection Service. He will be 

discussing the agency’s law enforcement efforts and premier a new 

consumer education video. Mr. Hill, we welcome you, as well, and 

we will hear first from Ms. Greisman and then you will be following her.

4

STATEMENT OF LOIS GREISMAN, ESQ. ASSOCIATE DIRECTOR, 

DIVISION OF PLANNING AND INFORMATION, FEDERAL 

TRADE COMMISSION, WASHINGTON, DC 

Ms. GREISMAN. Thank you very much, Mr. Chairman, Senator 

Kohl. The written testimony submitted represents the views of the 

Commission. My comments and any responses I have to your questions reflect my own views and do not necessarily reflect the views 

of the Commission or any individual commissioner. 

I am delighted to have the opportunity this afternoon to discuss 

the Commission’s efforts in fighting consumer fraud against older 

Americans. We have worked closely with your committee over the 

years to protect senior Americans and we welcome the opportunity 

to continue these critical initiatives. 

I am also very happy to appear on the same panel as assistant 

chief Inspector Zane Hill. The U.S. Postal Inspection Service has 

been an indispensable partner in the fight against identity theft 

and consumer fraud. Our close working relationship has proven 

both effective in prosecuting wrongdoers and efficient in protecting 

consumers. 

We all are sensitive to the fact that certain fraudsters may target 

older Americans and place them at higher risk than the population 

at large. In 2004 we received almost 650,000 fraud and identity 

theft complaints directly from consumers and from others. It is this 

rich source of information that we used to develop the extensive report we have provided to the committee, which analyzes the complaints received from consumers aged 50 and older. As you said, 

Mr. Chairman, this is a unique report that we have produced. 

The FTC uses the information in this report and all other complaint information in guiding its law enforcement and consumer 

and business outreach initiatives, and this vital complaint information is also made available through our consumer sentinel network 

to over 1,300 law enforcement agencies, which in turn use it to 

identify and prosecute crooks. The FTC’s report provides a tremendous amount of information about what older Americans tell us 

about being victimized. I want to emphasize a few points in that 

report about the fraud data. 

First, older Americans are not immune from any particular type 

of fraud. The most frequent complaints involve fraud about Internet auctions, sweepstakes and lotteries, Internet services and computers. We see these same complaint categories when we look at 

the entire population, but some things do stand out. For example, 

complaints about sweepstakes rank second for older Americans but 

rank fifth for the entire population and the FTC’s report shows 

that the number of sweepstakes complaints received increases significantly from consumers aged 70 and older, as does the total dollar loss reported by victims. 

The FTC has sued many companies for sweepstakes frauds, 

many of which have been based in Canada. Our goals always have 

been to close down illegal operators and if at all possible, get 

money back to the victims. 

Second, looking at the report it also was striking to see that 41 

percent of the fraud complaints from older Americans are Internetrelated. What that means to us as we define it, that means that 

the company initially contacted the consumer by the Internet, the 

5

consumer responded to a solicitation via the Internet, or the solicitation itself concerned an Internet product or service. The 41 percent figure itself should not be surprising but it is a significant increase from the 33 percent figure for consumers aged 50 and older 

that we saw looking at the 2002 data. 

At bottom, we analyzed all the complaint data in the report to 

help us maximize our law enforcement activities. Halting fraudulent conduct is a cornerstone of the FTC’s consumer protection mission in protecting older Americans, whether the cases involve alleged sweepstake scams, misrepresentations about a purportedly 

new Medicare program, or health claims about the benefits of a dietary supplement called ‘‘Senior Moment.’’

Law enforcement, however, is just one tool. We aggressively work 

to reduce fraud and identity theft through consumer and business 

education. We have developed a wealth of educational materials 

that alert consumers to signs of fraud and advise them about how 

to protect their sensitive information. Other educational materials 

inform businesses about how to safeguard personal information 

and how to assist customers who have been victimized. The FTC 

also partners with other agencies and organizations to reach a wide 

audience. The AARP is a key partner. Whose many publications 

frequently include articles about how to avoid and report fraud and 

identity theft. The AARP also has cobranded FTC publications and 

distributed them to its members. 

Further, the FTC looks forward to working with this committee 

to ensure that these materials reach senior Americans and all 

other consumers. I have provided the committee with a sample of 

these materials. It is in this large packet of information and I 

would be remiss not to note at the back is a ‘‘Do Not Call’’ fan, 

which is one of my favorite programs. 

All of these materials are available on our website, in both 

English and Spanish. We hope to continue conducting outreach programs and campaigns with your offices and with others to make 

the Commission’s consumer education materials and our on-line 

complaint forms available through your websites as we continue 

our efforts to protect older Americans. 

Thank you for the opportunity to describe the Commission’s activities. I will be happy to address any questions you may have. 

[The prepared statement of Ms. Greisman follows:]

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The CHAIRMAN. Thank you very much. 

Mr. Hill. 

STATEMENT OF ZANE M. HILL, ESQ., ACTING ASSISTANT 

CHIEF INSPECTOR, UNITED STATES POSTAL INSPECTION 

SERVICE, WASHINGTON, DC 

Mr. HILL. Thank you very much, Mr. Chairman, members of the 

committee. I want to first of all thank you for the opportunity to 

testify today about crimes against the elderly. The mission of the 

U.S. Postal Inspection Service is to protect the U.S. Postal Service 

as an agency, its employees, and the mails from criminal attack 

and criminal misuse. 

I think I want to show a video at this point in terms of our work 

with crimes against the elderly so you can see what we are trying 

to accomplish here. [Video shown.] 

Before I begin, I would like to acknowledge our Federal partner, 

the Federal Trade Commission, and the wonderful work that they 

have done with us in terms of training initiatives, education, legislation, enforcement actions. We have an excellent working relationship with them and I think we are actually doing some good to protect our seniors from fraud. 

There are countless illegal schemes that violate the Federal mail 

fraud statute, which is the very first consumer protection law enacted in 1872. It is still the most effective fraud enforcement weapon and postal inspectors have used it for over 100 years. 

Last year, for example, we responded to over 82,000 mail fraud 

complaints. Out of that we investigated over 3,000 fraud cases and 

arrested over 1,400 individuals for mail fraud. As a result of these 

investigations there was over $1.2 billion in court-ordered involuntary restitution and this was only a portion of the total financial 

impact these crimes had upon American citizens. 

Over the years postal inspectors have used the mail fraud statute 

to investigate and prosecute all types of scams. The advent of the 

telephone brought telemarketing scams and then the advent of the 

Internet brought Internet scams. Each of these bring their own offerings but really it is in many cases the same scam, just a different twist. Eventually the mails will become involved in the 

scheme and that is when postal inspectors will become involved in 

the investigation. 

Because older citizens, the physically challenged and shut-ins 

rely on the mail and these other forms of communication for many 

of their purchases and their personal business, they become easy 

prey for these fraud operators. The problem is further compounded 

by fraud operators who sell the names and addresses of their victims to other operators, resulting in repeated victimization of many 

elderly citizens. 

The same holds true for telemarketers. Most offers are legitimate 

but unscrupulous telemarketers can be the smoothest of operators 

and they can quickly defraud people out of their life savings. 

Losses attributed to telemarketing fraud are estimated to exceed 

$40 billion per year. Unfortunately, senior citizens are shown to be 

particularly vulnerable to these fraudulent solicitations. Fraudsters 

recognize this and they recognize that many seniors are widowed, 

alone, isolated from family and friends, and they take advantage 

20

of this. A telephone call from anyone to some of our senior citizens 

is welcome and our experience has shown that con artists know 

how to make the most of this. Once they have them on the telephone line, then they can manipulate them. 

In searches of fraudulent telemarketers’ places of business we 

have discovered the files of the operators that they have maintained on their victims. These files tell us a great deal about how 

these cons are worked. The information contains intimate details 

of the victim’s health, the names of their children, vacation and 

travel memories, and even information on deceased spouses. 

Telemarketers in particular use this information when they call 

their victims to give their sales pitch a personal touch, a hook if 

you will. They will mention family names, inquire about their 

health, and very effectively portray themselves as being caring and 

knowledgeable. 

For these victims, these telephone calls may be one of the few 

regular contacts they have with other people and the victims actually sometimes value this interaction with someone willing to talk 

with them. Victims often even defend the fraud operators in the 

continued belief that they are, in fact, their friends who are trying 

to help them win a sweepstakes and gain some money. 

Sadly, in our investigation some victims will acknowledge that 

they believed that the fraud operator was taking advantage of 

them but explain that they had no one else that they could talk to, 

and this is a sad commentary. 

One particular technique called the ‘‘You have won’’ scheme, targets elderly victims who have previously participated in lotteries, 

sweepstakes, and other prize-winning opportunities. Fraudsters inform these seniors that they have own; however, they are required 

to pay either administrative fees, taxes or membership fees before 

the prize check can be mailed. We know how this ends. The victim 

receives nothing; the scam artist receives the fee. 

Another tactic utilized by con artists is to tell a senior that they 

have won a large cash prize and then ask them for some identification by providing a credit card number, a bank account, or other 

personal information so that they can verify the senior as the winner. 

Armed with this personal financial information, fraudsters can 

quickly clean out the accounts of these unknowing senior victims. 

One of the most notorious scams that we have seen against seniors is what is known as the reload. It is a very offensive tactic that 

bothers all of us in this business. When fraud operators are successful in obtaining money from a victim, they often make an attempt to gain even more money. This is the reload. In a typical reload, the fraud operator contacts the victim again and alters the 

original scam or represents a new scam sweepstakes. Winners may 

be told that their prize has been increased but that additional fees 

are necessary to claim the new prize, and then starts the cycle of 

the reload. Victims in fraudulent investment schemes may be convinced to invest more money or to convert their investment to another market product which invariably is worth even less than 

what they initially had been sold before. 

Also, fraudulent telemarketers often network with other operators and sell or exchange target lists. The con artists refer to these 

21

lists as ‘‘mooch lists’’ or ‘‘sucker lists,’’ and you can tell from the 

name of the list what they think about them. 

If a telemarketer knows a particular senior has fallen for several 

scams, they will call this senior, pose as either an attorney or law 

enforcement officer and advise them that they have arrested the 

con artist from the earlier schemes and seized the money. This is 

the start of the scam. The victim’s money is described as being held 

either in a State fund or held by the courts. The scam artist will 

then request a fee to release those funds to the victim and in doing 

so steal from the victim again. As you can see from this, there are 

just multiple opportunities under a reload for the victims to be revictimized again and again. 

Many seniors have been robbed of their hard-earned life savings 

through illegal telemarketing and mail fraud schemes, but also 

there is a tremendous emotional cost that associates with this. The 

senior victims lose not only their money but also their self-respect 

and their dignity because they have been duped. We have interviewed victims in some of our cases who have claimed they could 

not remember sending anything to the operators or out of embarrassment would never acknowledge how much money they actually 

lost. Let me give you one example. 

An example of a recent Inspection Service case highlights an 86-

year-old widower and World War II veteran from Pennsylvania 

who was the victim of a sweepstakes fraud. Over the course of 2 

years, this senior lost his entire life savings to con artists who repeatedly promised him $850,000 in prize money provided he would 

pay in advance a series of customs fees, taxes, and legal fees in addition to his savings account. In reading the account of this, it was 

multiple reloads and multiple interactions by different groups that 

just continued to victimize him. 

It gets even worse. After he lost his life savings, the victim then 

used his Social Security income and sold his stock shares to cover 

the purported processing fees for the monies he had won. He never 

received any of the prize or any of the sweepstakes. 

Criminal prosecution is an important element in our fraud program, but it is not the only tool that we use. We also use civil fraud 

and our administrative authority to shut down the use of mails for 

those fraud operators that are using that as a vehicle to commit 

these crimes. The most important thing that we have seen in our 

good work with the FTC has been in the area of consumer education. We think this is probably where we need to place a lot of 

our work and attention to educate them. I want to tell you about 

some of those efforts and the success that we have had with them. 

In September 2003, our postal inspectors, in conjunction with the 

Postal Service, the FTC, and other Government agencies and private companies, unveiled a national consumer awareness program 

on identity theft known as Operation: Identity Crisis. This campaign focused on the ease with which identity theft occurs unless 

consumers take steps to prevent it. The video that you watched is 

one of those types of videos that we do as a part of these campaigns. 

Even though this crime affects all age groups, including older 

Americans, according to complaints that the FTC just spoke about, 

the percentage of seniors as a victim group rose from 17 to 21 perVerDate 0ct 09 2002 11:46 Mar 16, 2006 Jkt 000000 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 H:\DOCS\25878.TXT SAGING1 PsN: JOYCE
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cent, so we are actually seeing an increase in the numbers of senior 

victims to these types of frauds. The Inspection Service has recognized for many years that awareness in terms of consumer fraud 

is where our emphasis needs to be. We will continue to try to increase those efforts and to partner once again strongly with the 

FTC and other organizations to get that message out. 

Prevention efforts must focus on the key factors that play the 

greatest role in identity compromise. Unfortunately, the traditional 

way to steal personal information has not changed in terms of identity theft. Obtaining lost or stolen wallets, checkbooks, credit cards 

is still the favorite method, according to Congressional Quarterly 

Research. While this is a challenge, it really pales in comparison 

to the 52 million identities that have been compromised through 

electronic means since the beginning of this year. This is why prevention of the crime is a priority for the Inspection Service. 

You have all heard the saying ‘‘Crime doesn’t pay,’’ but in this 

case, it does in a very positive way for some of the victims. All of 

the campaigns that we have been involved with have been paid by 

a unique funding arrangement where we use monies received from 

criminal fines and forfeitures in cases where the victims could not 

be identified and the money could not be returned to them, just 

like the video that you saw. In addition, this money also pays for 

funding for public service announcements and other very proactive 

consumer campaigns that we are involved with. 

As you understand, the more that we can get the message out 

to that part of our population, the more we can tell them things 

to look for. They are very knowledgeable. They can identify some 

of these factors. We think that we will be very effective there if we 

can continue that very aggressive push in terms of the education. 

Another campaign that we actually did also in 2004 was to raise 

awareness about investment fraud and help consumers avoid becoming victims of those types of scams. This one, perhaps you remember, was called ‘‘Dialing for Dollars,’’ and it included a video 

portraying investment scheme that actually targets older Americans. 

This past February, in February 2005, we teamed up with the 

Postal Service consumer advocate and other Federal, State, and 

local consumer protection agencies, and launched a campaign to inform consumers how to avoid fraudulent work-at-home schemes. A 

multimedia approach conveyed the message with ads placed in 

newspapers and magazines reaching over 45 million readers. 

Last month, the Inspection Service and the Direct Marketing Association announced a nationwide consumer education initiative to 

educate Americans on how to avoid being scammed by the fraudulent sweepstakes like you just saw. In August, a foreign lottery 

campaign is planned to protect the public from those scams that 

take the money with the purchase of ‘‘tickets’’ and then charge a 

fee to collect the fictional winnings. 

Americans trust the Postal Service and the mail. Seniors have 

relied on this mail system their entire lives for their financial and 

their personal business. The Inspection Service is totally committed 

to continue its work of ensuring that the mails are secure and not 

used for criminal and fraudulent purposes. We will continue to be 

vigilant for those fraud schemes that target our senior citizens. 

23

In closing, Mr. Chairman, I would like to extend an invitation to 

you and the committee to join us in a National Fraud Prevention 

Campaign that we are planning to kick off during Consumer Protection Week in February 2006. This will focus specifically on educating senior citizens about the various fraud schemes that target 

their age group. 

That concludes my remarks. Thank you. 

[The prepared statement of Mr. Hill follows:]

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The CHAIRMAN. Thank you both so very much. 

Zane Hill, is this a public service video? Is it shown on the airwaves? Where is it shown if not on television? 

Mr. HILL. We have sent it to target groups, and we have used 

it with some video news releases, but we have not done a public 

service campaign with it, Senator. 

The CHAIRMAN. It is very good, and it seems to me that there are 

probably some television programs where a public service announcement like that would be very, very effective. 

Just a question and a comment as an observation. I have seen 

some of your educational materials. They seem to me excellent. Do 

you do any research testing their effectiveness? Do you have a 

sense are you reaching consumers? Is it getting through how they 

can protect themselves? 

Ms. GREISMAN. We do an enormous amount of internal testing 

before we disseminate any sort of consumer——

The CHAIRMAN. Do focus groups and——

Ms. GREISMAN. Probably not quite on that level, but we do have 

an Office of Consumer and Business Education, which is staffed 

with people who have enormous expertise on how to reach a broad 

range of consumers and also how to communicate information in a 

way that is most likely to be received. We certainly have done copy 

testing on occasion when we think it is warranted. 

The CHAIRMAN. Lois, I owe you an apology. I think I mispronounced your name. It is Greisman, right? 

Ms. GREISMAN. That is correct. No problem. 

The CHAIRMAN. I apologize for that. 

A question about restitution to victims. When you identify them 

and you get a conviction or apprehend someone, do you ever retrieve their money? 

Ms. GREISMAN. I will start. If at all possible, we do, and the best 

key to enable us to do that is to be able to seize assets at the outset 

when we are dealing with criminals, people engaged in fraud. We, 

of course, are a civil law enforcement agency. If we are able to obtain ex parte relief and freeze their assets before they hide it, send 

it abroad, or do whatever they will with it, we are most likely to 

be able to preserve assets and then provide it to consumers in the 

form of redress at the end of the day. 

The CHAIRMAN. You have enforcement powers, but you do not 

have police powers in the same sense as the Justice Department. 

Do you work with them, the FBI? 

Ms. GREISMAN. We work very closely with them, as we do with 

Postal Inspection Service, FBI——

The CHAIRMAN. Attorneys General in the States? 

Ms. GREISMAN. Attorneys General, U.S. Attorney’s Offices. We 

have found that partnering our civil enforcement with criminal enforcement is indispensable, and that is where we get the main deterrent effect. 

The CHAIRMAN. Are there any Sentencing Guidelines for elder 

crimes? 

Ms. GREISMAN. I would have to defer to my colleague on the 

criminal side. 

Mr. HILL. Yes, Senator. I know there are some in terms of vulnerable victims, in terms of the fraud guidelines that talk about 

34

where the scheme targets individuals, I think, over the age of 55 

or where you have multiple targets of a fraud scheme. 

The CHAIRMAN. These are Federal Sentencing Guidelines? 

Mr. HILL. Yes, sir. 

The CHAIRMAN. Lois, I think in your testimony you spoke of the 

schemes that come from across our borders—Canada, you did not 

mention Mexico. Are there some from that southern border as well? 

Ms. GREISMAN. Certainly we have seen cross-border fraud from 

many countries throughout the world. It is not limited to Mexico 

or to Canada. 

The CHAIRMAN. Say it is Mexico or Canada or anywhere else, 

what do other nations do in terms of coordinating with you and 

stopping it as it might emanate from their countries? Do they wait 

until their people are victimized, or do they work well with you, 

particularly our closest neighbors with whom we have the greatest 

commercial relationships? 

Ms. GREISMAN. We have an enormous history of collaborative efforts with our Canadian counterparts, and increasingly so with our 

Mexican counterparts. We have a lot of project initiatives in the 

pipeline with Canadian law enforcement, but it can be difficult, 

and part of what the FTC has sought in order to better enhance 

our ability to deal with cross-border fraud is the introduction and 

passage of the U.S. Safe Web Act. We think that would provide us 

with additional tools to effectively combat cross-border fraud. 

The CHAIRMAN. So as not to be blaming it on Canada, are there 

U.S. fraud schemes that victimize Canadians? 

Ms. GREISMAN. Absolutely. There is no question about it. In fact, 

we receive a lot of complaint data from what is called Canada’s 

Phone Busters, and most certainly those involve some Canadian 

citizens complaining against U.S. companies. 

The CHAIRMAN. You feel like the relationship between nations on 

these issues is seamless and effective? 

Ms. GREISMAN. Very much so. 

The CHAIRMAN. That is very good to hear. 

What about recidivism rates? Someone you find, apprehend, in 

some cases, I am sure, imprisoned, when they come out do you get 

a lot of repeat offenders? What do you find, Zane? 

Mr. HILL. Yes, Senator, we do. There are more scams than we 

can possibly count and these people are very creative. The old saying ‘‘There is a sucker born every minute,’’ then they take advantage of that, and they will just, you know, when prosecuted, when 

sentenced, then they will come out and they will look for other creative ways to dupe American citizens out of their money. 

To your other question about cross-border type work, unfortunately—the good thing about the information age and all these new 

means of communicating is this is really good. The bad thing is this 

type of fraud becomes very global, and these operators can set up 

in any number of countries, some of which we have not yet had the 

opportunity to create that good partnership relationship like we 

have in other countries where we have actually worked with them 

to combat this. So you have to go to where the schemes are originating and where the operators are residing. That is where you 

have to go to seize the assets to do all those things to shut them 

down. 

35

The CHAIRMAN. Is there any place particularly in the world that 

seems to have a concentration of it? Or is it just pervasive? 

Mr. HILL. Well, I think if you were to ask us that, I think probably parts of Eastern Europe. You know, we have seen an increase 

in the number of operators out of there, but, you know, the way 

telecommunications can be routed and switched and so on and so 

forth, sometimes even the place where you think they are might 

not be where they are actually working from. 

Ms. GREISMAN. If I may? 

The CHAIRMAN. Yes. 

Ms. GREISMAN. When a consumer complains to us, the consumer 

knows only what the company may have told him about where the 

compared is located. So, for example, a company can certainly say, 

yes, I am in the U.S. and there is a U.S. drop box, but it, in fact, 

maybe in Eastern Europe or in Canada or elsewhere. 

The CHAIRMAN. It is appalling, but I appreciate your forthcoming 

answers. 

Senator Kohl. 

Senator KOHL. Ms. Greisman, your report indicates a general upward trend in consumer fraud and identity theft complaints from 

consumers of 50 and over. Aside from an obvious increase in scams, 

is this also due to an increase in awareness and, therefore, reporting? Are seniors becoming more familiar about whom to turn to? 

Ms. GREISMAN. Yes, we think that is absolutely right. Each year 

that we have better enabled consumers to contact us, we have seen 

a substantial increase in the number of complaints, both on the 

fraud and identity theft side. 

Senator KOHL. So that the upside in numbers clearly does indicate a problem, but it is not apples and apples. It is that more people are familiar with what is happening and, therefore, are reporting what is happening. 

Ms. GREISMAN. That is correct. It does not tell you anything 

about the actual incidence of fraud or identity theft across the 

country, which is why we use surveys to get at that. 

Senator KOHL. All right. As I understand it, the complaints from 

consumers that you receive are all reported by victims themselves. 

We have seen that there is much stigma associated with being victimized and, therefore, many crimes go unreported. Is there a way 

to extrapolate from these numbers the actual number of seniors 

who are being defrauded? 

Ms. GREISMAN. I am afraid I do not think we can do that at this 

point. We would have to look at our fraud survey and techniques 

used in conducting that survey to see if you could determine the 

actual incidence impacting the elderly. 

Senator KOHL. Mr. Hill, in your testimony, you describe how 

raids of fraudulent telemarketers’ places of business turned up files 

containing very personal information about their victims, such as 

spouse and children’s names, their health conditions, and their 

travel histories. How is such information being distilled? 

Mr. HILL. Senator, you have people in the business of gathering 

personal information about American citizens, and this is what 

their job is, any number of open source public records they go to. 

They have very aggressive research groups that gather this information for them, and then they compile it in lists, basically cusVerDate 0ct 09 2002 11:46 Mar 16, 2006 Jkt 000000 PO 00000 Frm 00039 Fmt 6633 Sfmt 6633 H:\DOCS\25878.TXT SAGING1 PsN: JOYCE
36

tomer lists that they use. It is not a unique situation for the fraud 

operators. It is done in a lot of marketing strategies for consumer 

marketing campaigns. Unfortunately, the unscrupulous operators 

use those same types of lists to then victimize the seniors as a target audience that they know that they can go after and that they 

would be very susceptible to those types of scams. 

Senator KOHL. All right. I understand that the Postal Inspection 

Service has developed a series of consumer DVDs, education DVDs. 

How are these being disseminated to seniors? Do you have any 

feedback on how they are being received and what kind of impact 

these DVDs are having? 

Mr. HILL. To another question about a focus group, we have done 

focus groups with seniors on some of our DVDs, and they have 

been very positively received. They think it tells the right message 

in the right way so that seniors will understand what things to be 

aware of. We are going to do more of this with the other public 

awareness campaigns that we do to make sure that the message 

that we put together is, in fact, reaching the target audience with 

the things they need to do to protect themselves. 

Senator KOHL. Thank you. 

Mr. Chairman, thank you. 

The CHAIRMAN. Thank you, Senator Kohl. 

Senator Talent? 

Senator TALENT. Thank you, Mr. Chairman. 

Mr. Hill, I notice in your testimony on page 8, you present five 

questions people ought to ask themselves if they are contacted or 

they see something on the Internet. I was actually going to ask 

about that. I can remember on a number of occasions seeing public 

service announcements actually from the post office explaining 

what to do if people want you to send money up front or something. 

Are you making an effort to get out this information about key 

questions to ask regarding potential transactions or deals like this? 

Mr. HILL. Yes, Senator, we are. We are going to continue to really focus with these types of questions. As the scams change, then 

these questions will also change. But basically the one that you 

pointed out, when you have to give money up front to get something that you have won, that is just a red flag automatically. 

So these are the things that we will continue to do. As these 

scams continue to evolve, we will continue to pull out these key 

questions and build those into each of these public awareness campaigns that we are doing. 

Senator TALENT. This is very frightening to me, Mr. Chairman, 

because I can easily see a lot of people, not just seniors asked to 

confirm something and providing some financial information and 

then, bang, their whole savings are just gone. I hope we can come 

up with some way for really getting this word out in a way that 

people can understand. 

Thank you, Mr. Hill. Thank you, Mr. Chairman. 

The CHAIRMAN. I have a few questions on the second round, so 

if any of my colleagues have additional questions, we will go to 

them. 

Back to the question of public service announcements, to either 

FTC or Postal Inspection, do you have the authority to get these 

on the air or do you have the funding necessary to get these on the 

37

air? Because it does seem to me that that could be perhaps quite 

effective if we could get them more broadly distributed, these messages that may be produced in the form of 30-second television ads. 

Do you have funding or need authority that Congress can provide? 

Ms. GREISMAN. We do conduct an enormous number and different types of consumer educational campaigns. To the best of my 

knowledge, we have not done video news releases, which is not to 

say it is not something we would not think about. But we have 

reached, we think, an enormous audience through our print and 

online materials as well as through some radio I know we have 

done. In fact, in the near future we will be doing an enormous outreach campaign focusing on identity theft as part of the FACT Act 

amendments. 

The CHAIRMAN. I would sure encourage you to think about what 

you need from Congress to better broadcast the materials that I 

think are excellent that you have produced, because I think there 

is an education curve out there that could really put a dent in this 

that maybe we can more effectively disseminate. 

I want to ask you about methamphetamines, not that you have 

anything to do with it, but my State of Oregon—and I suspect it 

is true of other States increasingly, tragically—just has a plague of 

methamphetamines. In fact, in Washington County, OR, over 90 

percent of identity theft cases last year were connected to meth 

trafficking. The U.S. Attorney’s Office in Eugene, OR, says the statistics are similar for what they regard as routine ID theft cases 

such as shoulder surfing, dumpster diving, and mailbox theft. 

Can you both elaborate on what, if any, experience your respective agencies have with this component to elder abuse? 

Ms. GREISMAN. I am not aware of a specific component with respect to seniors. Certainly we are well aware and the law enforcement community is well aware of the link between identity theft 

and methamphetamines, and what we have seen is that either people who are addicted or people who are trafficking it are using 

identity theft as a quick way to get quick cash to fund the labs. 

Part of what we are doing in response to that is ensuring that as 

many complaints as possible get into the Consumer Sentinel Network because that is accessible to 1,300 law enforcement agencies 

throughout the U.S., Canada, and Australia, and we think that will 

enable them to connect dots to locate thieves in a way that they 

do not otherwise have available. 

Mr. HILL. Senator, from our perspective, in the last probably 8 

years or so, whenever you have seen that increase in meth usage 

and a meth problem in a community, you see these types of very 

low-level white-collar type crimes that are going on, the identity 

theft, trying to—purse snatching, vehicle break-ins to get purses or 

any type of personal information. You referenced other theft of 

mail. All of those things go hand in hand with that type of crime 

that the methamphetamine users seem to gravitate to. For them, 

it is not a very high-risk crime. It is something that they can do 

fairly anonymously if they can get the information. They do not 

have to confront someone. They do not have to brandish a weapon 

at them. They can do a great deal of damage to a community with 

those types of what we call probably low-tech white-collar crimes 

in terms of stealing that information. 

38

The CHAIRMAN. I am sure you are very much aware that Health 

and Human Services is in the process of implementing a Medicare 

Part D program, a prescription drug benefit for Medicare patients. 

Obviously, we are talking about people who are elderly. I suspect 

that as we speak there are many scams being developed trying to 

springboard off of Medicare Part D. Are my suspicions well founded? Are you starting to see prescription drug fraud schemes being 

developed? 

Ms. GREISMAN. Well, sir, over the years we have, unfortunately, 

seen no shortage of frauds involving various drugs, various dietary 

supplements, both in terms of the claims promised about what they 

can do for you, but also in terms of their availability. In fact, one 

of the settlements referred to in the Commission’s testimony involves a scheme in which people allegedly were selling a Medicare 

program. 

What we have done, because we are anticipating a possible surge 

in such types of fraud, is talk to our colleagues over at HHS to try 

to find the best way to ensure consumers who are defrauded or who 

think they are defrauded know where to file a complaint and can 

access information that will ensure that they can differentiate between, distinguish between what is fraudulent and what is real. 

The CHAIRMAN. I am glad to hear you are already working with 

HHS because I suspect that scenario, as we implement this prescription drug benefit, that there is going to be a world of new opportunities for people who would commit these frauds. 

Senator Kohl, do you have any additional questions? 

Senator KOHL. No. 

The CHAIRMAN. Senator Talent. 

Senator TALENT. No. 

The CHAIRMAN. We have just been joined by the Senator from 

Delaware. Do you have an opening statement or a question of these 

witnesses? 

Senator CARPER. Not an official statement, but just something I 

would like to say, and then a question, if I may. As I walked 

through the room, I heard part of my question being asked, so 

maybe the rest of it has been asked as well. 

In our State, Delaware, we had about 40, 45 different drug discount cards that people could apply for. It was very confusing. I 

was thinking about trying to explain things so that my mother, 

who just passed away, could have understood them and trying to 

couch them in those terms. It is hard enough for folks the age of 

my mother or my aunt and uncle to understand the benefit that 

is being offered to them, and it is all the more difficult when there 

are folks out there that are trying to defraud them. 

We saw a fair amount of that fraud not so much in Delaware 

during the last year or so with the drug discount card, but what 

lessons have we learned from the fraud that grew up around the 

drug discount card that might enable us to reduce the incidence of 

fraud with respect to the next step, the implementation of the Part 

D benefit? 

Mr. HILL. I will just speak from the U.S. Postal Inspection Service standpoint. I am not aware of us seeing a real increase in the 

numbers of investigations that we have done of that nature. I could 

be wrong, but I do not know if we have really looked at that to the 

39

level of concern that the committee has expressed, and we will do 

so to see what kind of numbers. But obviously you are right, Senator, anytime that someone is misrepresenting what service they 

can provide to those card users, then there is a strong possibility 

that they could be deprived of services needed. So that will be 

something that we will most certainly take a look at. 

Ms. GREISMAN. I will add just briefly, that the importance of education can never be underestimated, and I think the point you are 

making is critical, which is that it is important to communicate in 

a way that people understand what you are saying and can use 

that information. That is something we spent a lot of time and energy ensuring that we get right, and we are constantly re-evaluating it. The prescription drug world is certainly a challenge, but 

it is one that we think we can deal with, working with HHS. 

Senator CARPER. On the one hand, it is hard enough for folks the 

age of our parents and grandparents to figure out do I want to use 

this benefit, the Part D benefit. Do I want to use it? Do I know 

enough to understand it to make a right decision? Is the person 

that I am talking to on the phone someone who is there to help me 

or someone who is there to take my money and to defraud me? 

My mom used to live down in Florida just outside of Clearwater 

for a number of years, until my sister and I moved her up to Kentucky in the last years of her life. I remember the last few years 

my mom was there—my dad had passed away—my mom put a roof 

on their house that did not really need one. My mom built an extension to the house that I am sure was not really needed. She was 

living there by herself. I remember the time when my mom bought 

a vacuum cleaner, and she paid more for that vacuum cleaner than 

I paid for my first car or two that I bought. It is a good vacuum 

cleaner, but—and it should have been for what she paid for it, for 

as long as she paid for it. 

But, on the one hand, somebody tried to sell her once a long-term 

nursing home plan, and she bought it. My sister and I had no idea 

that someone had tried to sell her that kind of nursing home plan, 

but she bought it. When the time came for us to move her and all 

of her earthly goods from Florida up to Kentucky, my sister came 

across this long-term nursing home plan that my mom had bought 

for a relatively small amount of money and found out that it was 

worth 2 years of paying for her to stay in a private nursing home, 

and in that case—so we were not all that happy about the vacuum 

cleaner and the roof on the house and some other things, but we 

were glad that my mom had the good sense, the presence of mind 

to take out that long-term care plan, which did a lot of good for her 

and for us. 

Thanks very much. 

The CHAIRMAN. Thank you, Senator Carper. 

Lois and Zane, thank you both very much for your presence and 

testimony today and your public service. We are grateful to you 

and your agencies for what you are doing for America’s senior citizens. 

The CHAIRMAN. We will now call up our second panel that will 

consist of four individuals: Dr. Anthony Pratkanis, a professor of 

psychology at the University of California at Santa Cruz, serves as 

a member of the AARP multidisciplinary research team. 

40

He will be followed by Dr. Denise Park, who is the co-director of 

the National Institute on Aging Roybal Center for Healthy Minds 

at the University of Illinois, and she will be presenting the results 

of NIA-funded research illustrating the role of cognitive science in 

developing effective consumer education materials for older Americans. 

Then we will hear from Ms. Helen Marks Dicks, the director of 

the Elder Law Center, the Coalition of Wisconsin Aging Groups, 

and she will testify about the center’s work in educating and empowering seniors to recognize, report, and combat scams and other 

fraudulent practices. 

Also, we are very pleased to welcome from my home State of Oregon Ms. Vicki Hersen. She is the director of Operations at Elders 

in Action. Ms. Hersen will testify about Elders in Action community education program which provides seminars and ombudsman 

counseling on many topics, including senior scams, fraud, and identity theft. 

Dr. Pratkanis, go right ahead. 

STATEMENT OF ANTHONY R. PRATKANIS, PH.D., PROFESSOR 

OF PSYCHOLOGY, UNIVERSITY OF CALIFORNIA AT SANTA 

CRUZ, SANTA CRUZ, CA 

Mr. PRATKANIS. Chairman Smith, Ranking Member Kohl, and 

Senator Talent, every year Americans lose almost $100 billion in 

telemarketing, investment, and charity fraud. While this dollar figure is staggering, it does not capture the true costs of this crime. 

Fraud not only impoverishes victims financially, but it can also impoverish them emotionally and drive a wedge between victims and 

family members. Economic fraud crimes have societal consequences 

as well, resulting in a loss of trust that impacts the business community and erodes the very fabric of life in American society. 

But I want to report some good news in the right against economic fraud crimes. 

For the last 8 years, I have been a member of a team of researchers and fraud fighters consisting of myself, Doug Shadel, the state 

director of AARP in Washington State; Bridget Small, the director 

of Consumer Protection for AARP here in Washington, DC; and 

Melodye Kleinman, of WISE Senior Services, whose written testimony you received today. 

Our team has conducted surveys of victims, carried out experiments investigating the effectiveness of intervention strategies, developed educational materials, trained volunteers to fight this 

crime, and have warned over a quarter of a million potential victims personally about fraud crimes. As a result of our work, we 

have developed an understanding of the nature of the crime and 

some strategies for preventing it. I want to tell you four things that 

we have learned, and I want to discuss with you three opportunities or challenges that I think we will face in fighting this crime. 

First, we have learned that the weapon that is used in fraud 

crimes is social influence. No one knowingly gives their hardearned cash to a con criminal. They think they are making an investment, winning a prize, providing for a charity, or some similar 

positive goal. The con criminal is a master at using one high-powered influence tactic after another to sell a deception. Given that 

41

the weapon in a fraud crime is an invisible one—social influence 

as opposed to a gun or a knife—there is a tendency by both victims 

and observers not to recognize economic fraud crime for what it 

really is—a crime. 

Recently, Doug Shadel and I analyzed over 250 undercover tapes 

used in fraud investigations. In these taps, law enforcement took 

over a victim’s telephone line and then tape-recorded the con criminal’s pitch. In listening to these tapes, we found that con criminals 

would play different roles—authorities, friends, even dependents—

to create a platform of trust. They would then use many well-established social influence tactics to sell the crime. For the most part, 

these sales pitches are sweet and charming, although nonetheless 

deceptive and effective. However, at times it can also be abusive, 

frightening, and intimidating. 

Mr. Chairman, with your permission, I would like to play a portion of some of these tapes to illustrate the abusiveness that can 

occur in these crimes. 

The CHAIRMAN. Without objection. 

Mr. PRATKANIS. The first selection is a montage of fraud pitches 

taken from two different undercover tapes. First you will hear two 

cons, Victoria and Sean, who are working together for a company 

that they call WMT. The company claims to be offering credit card 

protection. In reality, they are attempting to get the victim—in this 

case, Helen, who is played by a seasoned investigator—to make 

what is known as a verification, to give her name and other personal information over the phone, which they will then record and 

then use subsequently to withdraw money from Helen’s account. 

In another scam, which you will also hear interspersed between 

these two, you will hear from Robert, who has told Ardelle, a real 

victim in this case that is being tape-recorded as part of a law enforcement investigation, that Ardelle has won a prize and needs to 

send money to claim her prize. Ardelle has been a repeat victim 

and now is out of money, and thus Robert is making one last attempt to steal whatever he can from her. [Taped played.] 

Mr. Chairman, with your permission, I would like to play a second portion of the section of our tapes that will give you an additional feel for the abuse. This time we will look at a little more detail about that WMT company. This was a call recorded in March 

2003, and again, WMT is trying to get a verification from the victim. They have told them they are credit card protection, but what 

they are really trying to do is get a verification where the victim 

reads their personal identification number over the phone, which 

they tape-record and then use to withdraw from their account. 

Senator TALENT. This is a law enforcement officer on the other 

end? 

Mr. PRATKANIS. Yes, Senator. The first one was a victim. [Pause.] 

The CHAIRMAN. Maybe they got away. 

Mr. PRATKANIS. It is in the written testimony as well, so we can 

move on if you would like. 

The CHAIRMAN. Why don’t we do that? We will put it in the written record. 

Mr. PRATKANIS. Thank you, Mr. Chairman. 

The CHAIRMAN. I understand Senator Talent had a question for 

you before he had to leave, and if you want to ask that, Senator? 

42

Senator TALENT. Actually, I just want to clarify about the tape, 

and I got the answer. 

The CHAIRMAN. OK. Thank you, Senator Talent. 

Go right ahead, Doctor. 

Mr. PRATKANIS. Mr. Chairman, a second thing that we have 

learned is just about anyone can fall prey to this crime. It impacts 

a large cross-section of our society, as Senator Talent said in his 

opening remarks. Con criminals go where the money is, and thus, 

older Americans with their nest eggs are a prime target for this 

crime. The stereotype of a frail or lonely victim does not stand up 

in our surveys of victims. While some victims are indeed lonely, 

others are quite active in their communities and can be leaders in 

their communities. 

Indeed, what we find is that con criminals profile their victims, 

as Mr. Hill said earlier, and they profile their psychological and 

other characteristics to find their Achilles’ heel. We all probably 

have one. They find that Achilles’ heel to construct the exact pitch 

that is likely to be most effective with each victim. 

For example, in one of our surveys, we found that victims of lottery fraud, a crime which emphasizes luck, believe that the world 

controls them, a psychological trait known as external locus of control; whereas, investment fraud victims—and this crime emphasizes a mastery of one’s fate—they believe that they control the 

world, or a trait known as internal locus of control. In other words, 

the con criminal was pitching the exact scam to take advantage of 

the person’s psychological characteristics. 

The third thing that we have learned is we have identified effective strategies for preventing this crime. In her written testimony, 

Melodye Kleinman described the reverse boiler room approach of 

WISE Senior Center. At WISE, senior volunteers contact potential 

victims with a warning message. The volunteers call potential victims whose names appear on criminal call or mooch lists that have 

been recently seized by the FBI. These can be quite active lists. It 

is not uncommon for us to call people and find out that they just 

sent in some money to a con criminal. 

Our volunteers then call and talk with these potential victims. 

They explain the nature of the crime, and then they help them develop their own strategies for preventing the crime. In a series of 

experiments, we tested the effectiveness of this intervention. We 

first had our volunteers call the victim with a prevention message, 

and then a few days later professional telemarketers attempted to 

take the victim in a simulated scam. We found that our interventions were effective in reducing victimization rates by about 50 percent. In other words, peer counseling is an effective tool in our fight 

against economic fraud crimes. 

Finally, as a result of our research and work with victims, we 

have identified components of a prevention message that are most 

effective. Successful prevention messages are ones that provide the 

potential victim with specific warnings about the crime and, most 

importantly, coping strategies for dealing with the crime that build 

a sense of self-efficacy, a feeling that ‘‘I can take charge of the situation and hang up’’ on the criminal. We encourage everyone to develop their plan for getting off the phone and have it ready to go 

when the need arises. On the other hand, our research has found 

43

that some messages that increase fear and create a defensiveness 

not only do not work but oftentimes boomerang, and in one study 

actually increased victimization rates slightly. 

Our research suggests three opportunities and challenges for 

those interested in preventing this crime. 

First, it is important to remember that economic fraud is a 

crime. There is a tendency to blame the victim in this crime and 

to believe that ‘‘there must be something about them’’ that led to 

victimization. Instead, our research shows the power of the fraud 

criminal’s weapon of influence. Victim blaming is harmful to victims and hinders law enforcement’s ability to obtain accurate and 

timely information about this crime. The victim of economic fraud 

should be included in any Victim’s Bill of Rights. Sentencing for 

economic fraud crime should match the magnitude of the crime and 

not the charm of the con. We need continuing Federal efforts in investigating and enforcing these laws. 

Second, we now have the tools, knowledge, and strategies which 

have been proven effective in preventing economic fraud. This information needs to be disseminated to fraud fighters everywhere. 

Doug Shadel, in collaboration with Washington State Attorney 

General McKenna, has trained over 2,500 volunteer fraud fighters 

since October 2003 who have in turn educate close to 100,000 people in their communities about fraud. This fall they will begin a series of peer counseling events to reach those whose names have 

been stolen by identity thieves. We need more of this sort of intervention. I would like to see the tools for effectively dealing with 

this crime in the hands of every victim’s advocate in local and State 

prosecutor’s offices, the efforts of Washington State duplicated in 

other areas, and the creation of regional centers to fight economic 

fraud patterned after the remarkably successful program at WISE 

Senior Center. 

Finally, we need research that focuses on the chronic victim, the 

50 percent or so of victims that we did not successfully reach in our 

call center research. Our research shows that the chronic, repeat 

victims find themselves in a rationalization trap of being confronted with two discrepant thoughts: ‘‘I am a good and capable 

person,’’ on the one hand, but yet, ‘‘I just sent my hard-earned 

money to a scammer.’’ In such a situation, it is difficult to admit 

that one has been taken in a fraud without damaging self-esteem, 

and thus defensiveness is common. We are currently investigating 

strategies for resolving this rationalization trap in the hopes of 

finding effective interventions for use with the chronic victim. 

Chairman Smith and Ranking Member Kohl, this concludes my 

testimony. I thank you for the opportunity to inform you about our 

research, and I thank you and each of the members of your committee for the leadership you are taking in fighting this crime. 

Thank you, sir. 

[The prepared statement of Mr. Pratkanis follows:]

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The CHAIRMAN. Thank you, Doctor. That was wonderful testimony, very helpful to learn from. 

Our next announced witness is Dr. Denise Park. Dr. Park? 

STATEMENT OF DENISE C. PARK, PH.D., CO–DIRECTOR, 

NATIONAL INSTITUTE ON AGING ROYBAL CENTER FOR 

HEALTHY MINDS, UNIVERSITY OF ILLINOIS, URBANA–CHAMPAIGN, IL 

Ms. PARK. Thank you. Good afternoon, Chairman Smith, Senator 

Kohl, and other members. My name is Denise Park. I am a cognitive neuroscientist and professor at the Beckman Institute, which 

is part of the University of Illinois in Urbana-Champaign. I direct 

the Roybal Center for Healthy Minds at the University of Illinois, 

a center funded by the National Institute on Aging that is designed 

to take the results of basic laboratory research on aging and determine how these results can be used to improve function in older 

adults in their everyday lives. I have been involved with the NIH 

by just completing a stint Chairing an NIH Review Panel recently, 

and I also just completed a term on the Board of Directors of the 

American Psychological Society. 

Thank you for inviting me today. My research for the past two 

decades has focused on the aging mind. Today, I would like to alert 

you to how changes in cognitive function with age make older 

adults particularly susceptible to being victimized by charlatans 

who exploit certain aspects of the aging cognitive system. 

How are we doing on the visual aids here? OK, great. 

Here is a figure based on data collected from my laboratory that 

has been published in scientific journals as well as USA Today and 

Newsweek. I call this figure the ‘‘Aging Mind’’ slide. It represents 

data collected on many different cognitive tests from adults aged 20 

to 90 who were selected from a group of exceptionally able and 

healthy older adults. What you will see in this figure is the focus 

of my first important take-away point. Basic lab research demonstrates very clearly that as we age, beginning in our 20’s, like 

many other systems in the body, our cognitive system shows signs 

of gradual deterioration. With age, we become slower at processing 

information; our memory becomes somewhat less effective; and our 

ability to take in a large quantity of information at one time and 

reason about it decreases. At the same time, these declines are not 

as important for function in everyday life as they might appear, because with age, as this figure shows, knowledge also increases, conferring a buffer against the impact of cognitive aging. Nevertheless, 

we do become increasingly ‘‘cognitively frail’’ with age, and this 

frailty has the greatest impact when we cannot rely on our knowledge or experience to help us out. So when older adults are unexpectedly faced with offers to buy things or have repairs done, they 

have less ability than younger adults to process all aspects of the 

message that they are receiving. This can result in them attending 

to the most attractive parts of the message or the simplest part of 

the message and agreeing to purchase things that they neither 

want nor need, or worse yet, signing contracts for which they never 

receive any services or contracts that they do not understand. 

A second take-away point that will give you further insight into 

why older adults are more easily exploited by consumer scams is 

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the following: There is conclusive evidence that older adults have 

a bias toward the processing of positive information. Studies conducted by Laura Carstensen and her colleagues at Stanford University suggest that with age, we learn to ignore negative information and direct more of our attention and limited cognitive resources toward positive information. This is generally good news, 

suggesting the resilience that characterizes so many of our elderly 

citizens. But at the same time, this tendency to process positive information at the expense of negative can make older adults particularly vulnerable to unscrupulous characters. 

Research in my lab conducted with Oscar Ybarra has demonstrated the following: We presented young and older adults with 

both positive and negative information about an individual and 

then tested their memory for the traits we used to describe the individuals. Older adults tended to recall more positive traits and 

less negative traits, whereas young adults were more balanced between positive and negative information. These results suggest 

that when older adults meet a charming charlatan, they are going 

to be biased toward processing the positive information about the 

individual—his niceness, attractiveness, and warm toward them—

and be less likely to note the inconsistency of his story or tendency 

to gloss over specifics, which would make him seem untrustworthy 

to a younger adult. This problem is exacerbated by the somewhat 

more limited cognitive abilities that occur with age that, again, result in increased vulnerability to exploitation. The types of effects 

I am describing will be particularly pronounced for our oldest citizens and for those with less experience, that is, less knowledge, 

with making financial decisions. So, for example, a new widow over 

age 75 might be particularly vulnerable to exploitation. 

The third point that I want to make is that with age, we tend 

to remember less explicit detail about events and more of the gist 

of what we hear. With age, individuals are particularly poor at remembering the details or context in which they learned something. 

So the point about gist memory will become particularly important 

when you consider my fourth point, and that is this: Information 

that feels familiar to an individual seems like it must be true. This 

is called the ‘‘illusion of truth effect.’’ Knowing that older adults remembered gist over detail, and that familiar information feels true, 

my colleagues Ian Skurnik, Norbert Schwarz, Carolyn Yoon, and I 

set up an experiment that was designed to demonstrate that information that individuals believe to be false at the time they learn 

it will later seem true. Here is what we did. 

We had older adults—aged 60 and over—and young adults—aged 

18 to 25—come into our lab, and we presented them with a series 

of statements about health and told them whether the statements 

were true or false. For example, they would see statements like 

‘‘Most cold medicines cause the eye’s pupils to dilate,’’ or ‘‘DHEA 

supplements can lead to liver damage, even when taken briefly.’’ 

Some of the statements they saw only once and some they saw 

three times. Thus, all participants studied some statements that 

they were told three times were false. Now, remember that older 

adults tend to remember gist but not the details of what they see 

or hear. Remember that familiar information seems true. So what 

did we predict? We predicted that people would be more familiar 

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with the statements that they heard three times were false than 

the statements that they heard one time were false. We also expected that older adults, because they forget details, would not remember whether the statements were true or false. 

So 3 days later, when we brought our participants back to our 

lab, what did we find? We showed people the statements they studied earlier as well as some new ones, and we asked people to judge 

whether the statements were true, false, or new. What we found 

was very surprising on the surface, but also exactly what we predicted. We found that old, but not young, adults were more likely 

to call a statement true that they had been told was false three 

times, compared to a statement they heard was false only once. So 

the more often participants had been told a medical statement was 

false, the more likely 3 days later they were to believe that this 

statement was true. Why is this? It is because the statements they 

heard were false multiple times felt familiar, and information that 

feels familiar seems true. So young adults did not show these effects because they could remember the explicit details about what 

they had studied. 

So these findings explain how pernicious the effects of false 

claims can be for older adults. An older adult might not believe 

that ‘‘shark cartilage cures arthritis’’ if they read it as a headline 

in a tabloid at the grocery store checkout. But later, when they encounter the shark cartilage in the store, they might remember that 

they heard somewhere that it was a cure for arthritis and decide 

to purchase it, not remembering that they disbelieved the information when they initially read it. These findings provide insight 

again into not only how older adults might be exploited, but also 

provide guidelines for providing warnings to older adults. When 

presenting information to older adults as a warning, it is very important to present information clearly and in a positive way—for 

example, ‘‘Do this,’’ rather than ‘‘Never do this’’—if we want older 

adults to accurately remember it. Here is an example of a way not 

to present information to older adults taken from an actual pamphlet about living trusts. 

Here is the claim: A living trust—this was taken from an actual 

pamphlet. A living trust will preserve your legacy to loved ones by 

helping you avoid probate costs and estate taxes. Then it goes on 

to say: But here is the truth. Most people do not need to worry 

about probate or estate taxes. Most living trusts are not designed 

to avoid estate taxes. There are many easier, cheaper ways to avoid 

probate than a living trust. 

Older adults, however, a few days later, if they read this, might 

only remember that they learned something about how living 

trusts are important for avoiding probate, and they think that they 

need one, even if they initially understood that living trusts are 

rarely needed to avoid probate. 

A better way to phrase this might be as follows: Living trusts are 

usually unnecessary and rarely save money for people. If you think 

a living trust is for you, get advice from an estate planning attorney. 

Presenting false claims about health or taxes to older adults and 

then explaining why they are wrong is a dangerous business for 

helping older adults avoid fraud. 

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What I would like to do now is to critique several public service 

ads intended to educate older Americans about consumer fraud 

from the point of view of a cognitive psychologist. I will be pointing 

out some features that make the materials more easily comprehended and remembered by older adults and also presenting 

some examples that have some significant problems that will limit 

their effectiveness. As we look at these ads, keep in mind that designing materials for older adults can be particularly difficult due 

to the range of cognitive ability present in this population. There 

are, of course, a majority of older adults who are functioning at an 

extraordinarily high level and will be quite insulted by materials 

that are so simple that they appear to talk down to them. At the 

same time, there is a significant proportion of very old adults who 

are cognitively compromised and who may also have a limited social network, and these may be most susceptible to fraud. It can 

be quite a challenge to design materials that speak to both groups. 

Nevertheless, I will try to show you some materials that succeed 

for both groups and others that are problematic in their design. 

First I will show you some examples of problems. The first example here is material about Alzheimer’s disease designed by a nonprofit Alzheimer’s support organization. This particular brochure illustrates the point I just made. Remember that I mentioned that 

older adults tend to remember the gist of what they read rather 

than details and that information that is believed to be false at the 

time they read it may feel true later on. So when this information 

is presented as a set of itemized myths, there is a good chance that 

the information will later be remembered as truth. For example, an 

older adult reads the statement, ‘‘MYTH: There Is No Hope for an 

Alzheimer’s Person.’’ At the time he or she reads it, they understand the statement is false. Days later, however, all the individual 

remembers is that he or she once read somewhere that there was 

no hope for people with Alzheimer’s, completely forgetting the context in which it was read. Had the information been presented in 

a straightforward and positive way—‘‘FACT: There are things that 

can be done to help people with Alzheimer’s’’—such a misunderstanding could have been avoided. 

The next example is a consumer fraud fact sheet published by 

the Federal Trade Commission that warns against ‘‘phishing’’ 

scams, a type of e-mail scam to which older adults, due to more 

limited experience with the Internet, may be especially vulnerable. 

The problem with this ad is that those individuals most likely to 

be taken in by a phishing scam are probably going to think it has 

something to do with the sale of seafood that does not exist. So the 

people who most need to read this article would be likely to pass 

it by when they encountered this brochure because they would not 

know what a phishing scam is and that it would have any importance to their everyday life. Perhaps a better headline would be, 

‘‘Have you been getting e-mail requests to update financial records 

or to help secure funds for someone in another country? It is a 

scam.’’ Then the next line might read, ‘‘How Not to Get Hooked by 

a Phishing Scam.’’

The next excerpt is from a pamphlet on Medicare/Medicaid fraud 

put out by the Department of HHS and the Administration on 

Aging, and it is another example of helpful information being preVerDate 0ct 09 2002 11:46 Mar 16, 2006 Jkt 000000 PO 00000 Frm 00060 Fmt 6633 Sfmt 6633 H:\DOCS\25878.TXT SAGING1 PsN: JOYCE
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sented in a difficult and inaccessible format. Here we see once 

again that the main title, ‘‘Be Informed, Be Aware, Be Involved,’’ 

does not convey any useful information about what this pamphlet 

is actually about. The section headings also give no sense of what 

the topic of the pamphlet is. It is only upon careful scrutiny that 

one is able to notice that it is about health care and Medicare 

fraud. Finally, in small print, it indicates that if one suspects that 

fraudulent charges have been made to Medicare on their bill, one 

should call the number on the back of the pamphlet. But actually 

there is no number provided. The title of this pamphlet might read 

instead, ‘‘Check Your Medical Bills. Be Alert to Medicare Overcharges and Medicare Fraud.’’ Ms. Park. The next advertisement 

developed by the Department of HHS, the American Hospital Association, and the AMA is a good example of a well-crafted message 

that is easily accessible to older adults at all levels of cognitive 

function. The text is simple and succinct. The title and headings 

are eye-catching and easy to understand. It is possible to gather 

the gist of the message simply by glancing at the bold text alone. 

However, anyone who is interested in more detail can chose to read 

the small print as well. 

The pictures, while adding to the overall attractiveness of the ad, 

also serve to reinforce the main points and make them more memorable and easier to process. 

The CHAIRMAN. As you have evaluated these, Dr. Park, how 

much of the Government’s information is good and how much is 

bad? 

Ms. PARK. That is an interesting question. Your Committee sent 

me 10 or 15 pamphlets of this sort, and I selected 6 without any 

difficulty to critique, and, you know, I would guess at least—this 

is a guess. Of the materials I was sent, I would guess 25 percent 

had serious problems. I didn’t have to look hard to find these examples, and there were many more in the materials that were sent 

to me. 

The CHAIRMAN. You mind if we give them your number? 

Ms. PARK. I might mind. No, I think that actually that’s my closing comment, and maybe I should get to that. 

Very quickly, this is another example of a good add. It is really 

clear what this ad is about. Stop calling me. How to remove your 

name from marketing lists. Then you can see that there is clear 

headers, and you can look at what your particular problem is and 

get more information on the second page of the web site. 

This is a web page. Here is another one that is really very good. 

Nice integration of visual and verbal information. If you just 

bought something online about a medical device, you would be sure 

to look at this and sure to know that this is about how to be 

warned. 

I like that they showed the FDA as a clear and credible source 

that was very visible on this ad, and it is also easy to figure out 

how to get more information from this ad. 

So to conclude, I hope you all remember the following: normal 

aging is accompanied by declines in cognitive function that result 

in older adults remembering gist rather than details. Never present 

older adults with false statements as examples, because, later on, 

they will feel true to the older adult. 

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Older adults have a bias to process positive information. This can 

lead to exploitation due to their tendency not to process negative 

information about shady characters. 

Finally, I would like to note that cognitive aging scientists can 

play an important role in designing effective and memorable materials for older adults that will help them be less vulnerable to 

fraud. The work I have presented today is only a small example of 

the help cognitive scientists can offer in designing effective materials for older adults to protect them against fraud, as well as to 

aid in designing materials that clarify information about taxes, 

forms, medical conditions, and Social Security. 

The research I presented today was supported by the National 

Institute on Aging, and is a good example of how basic laboratory 

research can result in important outcomes for understanding everyday behaviors. It has been an honor and a pleasure, Senator Smith 

and Senator Cole, to share with you the work conducted under the 

auspices of the NIA Roy Ball Center for Healthy Minds, and I 

would also like to thank your Committee staff for their support and 

the National Institute on Aging for the support of the research that 

contributed to this presentation. Thank you. 

[The prepared statement of Ms. Park follows:]

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The CHAIRMAN. Dr. Park, it has been enormously helpful and insightful the academic approach you have taken. A question if I 

may. 

How sophisticated do you think the scam artists are? Do they 

know what you know in terms of positive messages and how to tell 

negative things in ways that will ultimately seem truthful to them? 

Ms. PARK. I think that is a really good question. I think there 

are people who intuitively know how to defraud people and recognize that they need to present themselves as warm, charming—

how to deal with lonely elders—and also are very good at, based 

on a few cues in a conversation as to what this person needs and 

wants to hear. So there is, you know, I would guess a really sophisticated con artist is a natural psychologist. He is informal. They 

also learn over time with what works and what doesn’t work, and 

they will unconsciously learn things about what works that they 

can’t even verbalize, but they may implicitly recognize what will be 

effective. 

The CHAIRMAN. Well, certainly this hearing and this Committee 

will be pursuing your suggestions on improving the materials and 

their effectiveness so that they are not wasting time, but actually 

making a difference. So. 

Ms. PARK. OK. Thank you, Senator Smith. 

The CHAIRMAN. Thank you so very much. Helen Dicks is from 

Senator Kohl’s State of Wisconsin and, we are very thankful for 

your presence and invite your testimony now. 

STATEMENT OF HELEN MARKS DICKS, ESQ., DIRECTOR , 

ELDER LAW CENTER OF THE COALITION OF WISCONSIN 

AGING GROUPS, MADISON, WI 

Ms. DICKS. Thank you. Good afternoon, Chairman Smith, Ranking Member Kohl, and members of the Special Committee on 

Aging. I appreciate this opportunity to testify. 

The Elder Law Center observes three types of financial exploitation of older Americans. Most easily recognized are the traditional fraudulent practices where a third party defrauds the senior 

and obtains their assets and their identities. The abusers are 

strangers to the seniors. This is the type that we have talked about 

the most today, and the type that we identify mostly as a consumer 

protection issue. 

The second issue that we deal with is the occurrence of waste, 

abuse, and other fraud within Medicare and other public benefit 

programs. With the introduction of a new and complex Medicare 

Prescription Drug Program this fall, marketing to seniors will 

reach a new, intense level. 

The CWAG Elder Law Center anticipates that scam artists will 

use this development to exploit seniors and people with disabilities 

who receive Medicare. 

Previously, you had asked what happened around the drug cards 

introduced last year as a transition before this benefit started. We 

had a lot of experience in Wisconsin with people charging applicants who apply for a public benefit. We had people pretending to 

be a Medicare approved card company, getting people’s personal information, and then charging their credit cards to the tune of $299 

72

for a card that was not a Medicare approved card. There were several organized scams around the discount cards. 

We presume that the same level of sophistication and greed will 

come out in the Part D marketing this fall. 

The third type of exploitation is the most common, the most 

under reported, and actually the most appalling type of elder 

abuse. It is the financial abuse of seniors by family members and 

other trusted people. These people use legal documents, such as 

Powers of Attorney, to drain seniors of their lifetime savings and 

assets. Trusted family members and professional advisors use estate planning as a means of gaining access to savings accounts, 

real estate, and other personal possessions. 

Seniors are reluctant to report these crimes simply because they 

involve family members. Law enforcement is often reluctant to get 

involved because they see this as a family issue. 

To address these concerns, the Elder Law Center has been using 

a fourfold approach. 

We provide consumer education on identifying and preventing financial elder abuse, benefit fraud, and other forms of exploitation. 

This education includes our publications, which I have provided to 

each Senate office. 

Additional consumer materials were given in my testimony packet. 

Since we anticipate major fraud activity around the new Medicare Drug Benefit, we have a section on our Part D web site 

www.wismedrx.org specifically dealing with fraud and a separate email address to report fraud to us as people become aware of this 

type of activity. 

Two, we provide legal assistance and emergency representation 

for victims of elder financial exploitation. Most work in this area 

comes in to us through our financial exploitation helpline. Our oldest caller was 102. She asked for assistance in revoking a Power 

of Attorney that a family member had been misusing. 

The third way we work to eliminate abuse is to encourage the 

reporting, investigation, and prosecution of financial elder abuse, 

benefit fraud, and other exploitation through training for seniors, 

professionals, government employees, and community advocates. 

Our professional training includes working with bankers and 

lawyers. We have specific publications on both the civil litigation 

and criminal prosecution of elder abuse cases. We are currently 

working with our Attorney General’s office, training law enforcement personnel. 

In addition, our office hosts one of the Senior Medicare Patrol 

projects, working to train seniors to spot and report Medicare 

fraud. 

Fourth, we advocate for improvements in the law and additional 

public funding to support prevention and prosecution of elder financial exploitation. We have successfully lobbied for increased 

funding by the state to our counties for elder abuse investigations. 

The Wisconsin legislature is currently reviewing both our guardianship laws and our protective placement laws. 

Financial abuse of elders is now where domestic violence was 20 

years ago. No one wants to admit how extensive the problem is. 

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Unfortunately, elder financial abuse is a low priority among the 

general public, among law enforcement, and within our government. We need to change this. We need greater coordination between social service agencies and the law enforcement community. 

We need to create a dialog between those who have direct contact 

with vulnerable seniors and those who can take actions to protect 

them. 

We need to realize that this is not just a family matter. We need 

a major change in the public attitude toward the victimization of 

seniors. This will require the reintroduction and passage of the 

Elder Justice Act and funding to support increased coordination between the aging network, financial institutions, and law enforcement. 

In closing, I am proud of the work that the Coalition of Wisconsin Aging Group, its Elder Law Center, and the other elder justice advocates have done, but limited resources means limited results. 

We need to empower our local communities with financial and 

legal means to prevent and prosecute elder the financial exploitation. 

If we do not do so, there will only be more victims and more 

abusers. 

[The prepared statement of Ms. Dicks follows:]

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The CHAIRMAN. Thank you very, very much. 

Vicki Hersen is from my State of Oregon. Thank you, Vicki, for 

coming all this way, and we invite your testimony. 

STATEMENT OF VICKI HERSEN, DIRECTOR OF OPERATIONS, 

ELDERS IN ACTION, PORTLAND OR 

Ms. HERSEN. OK. Thank you. 

Good afternoon, Chairman Smith and Senator Kohl. I am Vicki 

Hersen, director of Operations for Elders in Action, and I am honored to be here today, and thank you for convening this hearing to 

address the critical issue of ‘‘Old Scams, New Victims: Breaking the 

Cycle of Victimization.’’ Elders in Action is a powerful voice for 

local seniors in the Greater Portland area. We have a 37-year history of tackling important issues of concern for seniors, and we believe quality of life should never depend on age. 

Our small staff relies on the time and talent that 200 volunteers 

provide in delivering key services, including our ombudsmen and 

community education program. 

The ombudsman philosophy embodies the neighbor-helpingneighbor approach. Our volunteers provide personal support, information, guidance, and advocacy to fill gaps in meeting the needs 

and solving problems for our growing senior population. 

For seniors who are alone, confused, or afraid, or have nowhere 

else to turn, our volunteers provide a lifeline. More than 2,400 elderly victims of crime in the Portland area have been helped by Elders in Action ombudsmen since this innovative program began in 

1998. 

Victims of Crime Act funds, through the Oregon Department of 

Justice, help support this vital service. This is for seniors who live 

independently in their own home and it is not to be confused with 

the—long-term care ombudsmen program, which is funded through 

Older Americans Act money. But this is for folks who live in their 

own home or apartment. 

We helped individuals such as Georgia, who was terrified when 

a friend of her sons moved in and began stealing from her and 

threatening her. With our help, Georgia filed a restraining order 

and was able to take the steps necessary to live in an abuse-free 

environment. 

Then there was May, who had hired a contractor for some maintenance on her home, and ended up being a victim of his fraud. 

Last year, we helped victims of scams and fraud recover over 

$90,000 in benefits owed and funds lost to crime. Our volunteers 

have the time and the heart to keep working with the seniors for 

a positive solution. 

When an urban renewal area became a hotbed for opportunists 

to buy houses from seniors, we were there to assist. One 82-yearold victim was targeted by a man with a high pressure sales pitch, 

convincing her to sell her house for $88,000. Later, she was confused about what had transpired, and she called our ombudsmen 

services, and after reviewing the paperwork and making phone 

calls on her behalf, we were able to reverse the below market 

agreement and we saved her from a $48,000 loss when she sold the 

house for $136,000 a few months later. 

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Our community education volunteers work to prevent local seniors from becoming victims in the first place by providing practical 

information and resources about senior scams, fraud, ID theft protection, home security and safety and predatory lending schemes. 

Last year, we provided 7,100 seniors with important consumer 

information at 94 community events. Such senior-to-senior prevention education is critical in helping seniors become more attentive 

to their surroundings. These include the many fraudulent schemes 

that are becoming rampant via mail, phone, door-to-door, and email. 

One of our volunteers says, you can be robbed by a gun or you 

can be robbed by the phone, and the phone is a lot easier. 

She provides practical tips to her peers on cutting down the 

paper, credit cards, and sensitive ID information that people carry 

with them. 

Elders in Action volunteers advise seniors to keep their antenna 

up for things that just don’t seem right. The old adage holds that 

if it sounds too good to be true, it probably is. 

Communication and prevention of isolation of seniors is crucial 

to breaking the cycle of victimization. We encourage seniors to call 

Elders in Action to see if mail that they may have received or an 

e-mail or a door-to-door offer or a phone offer is real. 

Our volunteers help file reports to our State Attorney General’s 

Financial Fraud and Consumer Protection Division, the Construction Contractors’ Board, the Oregon Division of Finance and Corporate Securities, and other consumer protection groups. 

Creating opportunities for seniors to get involved in their neighborhood or at their local senior centers is also a way to break barriers to isolation. 

We encourage seniors to talk with each other if they’re suspicious, or if they have been a victim of a crime so that their peers 

may be informed. 

In fact, one of our victims of identity theft, luckily knew not to 

give the person information, but someone had actually taken out a 

credit card in her name. She came to us and one of our volunteers 

assisted her in getting it cleared up. She is now one of our ombudsmen volunteers, so she shares in the community her experience to 

be alert and informed. 

A local senior service agency case manager has said that 25 percent of their elderly clients have been a victim of ID theft or scams. 

One key solution to ID theft is to install mail slots or locked mailboxes, to pick up new checks at your bank, and to only put your 

mailing address on checks with your first initial. 

Unfortunately, Medicare Part D prescription drug benefit that 

people have been mentioning about that takes effect in January 

creates new fodder for scammers and other opportunists. 

Already we’ve received calls from three types of schemes who are 

taking advantage of seniors’ uncertainty about the upcoming 

changes. One involved an insurance company using heavy handed 

sales by phone and not fully disclosing all information, not allowing 

the consumer to make an informed choice. A second came by mail 

and stated that the President has announced the guidelines for 

Medicare reform and went on making it sound like an official notice, then asking for phone, name, address, and birth dates of the 

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Medicare beneficiary and spouse. No company name or contact information was listed on the return postcard, and the return address was a post office box, which is also a red flag. 

The third involved a company calling a woman in an assisted living facility. They made it sound like they were an official Medicare 

company and offered her $20 to answer a questionnaire, which 

lasted an hour. In reality, they were fishing for confidential information. 

There’s a significant link to financial loss from robbery, ID theft, 

and health deterioration. Most of the victims we assist live on low, 

very fixed incomes, and a loss of a few hundred dollars can tear 

their world apart. The trauma of a stolen purse exacerbated an already existing health condition in one of the seniors we assisted, 

and she ended up in a nursing home as a consequence. 

The criminal was a repeat offender who stole the client’s ID, 

wrote checks, and cashed her tax refund. 

Please consider the following solutions: Provide help and assistance within the police and court system for aging awareness training, tracking of scams, and more investigations, and I really appreciate the elder friendly materials that you were sharing with us, 

because we use a lot of focus groups with our local media and with 

just different groups, because we have seniors who are willing to 

share their information, and the importance of large enough fonts, 

colors, certain colors that people find hard to see on web sites and 

things like that are in print. So that’s really great. 

Present senior-sensitive messages—TV spots, newspaper stories, 

and ads—about where to get help. Provide more significant funding 

for programs that educate seniors so they know how to avoid being 

victims of fraud, and provide funds for programs to train peer advocates for senior victims of crime. 

Thank you for the opportunity to share how Elders in Action 

works to prevent problems and solve difficult situations for seniors. 

Our elders deserve much more, given the contributions they have 

made to our society. Let us translate this into funds for those who 

really need it and create ways to gather the talent and wisdom 

that our elders can give to our community. Thank you. 

[The prepared statement of Ms. Hersen follows:]

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The CHAIRMAN. Thank you very much, all of you, and Vicki, if 

you could tell us what are the two or three biggest sorts of scams 

going on in Oregon right now? Is it Medicare Part D? 

Ms. HERSEN. Well that’s new, but like the identity theft and, as 

you know, meth is just so rampant in the West Coast. It’s really 

bad, and we found a lot of victims have sons or grandsons living 

with them and financially exploiting them, and so we’ve been working with them to get restraining orders, and work with adult protective services. So that’s really—identity theft——

The CHAIRMAN. Relatives with a pernicious motive living close 

by? 

Ms. HERSEN. Yeah. It was interesting, when Senator Carper 

mentioned three of the issues with regard to his mother are issues 

that we have all helped with—aggressive vacuum cleaner sales 

people. This is really hard, because sometimes the person may be 

selling a legitimate item, but it is their tactics, and we do have one 

volunteer who I love—she’s this particular vacuum maker’s kind of 

advocate or anti-advocate—because the people came at six o’clock 

in the evening and came to the woman’s house and were there for 

over an hour and she ended up buying a $1,300 vacuum, and she 

has wood floors. But really to get them out of her house. 

So we were able to reverse that, and everything. Then they made 

some really sly comments. She says, ‘‘Well, I can’t lift this upstairs 

where my carpets are,’’ and they said, ‘‘Oh, we will come over and 

help you every time you need to.’’ Just give us a call. 

So it is things like that. Also construction fraud and scams. That 

is why we really educate people not to respond to flyers or people 

coming buy and saying ‘‘Oh, I see your gutters need to be repaired 

or a roof.’’ wee advise people to call first and how to do that in a 

positive way. 

The CHAIRMAN. I think it is clear from the testimony we have 

heard from all of you that, you know, Oregon, Washington was 

mentioned; California certainly. There are some very excellent programs to help the elderly avoid these things that have a national 

focus on this. Are there other states that we should mention who 

have good programs or states where they really need to shore it 

up? 

Ms. PARK. I guess I think this is in some ways more of a national, from my point of view, the structuring of information and 

warnings to elders. It might be very useful—I have been thinking 

about how to solve this for the government, to set up a best practices standard and perhaps if some short-term requirement were 

made to have materials for seniors put out by Federal agencies reviewed. If that happened for a period of 6 months or a year after 

developed in conjunction with scientists, it might be the case that 

that would become part of the culture of developing materials for 

elders. 

The CHAIRMAN. If I asked you, Dr. Park, what is the best thing 

the Federal Government can do to help stem this, would that be 

your answer? 

Put up—you know, put together kind of a clearinghouse of best 

practices? 

Ms. PARK. From the point of view of the kind of thing that I do, 

yes. I think the other thing is to be really clear about how do you 

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effectively warn seniors. So I can—we can design the very best 

messages and the clearest, but the problem is they have to reach 

people. With the Internet, 200 television channels, radio, it is less 

clear how to get people to process messages. I was telling your 

staffer I was very impressed. Someone in town where I live felt 

that our president of the university was very unpopular to him, not 

to others. It was a lawyer, and he put a billboard in town criticizing this individual and ultimately resulted in this individual resigning and taking another job. 

I think everyone in town saw that billboard and those are cheap 

and effective, and when you think of when you were a little kid, 

Smokey the Bear, Only You Can Prevent Forest Fires. We all know 

that. I think getting some billboards. This is just. This is what I 

think. It’s not what I know, if you see the difference. I haven’t done 

research on this. But I think presenting a short message so that—

Afraid You’re Being Scammed or something like that a phone number or an Internet web site that people can check and having some 

kind of branding of this so that people know this is a national priority and there is a place to go if you just think there is any chance 

you might be defrauded so that they can get the information that 

they need. So one is to be effective. The other is to make sure you 

communicate. 

The CHAIRMAN. But it is truly an excellent suggestion. As we 

look to reauthorize the Older Americans Act, we ought to—Senator 

Kohl and I ought to work together on an amendment that will create this kind of best practices center and create this branding, and 

create these simple messages that can be of assistance to the 

States. 

Dr. Pratkanis, you spoke of the Wise Senior Center’s, telemarketing victim call centers. Is this the kind of thing we are talking about? 

Mr. PRATKANIS. Yes, there is a number of approaches to take depending on the level of victimization, and the call center is excellent for getting people who are at risk or who may be in the process 

of being victimized. For those, I don’t think the mass-marketed 

communications necessarily is the most impactful. They need somebody, such as Oregon, where there is an advocate in their camp. 

So the Wise Senior Center could serve as a model for that through 

its reverse boiler room where they’re contacting people who are vulnerable, on the mooch list right now, and they are also have services there to help folks when they have similar situations that Ms. 

Hersen described in her statement. 

But personally, I would like to see that duplicated as much as 

possible. 

The CHAIRMAN. Are other States doing it? I mean you mentioned 

Washington. 

Mr. PRATKANIS. I’m not aware of that, Senator. 

The CHAIRMAN. But Washington State is doing it? 

Mr. PRATKANIS. Washington State has a different set of programs. They don’t have the call center at Washington State. What 

they have is AARP does education for community leaders—people 

at nursing homes and so forth—that teach them about the crime 

and then they go out and teach other people in their State. 

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But it would be nice to have in different regions, different areas, 

these kinds of centers that could serve as a focus to disseminate 

information, to set up best practices, to continue to do the kinds of 

research that it needs to fight the next round of crime. 

The CHAIRMAN. Helen Dicks, do you have a comment? 

Ms. DICKS. I was going to say one of the things that we have 

done to try to reach the isolated elderly is we have recently produced a piece about financial exploitation that listed services for 

seniors and put them in home delivered meals. That was one way 

we thought of reaching people who were not coming into senior 

centers and didn’t have regular contact with other people. We included—I put this in our packet that we gave a card, one side is 

about financial exploitation; the other side is a more general piece 

about other services available to seniors. 

The CHAIRMAN. Senator Kohl. 

Senator KOHL. Thank you. Helen, you are so experienced in our 

State with respect to these issues—I mean there are so many 

things that we could list. What are one or two of the most important things that we need more of? Law enforcement? Do we need 

more resources? Do we need more publications? If you could manage to get accomplished two or three things that would reduce the 

level of victimization, what would they be? 

Ms. DICKS. I think the two biggest things that I would do is one 

education of professionals, that is, the law enforcement community, 

with the real emphasis that this is truly a crime. It is not a consumer protection, regulatory issue. This is not a question of a family matter. Elder abuse is being minimized. We really need to convince law enforcement and the general community that this is a serious crime and it has to be treated like a criminal matter. 

Then the other part, in order to change of the attitude of professionals, is we have to change the general public attitude. If we had 

good publicity coming out of criminal prosecutions, I think it would 

help scare off the abusers. I think we talk a lot, and I do a lot in 

terms of educating seniors so that they don’t become victims, but 

we also have to do something strong to limit the influence and the 

activity of the abusers. I don’t think we have enough emphasis in 

that particular area, and I don’t think the law enforcement community has enough resources to pursue this such a comment was 

made earlier. We need to provide seniors who are going to go 

through the criminal justice system as witnesses with some kind 

of support and background so that they aren’t traumatized again 

by the court system after being victimized by the crime. 

Senator KOHL. Those are good comments. 

Mr. Pratkanis, would you like to comment? 

Mr. PRATKANIS. No, I agree wholeheartedly with that. You know, 

victim advocates right in the court system. 

In addition, the other thing that I worry about is some of the FBI 

agents are switching some of their focus into the War on Terrorism, 

and that leaves some gaps at the Federal level in terms of investigation. I understand their priority. I have made a similar kind of 

switch in my research, but that doesn’t mean the gap doesn’t go 

away, and real success on this crime in terms of prosecution started in the late 1980’s, and with Operation Disconnect and a few 

other FBI operations. As agents get switched over to other areas, 

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there leads to be that gap, and it has to be Federal and international. 

Senator KOHL. Helen, I know you have developed many publications around the issue of victimization of our seniors. In your experience, what is the best way to get these publications into the 

hands of seniors? 

Ms. DICKS. Well, we kind of have a several-fold approach. One 

is that we go to every conference, every gathering of seniors every 

time we can get together with either seniors or their advocates and 

get the information out that way. We also do as much as we can 

through publicity within the aging network. We give a certain 

amount of our materials out without charge. Unfortunately, we 

can’t do a great deal of that because of financial restraints. 

The other thing that we do with our publications I don’t know 

what the professor would think of this—but our publications that 

are for seniors are very clearly distributed as senior publications, 

and we keep them at a very low cost. For professional publications, 

we make it more obvious that they are more dense. They are written differently. They encourage the professional community to start 

taking actions in this area. 

I also find that we get a good response when we use talk radio 

and radio broadcasts that are specifically focused on senior issues. 

Of course, in Wisconsin, since we are dealing with a very rural population, ‘‘Farm Hours’’ and other programs of that nature are also 

useful in getting out information and the weekly shoppers. 

Senator KOHL. That’s very good. Any other comments from members of the panel on issues? Yes. Dr. Park. 

Ms. PARK. I would just like to make one other small comment, 

Senator Kohl, and that is the—I think the Committee on Aging 

should also be concerned about an inadvertent kind of fraud and 

I hesitate to use the word fraud, but the presentation of materials, 

such as this Medicare Section D Plan, that people can’t understand, and they can’t understand the benefits that are available to 

them and how to secure them because the options are too many. 

They don’t—people can’t process that many choices, and they don’t 

have enough information to make good decisions. 

So I think when laws are passed for seniors that implicate things 

like their health care, again, there should be some sense that the 

options available to them can readily be processed and acted upon 

by the people these laws are intended to help. 

I think that is a major concern as things become more complex 

with these different plans. 

Senator KOHL. Thank you. 

Ms. HERSEN. Yeah. No, those are good comments. I agree. We 

have seen that as far as confusion, and we want to make sure people are informed and are able to make wise choices, but with the 

confusion, it makes it more difficult, and I agree. It is really important to educate law enforcement and the prosecution—in providing 

aging awareness training to them, so they do take these crimes seriously. I mean we have had examples—luckily, we have one—an 

elder crimes unit in the Portland Police, which we helped start 

back in the 1990’s, but some officers, it is just not up there, you 

know, and they don’t realize. One perfect example was a woman 

called us and she had put her car for sale. This is a perfect scam. 

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Someone can go through the newspaper. Look who’s selling cars. 

Her name was kind of an old fashioned name. If you heard her on 

the phone, you could tell that she was very elderly. The guy ended 

up coming or giving her a deposit of $50 and said can I test drive 

it? Well, he test drove, and, of course, stole her car. 

So when she reported it to the police, well, the first police officer didn’t take it seriously. Well, it is just too bad. Well, losing $750 

meant a lot for someone on a fixed income. That was probably a 

couple months of prescription drugs, food, fuel to heat her apartment. So someone from the Elder Crimes Response Team did start 

looking into this, but it is that attitude not realizing the importance of having investigators and reporting. This is probably going 

on in all of Oregon for people who are abusing meth, as an easy 

way to get money. They make these phone calls, and they play the 

lottery. They will call like 20 or 30 people and then find out, oh, 

this person wants to sell their car, and then steal it. 

So it does need to be taken seriously by both law enforcement, 

and any way we can help. We do have senior volunteers who provide aging awareness training and so actually today and yesterday 

our Portland Police was having a training involving citizens on better communication techniques. 

The CHAIRMAN. Thank you, Senator Kohl. To each of our witnesses, please accept our heartfelt thanks for your willingness to 

travel here, and to share your skills and your experience. You have 

added measurably to the Senate’s public record. You have given us 

many good ideas to work on at the Federal level. We are grateful 

to you. 

We also thank C–SPAN for covering this hearing, because, frankly, the more we get information out and heighten awareness, the 

more successful we will be in apprehending, prosecuting, fining, 

and jailing those who would prey on the elderly. 

We say to those who would do such a thing that if we don’t catch 

you, we trust there is a hot place in Hell for you. So each of you 

beware and all of you who have helped us today, we thank you, 

and we are adjourned. 

[Whereupon, at 4:31 p.m., the committee was adjourned.] 

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