ours found that only a minority of savers respond to incentives affecting the return on savings in a way that was roughly consistent with traditional economic theory. most individuals, about 85%, or what the researchers termed passive savers, who did not respond. so what is it that blunts the response of many households? probably one significant factor is that people are focused on other aspects of their lives. so they use simple rules of thumb to determine their savings rather than complex calculations. that's not necessarily irrational. we could probably do a show of hands in the room to demonstrate this fact. ..

individuals have to take active steps to research and maintain these accounts. the lack of financial literacy among some households is more worrisome because of a shift from defined benefit pensions to the conjuration pensions which has increased the need for personal financial responsibility. so between 1989 and 2013 the sheriff workers participating in the pension plans fell from 32%

to 13% while the sheriff participating in the defined contribution plans increased from 25% to 38%. okay. so given these findings, what can we do to help people make decisions that will serve them better in the longer run? the key step in the right direction is to make the savings easier or more automatic. for example, and again as the crowd probably knows a large body of research documents of employer-provided retirement savings programs with automatic enrollment or default contribution rates could raise the savings particularly for low-income households. the challenge is only about 60% outside of the military and federal government ^-caret and we have employers that offer a four o. one k. and similar retirement plans. the last time i talked i want to build on this point and describe for specific changes in the federal policy that would encourage the savings. first we should pass legislation consistent with the auto

proposal in the presidents budget to an sure that americans without access to the workplace retirement plan are automatically enrolled in the ira. under this proposal into proposal every employer with more than ten employees that did not offer a plan would be required to sign up for workers for an ira. workers would be allowed to opt out of the savings if they chose that many would save you appreciate having this opportunity without having to figure out the logistics themselves. second, we should provide support for those that enroll the workers in retirement plans. the presidents budget proposes a $3,000 tax credit for any employer with 100 or fewer employees that enroll their employees in the auto ira. in addition the budget proposed the start of credit for those that create the retirement plans that would receive a $4,500 tax credit and employers that offer a plan and add automatic enrollment would receive a

1,500-dollar tax credit. these would offset the administrative expenses employers would bear and provide incentives for more firms to enroll the workers into the retirement plans. third we should ensure part-time workers that have worked for their employers for sustained periods can contribute to the retirement plans. less than 40% of part-time workers currently have access to the plan in the workplace in part because they are allowed to exclude employees who work less than a thousand hours per year. the presidents budget proposes requiring employers to allow employees to work for them for at least 500 hours per year for three years to make the completions to the retirement plans. fourth, we should encourage broad participation in the plan program developed by treasury. it is as new, simple, safe, no feet retirement savings option designed for people without access to the retirement savings plan at work people can arrange

for competitions to be made automatically every payday into the accounts stay with them if they change jobs. it's backed by the treasury and has no risk of losing money. from tax perspective these accounts are roth iras so they are used used after tax dollars and therefore can be withdrawn without penalty, whenever one looked like you and interest accrued tax free until the withdrawal. this year treasury worked with a small diverse group of employers as part of the pilot phase to get feedback and ensure the user experience is a simple and straightforward as possible. we are looking forward to promoting my ira more broadly to learn about the program by visiting my ra .gov. i wonder if none of these policy options alone can entirely solve

the problem of inadequate savings by household. however in each can make a difference and it together, they can make a significant difference of the total amount of savings available for investments in this country. and a significant difference in the financial security of many households. thank you and i look forward to taking your questions. [applause] >> opening up to questions from the audience i will go to the first question. how does the promotion at the federal level interact with interests from the administration to promote state plans? >> that is a great question. at the state level i understand the last statistics i thought suggested that there's a handful

of states pursuing it concretely but if you added those to those considering also doing if you're getting like half really are taking this interest as a strong signal that the president's proposal to do the state levels or federal level is something that americans are very interested in and people would really value. the competitions that have arisen on the state plans is that there are some complications related to the rules. the administration is working on providing clear indications and they said that they will be issuing some verification by the end of this year. >> finally my other question to

that, wanting to ask everybody here and that is when we talk about the tax incentives are they making a complex system even more complex. so the complexity issue is a running theme and the complexity facing individual is a true barrier because the point of my ra is to prevent something that is simple and easy to use from the person's point of view it does add to and makes the system that we have to encourage savings bigger. but it's an unnecessary gold from the individual's point of view actually not moving things in a more complex directions.

>> nobody else is asking a question. thank you for your presentation, which is very good. the question is has the administration thought about a program for older retired people giving a tax credit to employers, for example to motivate them for more senior employees or retired people because the retirement crisis for the opportunities to people who are not capable of working. >> that's not something that's currently in our badge of proposal to be included in the last presidents budget.

we like to reduce barriers to the participation for all age groups but certainly we don't want to be pushing people into the labor force who don't want to be in the labor force. but certainly come after heard of the agenda is to create a workplace that is better suited to work life's balance including encouraging employers to take steps that would give older workers kind of the flexibility that they need to be able to be in the workforce if they want to do so. >> we have one more question in

the very back. >> i am diana from the national institute, i was just on the last panel. this is a question about one of the things as some people have been talking about the states moving ahead with the auto ira at the state level have heard some criticism that while you don't need the auto ira anymore because you have mira. >> thank you for asking that question. my ira is designed to be a starter savings account. succumb in fact observations are limited to think it is 5,000 or $6,000 a year into the total amount that can be pulled up in those accounts would be $15,000. you can roll them over once

you've built the savings habit. but one design feature was ensuring that we were filling a hole in complementing the existing system not in any way undermining the existing four o. one -- 401k system with best practice is working well. >> thank you very much, karen we appreciate you coming over. also. [applause]

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[inaudible conversations] you can watch all of this again on retirement savings and tax policy on the website at c-span.org on the issue of social security, social security disability insurance. honest changes were part of the debt agreement. the agreement and the debt ceiling agreement passed by the senate and the wee hours of this morning by 64 to 35. another issue that house and senate will deal with next week the highway bill. the house rules committee will

consider monday though 325 billion on transportation projects over the next six years clearing the way for the potential for vote on the measure next week. this would be a long-term measure. it calls for 261 billion on highways and $55 billion in transit. read more at the hill.com. the budget reports this morning the pentagon will be spending special operations forces to syria. questions coming up in about 15 minutes look for that over on the companion network c-span

next a hearing on what's being done in the public and private sectors to protect seniors from financial predators. the house commerce subcommittee held a hearing last week. >> the committee will now come to her not come to her and the chair recognizes himself for five minutes for the purpose of an opening statement. >> this morning, first let me welcome the witnesses. this morning we will receive an update on the consumer protection efforts in place to address the fraud risk for america's seniors. as of july, 2013, there are over

44 million americans who are older than 65. that's almost 15% of the population. the population 65 and older the united states protects to outnumber people younger than 18 for the first time in 2033, 18 years from now. the median income of households is over $35,000 per year in 71% reporting having a computer in their home. the median networks of seniors 65 and older is 25 times that of people under 35 years of age. the expanding population of older americans and the relative wealth compared to other great age groups increases the risk that someone will want to target them. new technologies are everywhere. each week a new smartphone or tablet is announced, new applications with new capabilities keep cropping up. keeping up with new technology can be a challenge and

particularly for seniors that are less familiar with technology or are retired and are not exposed to new technology in the first place. the risk of fraud cannot be underestimated in the issue of consumer reports they came forward to tell their stories about being defrauded. in some cases out of thousands of dollars, sometimes just in a matter of hours. this is all before the family or law enforcement could be notified or intervened. while fraud perpetrated by strangers against the elderly is not the only type of abuse against the elderly, it does represent 50% of the recorded cases. that is why the hearing today is so important. even where there is no silver bullet, it is critically important for the subcommittee to understand what government agencies, with the media, universities and with private groups are doing to end our seniors to protect themselves

from fraud and to help them recuperate losses if they are targeted. and we need to figure out how our interest that agencies can devote more resources to the problem. there are few more about conditions issues when it comes to fraud and consumer protection the chair recognizes the ranking member for five minutes for an opening statement please. >> thank you mr. chairman for holding this hearing on preventing fraud against seniors. i really appreciate the focus on this topic. i look forward to hearing from witnesses and i want to particularly thank a fellow chicago in, robert harris for being here he's a cook county public guardian leading the fight to protect the elderly against fraud and deception in my hometown. as a long-time consumer advocate and now the cochair of the task force on the seniors i'm

committed to ensure seniors benefit from strong consumer protections more now than ever asked to be hoping if you are beginning the process today to ensure that elderly americans are protected against fraudsters since 2000 the number of seniors has grown about 30% while the population overall increased 10% and more than one in four seniors who lives alone has difficulty with activities of dalia living or some cognitive impairment. according to the fbi, seniors generally have a higher net worth to be trusting and are less likely to report fraud. all of this makes the elderly prime targets. we have seen an uptick in the number of products and services that are targeted towards the elderly including antiaging

products, health related products, prized promotions and reverse mortgages to read i am incredibly concerned about the risks posed by those products and services. not necessarily that all of them are fraudulent, the company to be careful. i want to know what the trends the witnesses are seeing here in the policy and public engagement perceptions for combating fraud and learn how we can help in protecting the elderly. i would also like to say that if this congress is truly committed to ruling out a senior fraud we should start by providing adequate funding to the cfp b.. the consumer financial protection bureau, the federal trade commission and other agencies for stopping fraud should not come at the cost overseeing financial services

industries appropriately monitoring the corporate security and private policy policies. however the budget would eliminate mandatory funding for the consumer financial protection bureau and cuts funding for the ftc more than 3% from the previous year. with those entities responsible for protecting more seniors from more threats each year it's hard to see how those proposals are anything but anti-senior. it is the beginning of the processor will yield benefits to senior citizens were the senior population and the families deserve no less. again i think the witnesses for a hearing today. >> the gentle lady yields back.

if there are other members on the republican side is the comment for an opening statement will include members opening statement that there may be additional members on the other side of that may yet arrive at the committee and we would like to give them time because we do know that there is another subcommittee hearing going on this morning. pursuant to the committee rules all members and opening statements are made part of the record to be respective of everyone's time the chair is

pleased to recognize the ranking member for five minutes for the purpose of an opening statement. >> you shouldn't wait for me mr. chairman. >> i want to thank you and the ranking member for holding the hearing on a hearing on ways to protect seniors from fraud. as we have seen far too often fraud affects consumers of all ages and the perpetrators of the scams remain adept at avoiding the consequences of the criminal acts. seniors however our fast-growing segment of the population and the threat of their financial security can mean billions of dollars in stolen assets if we let them fall prey to scammers. today they're living longer active lives in the present to become possessed greater wealth than seniors and these are obviously encouraging trends that also represent opportunities for abuse to occur. seniors are inundated with advertisements that promote fraudulent work from arrangements, computer repair,

anti-aging products and many others. they are also targeted disproportionately for certain scams like those involving the promotions, health related products and services and reverse mortgages. in addition it means active on the internet where a significant number of scams originate according to the ftc. moreover, certain types of of grass and such is constantly being bombarded with telemarketing scams and feeling the need to stop answering the phone can lead to feelings of isolation for seniors. most troubling, it arrives in the abuse particularly financial in nature committed by those closest to seniors including family friends, caregivers or other trusted advisors. seniors are victimized or offered into the report crimes from law-enforcement year out of embarrassment or fear of retribution from their abuser. others may be aware of the crime committed against them. a number of federal agencies stand ready to assist the services and combating fraud against the ftc at the consumer financial protection bureau that played a key role in protecting

protecting data and educating consumers and taking the enforcement actions against the perpetrators of the financial exploitation. and as is often the case much of the day-to-day fighting against fraud is occurring at the state and local levels and i look forward to hearing from the witnesses today about what is working and where we can improve response to fraud against seniors. seniors work so hard to build over the course of their lives are at stake and some have seen the nest eggs wiped away never to return. we need to ensure that all levels of government are doing what they can and have the tools they need to prevent the devastating scenario. the oldest to our seniors. i just want to say that when i graduated from law school from a couple of years i worked for an agency in the new jersey protective services for the elderly and when i was in the state legislature, we actually put together a bill that governor kane who is a republican signed that basically set up a program protecting the

elderly from fraud and abuse, so i am particularly -- i haven't been involved directly since then but it's always something that i worry a great deal about it i was involved in on a day-to-day basis. so, thank you mr. chairman. >> the chair thanks the gentleman. now, we'll turn to the witnesses. we do want to thank them for being here with us this morning and taking the time to testify before the subcommittee. today's hearing will consist of two panels each panel of witnesses will have an opportunity to get an opening statement followed by a round of questions from members. once we conclude with questions of the first panel, we will take a brief recess to set up for the second panel. the first panel for today's hearing includes mr. daniel kaufman deputy director of the bureau of consumer protection at the federal trade commission. mrs. stacey cannon deputy director of the office of financial protection for older

americans at the consumer financial protection bureau and mr. robert harris of the guardian of cook county illinois we appreciate all of you being here today, and we will begin the panel with you. you are recognized for five minutes for an opening statement. >> this morning doctor burgess. i'm deputy director of the bureau of consumer protection at the federal trade commission. i'm delighted to appear for you to provide an overview of the fraud threat to americans and the actions to address them. combating fraud is a critical component of the ftc consumer protection mission and virtually every law-enforcement case of the brain affects older americans. we have adopted a multifaceted approach in our battle against fraud that targets older consumers or injures them more than others and that includes aggressive law enforcement policy initiatives and consumer

education and outreach. to address such fraud is actively under the ftc monitors fraud trends by examining the data gathered from consumer complaints and surveys and collaborating with others with the law enforcement industry, academia and active services. through our extensive law-enforcement experience and efforts to track the fraudulent trends we've identified practices affecting seniors and several discrete areas and the consumer complaint data shows that for 2015, or americans complain primarily about the government and business impostor scammed, telemarketing, technical support scams and sweepstakes and lottery scams. while the consumer survey shows that older americans are not necessarily more likely to be defrauded than younger consumers, the ftc has nevertheless focused on scams involving seniors are example in recent years we've concentrated the law-enforcement efforts on technical support and healthcare related scams.

fraudsters claim affiliation with well-known businesses or governmental agencies to build trust with consumers and often used calls and caller ids to reach as many people as possible. in the last year the ftc filed three cases against defendants engaged in technical support scams where con artists trick consumers into purchasing technical support services and products purportedly to fix problems on their computers to be in fact, the computer problems are nonexistent and the defendants have caused millions of dollars in injury to other consumers. the ftc actions are crucial in these practices. similarly, they filed multiple cases against fraudsters that have viewed it deceptive practices to sell healthcare related products and services to older americans. such as medical alert systems, pharmaceutical benefits and information regarding the medicare benefits. in all of these cases, the fraudsters pretended and

affiliation with the consumer's friend or family member over the well-known recommendation in order to gain consumers trust. they are making the calls and selling healthcare related products or debiting regarding bank accounts and to have recovered money for consumers. we have also sued because a money transfer services that are commonly used in the scams that target older americans. and in the coordination with state, federal and international partners is the strongest ever. they've been prosecuted criminally. finally, consumer education and outreach are indispensable. in 2014, we have launched an innovative and successful education effort called pass on that is aimed at older consumers. pass it on our seniors with important information regarding topics such as impostor in health-care scams, charity

fraud, and identity that they can pass on to family and friends who might need it. the ftc has an ongoing sustained commitment to protecting older americans by pursuing robust law-enforcement and important policy work and innovative consumer education and outreach. i look forward to any questions that you might have. >> the chair thanks the gentleman. you are recognized for five minutes for an opening statement, please. >> would you please check to see if your microphone is on the backs of >> can you hear me? great. thank you. thank you, chairman, ranking member schakowsky and distinguish numbers of the subcommittee for this opportunity. to speak with you today that the devastating problem of elder financial expectations. my name is stacey and i am the deputy assistant director in the office director in the office for older americans that the consumer financial protection bureau. our office is dedicated to providing older consumers with the tools they need to protect

themselves from financial abuse and to make sound financial decisions. the evidence is clear. older americans have assets that make them attractive targets of fraudsters. in 2011 b. cumulative net worth of the consumers of 65 and older was approximately $17.2 trillion. older adults are victimized by a range of perpetrators including scam artists, family members, caregivers, financial advisors, home repair contractors and even court appointed guardians. the national study found that an estimated 5.2% of americans 60 and older are exploited by a family member. other studies show that most incidents of financial abuse go unreported and under the radar. to address the challenges we recognize the collaboration is critical among other things the

bureau participates with the federal agencies and elder justice gordon and counsel. for example many of the initiatives support council recommendations through this year. he issued a consumer advisory on planning for diminished capacity and illness. i would like to tell you about a few of our initiatives to combat older financial expectations. it's about different types of fraud scams in expectation and provides warning signs and tips

used by the broad range of intermediaries including state and local governments could do because financial institutions in october 2013 we released the managing money guides. many older americans experience the declining capacity to handle finances which make them very vulnerable to fraudsters. 22% of americans over age 70. even they can reduce older person's ability to detect fraud or scams by necessitating the need for the surrogates to handle their money. they explain explained the fiduciary is responsibility and how to spot the scams and exploitations. in 2013 the sea of pdfs of another federal agencies.

the guidance encourages the time i reported to the law-enforcement, adult protective services and other federal and state local agencies. they have additional resources that help protect older americans against fraud. it's an interactive online tool that helps consumers find clear unbiased answers to their financial questions. they have 8 million visitors since march, 2012. we also accept consumer complaints by phone, mail, fax and through the website. as of september 30, 2015, the bureau handled over 26,000 complaints of which approximately 63,000 were submitted on behalf of a consumer 62 years older. the congressional leadership and support is critical of implementing the multifaceted solution to this serious problem

of the serious problem of the older financial expectation. we therefore command it could command the subcommittee for holding the hearing and look forward to working with the interested stakeholders. thank you very much. >> mr. harris you are recognized for an opening statement please. >> good morning chairman of the committee, ranking member, congresswoman schakowsky and members of the commerce manufacturing and trade subcommittee. my name is robert hare as in i am a lawyer and i am the cook county public guardian in chicago. i was appointed by the chief judge of the circuit court to act as the guardian for people with old timers and dementia. i'm here today i am here today to discuss the issue confronting hundreds of people under my guardianship to have severe forms of dementia and alzheimer's and have been financially exploited. my office was approximately 600 people right now. as the guardian of last resort

for people without family or others to care for them. the average age is 72 and the oldest is 103 and around 70 of them are over 90-years-old. our goal is to maintain them in their own homes or in a community setting in for approximately one third of those people, we are able to do so with the assets. at this point many of them have bought homes, saved money for their golden years. unfortunately, there are people who view them as potential victims. and the problem is so widespread that at least a third of the intake cases have some form of financial exploitation. it doesn't matter if they have large estates worth over a million dollars or they simply have a house that is worth $25,000. another unfortunate fact is the exploiters can be anyone. family numbers of agents acting under the power of attorney, bank tellers, attorneys, clergy, caregivers, longtime friends.

we've had cases involving police officers and strangers and others who have left the pool or obtained the position of trust for the elderly victims. to combat and recover assets stolen from the people we serve, we do several things. we work with law enforcement, adult protective services to use and fraud protection department of financial institutions. we work with the media and shed light on the problem within the public and into the speak at various community organizations to educate constituents about the problem. one of our strongest tools we use as a development of the financial recovery unit of the call fru file citation actions pursuant to the probate act and other causes of actions for stolen, converted, and and those old were concealed assets. over the past ten years that we

have worked on this particular issue, the unit has recovered almost $50 million in money, houses, and other properties for the people under my guardianship. to be able to use for their care to maintain them in the community. >> the types of scams that we see include executing fraudulent deeds, unduly influencing the elderly individuals who sign over their properties or using a power of attorney to empty their bank accounts. the almost $50 million that we have covered for people under my guardianship is just to put the iceberg. and i'm sure that it is only a tiny fraction of the money that individuals have been exploited in and around chicago. some of our suggested solutions are to help local governments establish offices such as mine or legal clinics to establish practices that help people who've been exploited whether they come into the court system or simply need help.

resources might be available to them to utilize the organizations like the national guardianship association to play an important role by promoting the standard of best practices for guardians and the probate courts by providing education and training and provide advocacy on the issue and the impact of seniors including the impact of elder abuse and financial exploitation. all of the four systems and processes that don't work against seniors and insisted the urgency of time for the elderly. such is the probate and the older law and miscellaneous remedies worked in chicago. because many simply try to wait out the lifespan of those victims.

you have the written material premised in large part by the article that the deputy guardian wrote and i'd be happy to share our experiences with the individual cases. the chair thanks the gentleman. thanks for all of the witnesses for your testimony. we will move into the question portion of the hearing and the democrats think i recognize in myself for five minutes. i just have to ask you, i learned so much in this subcommittee the fraudulent deed, what happens with that if someone comes comes door to door and says i will sell you some property or -- >> what they do sometimes is a quick claim from the elderly person they force those beads like throwing the names in order a third-party and then they record against the property. and sometimes those elderly people never know about the

crime and then one day someone shows us that -- >> someone has purchased the home. >> they have not purchased the home they just developed the deed and recorded the property. >> and you are able to intervene on behalf of that person? >> the present of a vice versa all they have to have a cognitive impairment that is severe enough to qualify for the services. we would follow a citation act to recover the property that's been lawfully taken. >> are there other people suffering from the impairment where that could be remedied? syndicate is the legal assistance foundation that we have in chicago and they also have a fraud department and a couple of attorneys that work on

cases for people who don't have guardians. sometimes they refer to as if there is us if there is a need for the guardian that often they just have people that walk in. the office is very small and one of the biggest issues we are confronted with is not just the deed of the fraudulent cases but some of the people that we work with makeovers that this is because of the cognitive impairments. whether this is severe or not and so they need more help. sometimes they are very intensive cases that require a lot of work in detail. >> thank you for being here this morning. we want to thank the ftc for always being willing to come and talk to the subcommittee in having us over to the offices earlier in the year and adding me to the regional offices down

in dallas and that is all very helpful and i've learned about a number of resources that are available. let me ask you a question about your involvement when you have a foreign agency involved. i'm not sure that i understand what it is but law-enforcement tools do you have two people to put a stop to these practices, and what have you learned about multijurisdictional enforcement? >> it is challenging. there are independents. the tools the committee has given us have provided extensions but we've also worked closely to build a strong relationship with the law-enforcement authorities and other countries in canada and in the united kingdom. we talk about jamaica, we see a lot of lottery scams in particular emanating from jamaica and we have a specific

group which is the number of law-enforcement agencies in the united states and the jamaican authorities to help these kind of cases as well as cases in the united states. but there are challenges with these issues. >> let me ask both of you whether you have at your disposal for spotting trends so that you might anticipate that something is happening in one location that it might metastasize or migrate to another location? are there tools you have where you can keep track of things popping up on the radar screen packs >> the primary tool is the elevated base. we get complaints from many consumers and we also get complaints from many other law-enforcement agencies such as the better business bureau and we routinely analyze the trends

for the increasing spikes to the target. >> i mentioned that we have a consumer response department where we accept complaints from consumers into the office for older americans. we look at the complaints that are submitted by the older consumers who look for trends and spikes as well. the information that we come from the complaint is appropriate and we send to our law-enforcement division depending on what we find. >> it is the nature of the services that you all have. i will tell you as a regular guy, when i was caring for my parents as they aged, i had no idea.

there were some near misses and i really hope this subsidy hearing makes people number one aware of the problem and number two, aware of where they can go for help if they think that they've been victimized and i would yield now to the gentle lady from illinois, the ranking member of the subcommittee. >> thank you mr. chairman, and i appreciate the last comment. hopefully we really can work together to drill down on this. i wanted to ask a question. as you said that you represented the guardian for 600 people. how do those people get to you and how does that happen? >> we often have referrals from judges who will come into the house in court and have an issue from the banking institutions as well and neighbors and all sorts of people. >> so, would you estimate that

there are a lot of people out there who do not have the benefit of the guardianship. if there is an appropriate person friend or family member. i think we do offer some services, specifically the fru unit that is able to help people that is unlike any other organization in the city and state. >> you had said that a third of the people -- so that would be about 200 of those are victims of some form of exploitation, did you say by families? >> by family members but often

it's a lot of other people, a lot of strangers that do it. but there's a lot of people that hold great positions of trust that end up doing it but can be a family member. i'm wondering if you can describe some of the types of the financial exploitation of seniors under the care have experienced. >> sure. i remember a young lady who was younger she would go to the same bank of the institution for years. it used to be a company that produced books and other things and she and her husband had a small amount of money about $300,000. this person -- she befriended her, but a sitdown with her

every time she came in the bank she started to rely on her to write checks for her bills and she ended up taking about $300,000 from her. the bank called us and ultimately after a little contentiousness, we were ultimately able to recover the money from her. you also have people who have been exploited for going off to an elderly gentleman, 90-years-old, going to the hospital, a cna at the hospital who ended up volunteering to become a caregiver who then stole about $500,000 from him. those are just some of the cases that we have had all kinds of cases similar to that. >> some of these were so personal community -- i don't know all of you but you said a lot of people don't report it and i would think that when families are involved that it becomes even more difficult.

this is for all of you, how can you encourage people to protect themselves to actually report by family or a former trusted friend has clearly exploited them? how can we break through that? >> we would like to have the committee members provide information on the website into the constituents of the resources that we provide. it's important to help us get the word out and we would like the committee to assist us. for us, the campaign is premised on the notion that it senior citizens opened others get the word out and not be ashamed to talk about things that have happened and to protect each other. so that has been the focus of the consumer education, and it's sort of breaking that barrier and getting seniors to talk about it with each other. >> let me ask you -- did you have something? >> i was going to say something

similar we were out and about and encouraging the reporting of abuse. it is something that really needs almost a mass media attention. we have to train the trainer program that we are out and about and with intermediaries training people constantly about how to spot and intervene and report when -- >> do you partner with senior citizen organizations like aarp tax >> we are a very small office with 57 million constituents, so the only way that we could effectively do our job is if we connect with a service providers state local government entity and other federal partners in order to, you know, with organizations that are on the ground providing services to seniors and many of them will engage in a smart training for

their clientele. >> can i have one question? i wonder does the state attorney general have a role in helping the office with financial exploitation? >> yes in terms of some of the bigger cases, people that produce systemic exploited things, they do get involved in the lawsuits and as does the u.s. attorney's office as well. i have to say that to me, one of the biggest tools we can use is to give to the smaller committee groups to go to churches, to go to other places. we work with a small agency and on the west side of chicago called south austin coalition. and they are -- they know the people. they bring folks like myself and these two people here are from their organizations to come and talk to the very smaller groups. i've generated certain cases where we have been able to help people from those groups because

i'm not sure how much some of the folks on the west side and north side of chicago are looking at bigger media attention on something like that or reading some of the brochures that are jeered towards helping, so it's as simple as you can get it in as grassroots as you can get it that is the most effective tool that i have seen. >> i would really like to meet further with all of you and talk about ways that we can partner on this and i look forward to the committee following up on this. thank you. >> the chair thanks the gentle lady. the chair recognizes the vice chairman of the subcommittee from new jersey for five minutes for your questions please. >> thank you mr. chairman. and my thanks to the distinguished panel for being here. i hear from constituents all the time about being bombarded with robo calls from those that have

spoofed their phone numbers to look like a local call were like a state or federal agency in order to scam them out of personal information. indeed yesterday my wife received such a call in new jersey, someone claiming that we were in rears with the internal revenue service and she chose quite appropriately enough to return the telephone call. she telephoned me and our office looked into the telephone number and it was someone who was scanning constituents i would imagine across the country. >> i've introduced a bill with grace from queens of new york city, a democrat and chairman emeritus of the committee called the anti-spoofing after 2015 and i would encourage colleagues to examine the bill and it would examine the caller id spoofing

and expand the communications act of 1934 to include the text messages and voice over ip calls. >> mr. kaufman, the ftc wants a do not call list. would you please explain in detail what my constituents and others who are on the list should do if they believe that they are being called by the scammers were organizations in violation of the protection tax >> sure. thank you for the question. the calls are issued as a challenge. the first word of advice that we provide if you receive one hangup and don't provide information, just hang up. >> i hope that we will take that to heart. do not respond to such a call. >> the technology issues are challenging and it's become expensive. we are bringing law enforcement actions that the cases are challenging.

.. the sheriff about county and that share of somerset, county new jersey has taken action, but this happens quite frequently. how do they coordinate to combat

this? >> record in a quite well with them and we have frequent phone calls and are careful we don't overlap in terms of law-enforcement action. >> thank you. i do not know much about your office. you are appointed by chief judge of the circuit court of cook county. is that accurate and is that true in all of the counties in illinois? >> actually, that's only cook county. the other public guardians are appointed by the governor. >> in various counties? >> the various counties, which becomes a problem sometimes. >> yes, yes. then, do you report to the circuit court of cook county? how does that work? >> yes, i'm appointed to each

one of my cases and we have to report to the court on an annual basis. we file inventory and file a yearly accounting and kind of a goings-on of the ward, social and what we've done with award and file a yearly annual report with the cook county commissioners. >> thank you and good luck with your continued work. i yield back the balance of my time. >> the chair recognizes the gentleman from new jersey. >> thank you mr. chairman. i wanted to ask, a variety-- one of which is a phone call from a person who falsely claims to represent irs. >> with their ranking member

yield for a moment? my wife personally yesterday, yesterday. >> i thought you were saying that, when i walked in. so, you know, this person threatens the victims with suspension of the license if a amount of money is not paid immediately in the scammers are aggressive and asked for personal information and it seems legitimate. definitely has affected many constituents in my district. i'm not making this up. people including seniors, one of whom was recently threatened with home foreclosure they didn't pay a specific amount. so, i would like my constituents to be prepared if they receive a phone call from an irs in posture. can you confirm an actual irs agent would never call to demand immediate payment or ask your credit or debit card numbers on the phone or threaten arrest for not paying? >> i can absolutely confirm that. those are imposter scams.

>> i appreciate that. i will repeat what you just said , so people understand that in my district. i want to ask also about reporting fraud. many consider financial exploitation to be a silent crime because victims are often too ashamed or embarrassed to report what has happened. additionally, it can be challenging for seniors to serve as a criminal witness and law-enforcement individuals identify lack of reporting and that the obtaining of data-- can you clean the role bug database plays? are there any challenges and what steps need to be taken to increase the use of the database and reporting of senior financial exploitation in general? >> the database is an important tool for law-enforcement

agencies and we continue to develop it an improvement. it is a tool for law-enforcement agencies throughout the country to have access to millions of consumer complaints and to look for trends and look for specific areas that they might be interested in an very effective tools and in many of our cases have originated from complaints we received and that are in the database. >> let me ask you, can you give us an update on the consumer complaint database? how many complaints do you receive and what types of fraud do you see and how is this information been useful in developing policy? >> well, i will say that we know that there has been an excess of 63000 complaints that have been submitted by consumers 62 and older since we began accepting complaints.

what we do is go through them, look at them to see how older consumers are faring in the marketplace. we know from looking at the complaints that there are many older consumers who have difficulty with their mortgages and with that collections. these are the two largest areas that older consumers are complaining about, which by the way is not unlike the younger counterparts. there is often a misconception that older consumers are not engaged only in the marketplace, and that is not true. are consumer response action for consumer products and services, which is what the bureau focuses on. however, consumers also add narrative and their complaints and we have the opportunity to find instances of financial exportation of stories that are related to that in the complaints as well.

>> thank you very much. thank you mr. chairman. >> the gentleman yield back to the chair and recognizes the gentleman from mississippi. five minutes for questions. >> thank you, mr. chairman. we certainly have a lot of issues that need to be discussed i know this will come as a surprise, that we do some bipartisan work on occasion, so i along with the representative have introduced legislation in july, hr 3099 to raise family caregiver act, which would implement the bipartisan recommendation of the federal commission on all long-term care that congress requires development of national-- to support family caregivers. similar in scope to the national strategy developed to address alzheimer's disease. the bipartisan legislation would require the development maintenance update of an integrated national strategy to recognize and support family

caregivers. i think this is an underreported issue. unless you are living in the middle of it, a lot of people don't understand what is going through-- my mother's him as 92 and we are going through issues with sitters and ourselves trying to take care of her and deal with those issues and it's a difficult problem for a lot of families. we deal with concert and i can just say from personal experience for a number of years we had phone calls, credit card offers, switch your credit card over here, do this, change your phone service to the cable and then if you don't like that you can change back. we finally were able to get to the point and hope there is something to help families that are doing this is to tell that person to say don't do anything

until you talk to so-and-so, your turn-- son, trusted family member those things sometimes will help, but this is a question for mr. kaufman and ms. keenan as well. i'm interested in whether your agencies focus on the caregiver's role in the elderly from fraud and do you have-- you mentioned some, but do you have educational materials or guidance for these caregivers and others in a fiduciary position of seniors and how our lawyers and financial individuals dealing with fraud against their elderly client? >> we have a wide range of consumer materials available. materials focus specifically for seniors, but i think we have more materials on specifically caregivers and financial institutions of that nature.

i think i might differ to my colleague. >> mrs. canin. >> excuse me. >> take your time. >> i'm actually very happy to have this opportunity to tell you about one of our very popular publications, which we call managing someone else's money. these are how to user-friendly guides for nonprofessional fiduciaries, people who are taking care of the financial matters for a family member or a friend. it includes information that helps the lay fiduciary know what his or her responsibilities and duties are, so another words if you are caring for someone and you have access to their money, it's not okay to buy a car with those funds. simple things like that, which should be known, but unfortunately sometimes there is confusion. in addition, in the guides we

include information about how to spot scams and fraud and what you can do to protect the person who you are caring for as a financial caregiver. we had these national guides and where in the process of an barking on rolling out state specific guides including a template, which would allow states to do their own as well. >> you mentioned you had 63000 complaints involving people 62 years of age and older and you mentioned mortgage related debt collection. we have the federal fair debt collection practices act that deals with a lot of that, celeb that 62000, you are not saying all 63000 were fraud of. you are just saying those complaints were registered; correct? >> corrected. >> if the time i have for both, you mr. kaufman and ms. canin as well, i am certainly interested in the cross agency initiatives that protect seniors from fraud,

neglect and exultation. would you both in a-- quickly discussion or work with the elder justice court council and how that health and human services and what i council's efforts that have been constructed towards your agencies efforts and what do you think could be improved? if i may be allowed to-- continue, mr. chair. >> proceed. >> thank you. >> we are members of the council and we have participated in a number of events and partnered with organizations throughout the comp-- country. we found it to be an effective tool for sharing information with other law-enforcement agencies and i cannot think of any improvements at the moment. >> thank you. >> we are one of the 11 agencies and we have been very active in participating in the elder justice court in council. we also find helpful for coordinating interactions. each agency brings to the table this expertise in different jurisdictions and it's clearly a

situation where we need all hands on deck and our work often will complement those of our sister agencies. >> thank you and i yield back. >> the gentleman yields back in the chair recognizes the gentleman from massachusetts. >> thank you, mr. chairman. always a perry-- a pleasure to hear massachusetts from our friends. pleasure to have you here and i want to focus on an aspect of medicare, if we can. the enroll-- open enrollment time begin soon and for the nation medicare beneficiary an important time for the help and drug plan. however, beneficiaries should be vigilant as this also represents an opportunity for fraud and according to an article by u.s. news & world report i will request medicare scams that a victim reveal their medicare number. it's important seniors know how easily it is to spot these open

enrollment scams. mr. kaufman, would like to start with you. i understand the sec won a victory in court last october after filing a complaint against a telemarketing scheme that was designed to trick and did trick seniors by pretending to be part of medicare. described the specifics of the case and why that-- >> thank you for knowledge in this case. it was called sun bright and telemarketers were claiming to be affiliated with medicare and falsely promised new cards for consumers and required people to provide their bank account numbers. they used the bank account numbers to withdraw several hundred dollars from the consumer that they contacted and it's consistent with the cases we have seen repeatedly where they are misrepresenting affiliations with government entities or other entities to scam people out of their personal information and out of their financial benefits. >> how did that turn to

coordinate with cms to prevent this type of fraud? >> we do work with them and we talked to them and we also issue alerts. when there are changes in health benefits that are available we know the fraud will follow and that's when things have seen at ftc, when there is a new program, a new scare, fraud will always follow and we issue alerts. >> so everyone is clear, is it true medicare will never call seniors with products offered or for request of their medicare number connect that is correct. we will not ask for your bank account information, in particular. >> insurance agents are not allowed to visit your home. >> that is my understanding, but i would have to verify that. >> that's my understanding as well. thank you. what should consumers do if they or someone they know has received one of these fake requests? >> hopefully, they have not provided their information and they had they should contact

their bank immediately and try to rectify the situation. they should also bought-- file a complaint with ftc. >> thank you. with that, i yield back. >> i was going to dig in my purse for my medicare card. every once a while i hear from people who say how come social security numbers are on the medicare card, so it's in the wallet of everyone over 65 and we are told it's very cumbersome and costly to change that, but is that a bad idea? i wonder if you can answer. it's right there. as the number, so when we talk about medicare number, it's a social security number.

>> i'm not sure about this, i believe the medicare reform we passed in march and april of this year, the removal of the social security card and that was added to the bill passed earlier this year, the bill that repealed the sustainable growth rate formula, but i will find out about that. >> okay. >> that was a weakness in the system. >> i agree with you. it's important not social security numbers not be shared or readily accessible and i would be got to talk to you more about that issue. >> and maybe we just fix it. >> every now and then we fix something. >> i can honestly say i can't tell you what a card for medicare looks like. thank you so much for being here

because something started happening to us about a month ago in our office, which is odd and we started getting people calling us and they received a call from our office pertaining to be from our office and asking for personal information and it worries me because their automatic trust that we have built with their constituents and getting phone calls from people that supposedly are from our office. i can imagine in business, we use a rule that you only receive roughly around 1%-- about 1% of those receiving those calls. is there an enforcement to read is there a lack of ability to go after these individuals even if we get there and-- information? what are the penalties for doing that?

can one of you guys offer. >> i have received phone calls in my office from people who have been contacted by me and it's definitely a prevalent scheme and fraud that is out there. the ftc is bringing action and when we can find the perpetrators we are civil enforcement agency, so we also know criminal law enforcement is looking at this as well. but consumer education is a really important focus. >> we talk about consumer education, but obviously my grandparents for example, they are checked out and i am not saying that in a bad way. grandpas 94 years old and grandma i think is 89. they are not reading these manuals that come out. they are not online. we are talking about the ones that have a cell phone-- the information is for younger

generations. >> i would encourage you to take a look at our past it on brochure that is about three paragraphs long. we researched with seniors to find out effective ways to communicate. >> i get that, but what i am saying is is there a problem here because it's growing. is not going backwards and obvious is profitable or they wouldn't be doing it, so how can we help you? there has to be someone knowing that if you do this there is a better chance you are going to get caught, not a slim chance you'll get caught. >> there is always more that we can do. i think the combination of the ftc working with other law-enforcement agencies. but again, it is a problem. >> i believe you guys have

recovered roughly $15 million. what are your best tools and maybe we can work together here because if you recover that out of one county, i'm just floored. >> i think we too are a civil litigation organization and for us the more practical thing is to get the money back because we need it. the people we work with needed. i think criminal enforcement is important and when i first became a public guardian are most 11 years ago i think there were fewer cases brought against people again because of witnesses and record-keeping, but since then it has increased, the amount of litigation, both from the states attorney's office in cook county as well as the us attorney's office. >> what i'm getting to is what are the most-- what is the most effective tool you are using to make that happen in one county

to recover that much money? >> we work with probate, a specific section of probate, which we can recover property that is stolen, concealed from award and so it's just lawyers doing our work and do not job. >> how do you find the people? >> get referrals from banks, neighbors, churches, from hospitals and once we have qualified than those are the cases we go after. >> really, you just have to spend the time and go after the problem? >> absolutely true. when i first became public guardian we had one person working on it and because of the growth in this area we added more resources. >> senators, i appreciate it and mr. kaufman and ms. cannon i appreciate what you're doing,

but i think we need to improve the enforcement side of it. we have to make it where they believe there's a better chance they will get caught and it-- not a slim chance they will get caught. >> the chair recognizes the gentle lady. >> thank you, mr. chairman. in my home state of indiana our attorney general is taking a lead in combating fraud parties seniors in six years ago they launched free senior consumer protection workshop and travel through 92 counties in indiana and has reached over 200,000. [inaudible] >> i do have to say people often are embarrassed.

they would don't want to share if they have been scammed and i appreciate the work that you all are doing. i want to share with their families. they don't want to talk about it and it might even take a while for them to realize it and i am curious-- i'm a former us attorney and i'm curious whether or not any us attorneys, whether in the civil are engaged. i know they are on identity theft because that is something we have been working on for a very very long time. i'm curious whether or not any of you are working with any us attorney's offices on any task force or civil, whether it's the civil division or criminal division. this is for any of you. >> we were closely within-- although we lachrymose 40 we realize that a lot of our cases can be prosecuted criminally and we provide referrals, leads and

support to criminal law enforcement. since we started this program in 2003, while over 700 of our defendants have been prosecuted criminally. >> terrific. >> i'm in the consumer education division of the bureau and i would have to get back to you regarding whether our enforcement team are engaged with the us attorneys and i suspect they are. i know that we are intricate contact with the department of justice and we have frequent indications around the country on prosecuting older exploitation. >> in our small office we do work with the attorneys office. i think the relationship has developed over the years and working with cases and so it has worked very well. we have even worked with the postal inspectors on some cases as well, so i think it becomes

for us a relationship builder and i think we have established that at least in chicago. >> thank you. with respect to your respective agencies. i'm curious how may people work on this specifically? going back to my days, hemi- ftes are kind of focused on this? >> at the ftc we don't have our attorneys designated as working continuously on senior issues. we have about 440 people in the bureau working on a wide range of issues, but we have a number of cases affecting seniors throughout our bureau. >> thank you. >> our office is small. we are dedicated, but small. we have the benefit of being able to work with other divisions and offices throughout the bureau, so when we become aware of a particular problem where it appears that it may

include violations of the law, we bring in other that have the ability to engage in enforcement we also have a market division and research division, so we are frequently working and even though we are small we are able to work with others in the bureau. >> thank you. when the ftc does, on the rare occasion when you recover funds, how is it determined-- how do you ensure that those scammed receive the funds? >> we get customer lists and we will do some sort of pro rata distribution and there are cases where we are very successful and sometimes the funds are no longer available, but our number one priority is finding the person and then getting the money back to the consumers. >> how does that happen? >> we have someone that

coordinates and contractors that we work with and depending on the nature of the fraud we often have customer lists and send out checks to read sometimes there might be a claims process and it varies on how the consumers were defrauded and what information we have. >> just one last question, if i might, mr. chairman. how do we make sure when so many of these financial abuses go underreported, under recognizes our prosecuted, what would you like for us to do? >> i think one of the things that is lacking is our organizations like mine, not just necessarily guardianship were, but that focus on recovering monies on a local level, and there's a lot of people we can't help. if there is some way the federal government can support legal assistance foundation or other legal services for establishing attorneys in those offices that focus specifically on this it

would be very helpful. >> thank you and i yield back. >> the chair recognizes the gentleman from north carolina. >> thank you, mr. chairman. thank you to the three witnesses, mr. coppin, ms. cannon and mr. harris. mr. harris, i won't be able to get to you today, but the questions will be directed to the other two. please don't take that personally, but i know a little bit about the public guardian program. what was your predecessor's name, the general and that was there before you? >> patrick murphy. >> that was his name. my stepdaughter, tracy, worked for patrick for many years there in chicago. she had never heard of the program until she went to work there and i have the greatest amount of respect, so thank you for the work you do. the ftc recently created a program called pass it on in

which the commission reaches out to other americans with information about avoiding common types of fraud. contacting them at places where they gather and interact like libraries, clubs and adult facilities. mr. kaufman, can you explain why that approach might be more effective at disseminating the anti- fraud information than a-- publishing the information on a website or a mailer. >> we engage in research before we instituted the pass it on program and met with seniors and people who sit-- provide support for seniors. ..

this is a campaign we launched a year ago. we're continuing to explore it. but it has shown effectiveness, and it's been very successful, a lot of positive feedback about the program and we'll monitor and see how it can be modified and improved. >> miss cannon, as one who also promotes financial literacy, do you agree with this approach in general? >> yes, we do. we have very similar materials in that -- or at least the type of materials that are written in plain language, that are nonjudgmental, and we frequently

will actually use the ftcs materials, the "pass it on money materials and we goo conferences together and share tables and distribute our materials jointly. >> finally, mr. chairman, the ftc conducted a workshop in october of last year that explored some of these issues, including how fraud affects different communities in different ways. mr. kaufman, what were some of the outcomes from the workshop, in terms of the consumer groups and the industry know how to address the problems that are really, really unique. >> every community initiative we kicked off a year and a half ago. pass it on is a result of that. we realize there are experts on senior issues that provided information on how to reach seniors and focused on issues affecting spanish-speaking americans and that continues to be an effective program.

we're looking for law enforcement actions and targets where they're targeting specific populations and want to make sure our law enforcement and education programs reach all americans. >> very well. thank you. mr. chairman, i'll set a record today i have to be in cannon building in 30 seconds so i'll yield back. >> chair recognizes the gentleman from kentucky, mr. guthrie, five minutes. >> i appreciate that. their mr. chairman. another hearing of the subcommittee of the same committee. i want to ask you a question on regional offices. how involved are their regional offices in combating fraud against the elderly? >> our regional offices we have eight throughout the country are incredibly involved. they do a good deal of our litigation, a lot of our fraudwork and a lot of outreach

on the local level. so, actually our regional offices provide enormous benefits the bureau and it's important they're there and on theground and bringing actions and doing outreach. >> miss cannan? >> so, i may have to -- get back to you with more details information because i don't want to say anything that may be incorrect. it's my understanding our regional offices are mostly occupied by our examiners. we have a full team of examiners that are examining financial institutions and -- nonetheless, in our headquarters, we have a nationwide approach in our enforcement actions, our consumer education engagement is nationwide as well. >> do either of you -- maybe do either of the agencies measure engagement on a regional level to see that trends that target

or scam seniors in one area more than another? >> i'll start. yes, absolutely. so, we are frequently going through our consumer complaints just as one example, and in the process of doing that, we look for geographical spikes in complaints and things of that sort in addition we're frequently conferring with stakeholders that are nationwide around the country, having calls and hearing from people on the ground about particular problems they're seeing. >> okay. at the ftc we posted a 30 different what we call common ground conferences throughout the country. we get together law enforcers from federal agencies, local authorities, consumer organizations and have a day-long discussion of the issues they're seeing, so it's a way too get more information to develop relationshipsships and o keep a breast of trends that are happening. >> and then also, mr. kaufman,

actually, mr. butterfield went down the path i was going to guam want to hear more about the pass it on program which you have explained, but you say you're going to be looking at the effectiveness of the -- pass it on. how due do you reveal effectiveness. >> it's challenging to -- our material seems to be popular. there's a high demand. we have a lot of organizations that take our materials and stamp their logo on it and use it and we deer -- delight. the measuring effect is challenging. we keep learning of more cases and that's one measure of our success. the receptiveness of people our materials is a measure as well. it's challenge to measure how effective we're being. we also do a survey every year of a consumer education web site to see whether consumers are satisfied with and we have done quite well there as well. >> hard to measure the crime

that you prevent from being committed and it's hard to find. i understand that. thank you, and i'll join mr. butterfield and yielding back time. >> chair recognizes the gentleman from florida, five minutes. >> thank you, mr. chairman. i thank the panel for their testimony. mr. kaufman, in your testimony you state the importance of the ftc recognizing trends in fraud against the elderly as a population of older americans continues to grow. as you may know the census estimates the number of seniors 65 and over will surpass americans under age 18 for the first time. actually we're 18 years away from that. 2033. so, what resources is the ftc putting toward following trends and fraud against the elderly, allocating resources to enforce against criminals targeting the elderly and educating seniors of the risks? >> it is very important priority

area for us. our consumer sentinel database which has millions on complaints is an incredibly important tool for us. it's self-report informs at the ftc and other law enforcement agencies, the ddbs, put it in the database and we're frequently analyzing it, looking for trends and developments. we also continue to do more law enforcement and more outreach. it's a very important priority for us. >> i want to commend you. i've had several seniors seminars in my area in central florida, and you participated, the ftc has, and done a wonderful job. is there -- and maybe this question also is for mr. harris. is there a line, maybe anonymous line, where someone -- a friend of a loved one who is having trouble, an elderly person is having trouble, maybe has been taken advantage of, where a person can call and report an

incident in. >> we collect complaints at ftc dove dis/complaints, and we also have a toll free number, 1-877-tfchelp. >> very good. i know that you do a wonderful job. most seniors do not qualify for your services. do you refer some seniors to other programs wherever they can be helped? and also is there an anonymous line or maybe a 2-1-1 -- we have 2-1-1 in florida where a person can call and be made aware of these services. specifically is there an anonymous line where maybe a friend or a loved one who is having difficulty can share those concerns with your particular program? >> well, with my office, you can call our office directly at 312-603-0800, and we would refer you to either an adult

protective services agency that is monitored by the state of illinois or the city of chicago, or you can call 3-1-1. quite frankly in chicago and get help in that way as well. >> what are the ways you gather information with regard to maybe candidates that need your services? >> we talk to the medical providers, doctors. we also have some power, investigatory power to look at previous reports of adult abuse or exploitation of our wards. we also have some access to financial records. vis-a-vis an investigatory process. if we open it for an intake. we use subpoena power once we have a case that's open and other legal tools like

depositions and other discovery tools. >> thank you. i yield back my time. thank you, mr. chairman. >> chair thanks the gentleman. the chair just want to observe because question did come up on medicare numbers. and social security numbers on medicare cards and that indeed was part of the law that was passed in april. my understanding, and i've got crack staff who are always watching me and they provided me the information. i think it is within four years time. it's an agreement between the secretary of health and human services and the commissioner for social security but that it a change that is coming. not an immediate change if anyone gets their medicare card in the next couple of months, may not reflect that change but is was peaced and sign into law by the president. so one of those times where things worked as intended. seeing that there are no further members wishing to ask questions for the first panel issue wanted to thank our witnesses for being here today. this will conclude our first

panel and we will take a two-minute reassess to set up for the second -- recess to set up for the second panel. [inaudible conversations] [inaudible conversations] >> welcome everyone back and thank you for your patience and taking time to be here today. we'll move into the second panel for today's hearing. we'll follow the same format as the first panel. each witness will be given five minutes for an opening statement, followed by a round of questions from members. for the second panel we want to welcome the following witnesses professor charles wallace, the undergrad program director for computer science at m michigan tick neck cal university, and my toby stanger, senior editor for

consumer reports. we'll bin with you, professor wallace. you're recognized for five minutes for opening statement. >> thank you, for the opportunity to speak at this meeting. and the students in my math course who get the day off also thank you. my name is charles wallace, i'm associate professor of computer science at michigan technological university. michigan tech is a research focused university located in the upper peninsula of michigan. we have an emphasis on technology, engineering and scientific degree programs. for the past four years our breaking barriers group at michigan tech has organized and participated in an ongoing outreach program in conjunction with a local public library called "automobile at the library" that trains elderly residents in digital literaciy skills and exposes our students to the realities faced by

digital nonnative. through our experiences, we have identified recurring themes. of these, the theme most germane to the current hearing is anxiety versus exploration. lacking appropriate grounding in this new technology, our senior patrons alternate between naive trust and paralyzing suspicion. neither of which leads to comfortable, productive use. our program addresses this problem by providing a safe place for learning among peers, interaction with mentors who model appropriate use, and develop a healthy balance between caution andler and racing -- and exploration. residents over age 65 constitute over 15% of the population of our rural area, because of the larger than average numbers of elders without family support, many of whom are below the poverty line, there's a strong need to help with digital literacy in this community. the experience of using a compute are device is well-known

to cause anxiety in elders and our experiences bear this out. many learners are fearful of going online because of stories of fraud and identity theft, and experiences of relatives and friends. without a basis of understanding for how malware and others work they have no mod toll minimize their threat level. anything can be a threat so many learners fear using a computer altogether. one unfortunate consequence is the reluctance to explore, and for newcomers to stop shop for products and services. this is a vital form of learning, exploration. to complicate matters further it's often far from clear where l a person is a victim of criminals or aggressive. selling of a. >> -- a 16-year-old user runs a small service based business. he paid a company hundreds of dollars because they convinced

hem that he needed to be on preore tiesed search lists for google and bing. however, mitch did not know what the service was or how it could help his business. after several months he attend as participant in the library help sessions and described this experience tutors determined that the company that sold the service to them, explained to him what he paid for. mitch's business has no online presence and being a local business, being searchables a an advertisement on search engines does not help him. in this case, mitch was not a victim of fraud or theft, strictly speaking, but paid a legitimate business to help him without understanding the services he was paying for. it's clear that basic literacy and security online behavior is an essential weapon in fighting fraud against the elderly. we believe online at the library is a learning model, safe place for learning, asking potentially

e embarrassing questions and gaining strength from seeing peers in the same position. personal contact with mentors who can model appropriate behavior and altitudes. development of healthy online behavior. finding a balance that keeps seniors safe without stifling their creativity and protective energy. -- productive energy. breaking barriers, members are developing a sociotechnologial approach to help older learners with distracts for navigate the internet. this approach involves small interactive group learning actives along with software tools to help them with navigation. over the next two years, breaking digital barriers will help zimmerman already -- similar learning programs in michigan. more information can be found outer breaking digital beareer web site, mtu.edu/bdb.

>> my turn? chairman burgess, ranking member, committee members, thank you for inviting me to speak. i'm a senior editor at consumer reports and also represent today its advocaciy arm, con southerlies union you. may wonder why consumer reports better known for rating products and cars would highlight elder scams. retirement security is as its core a consumer issue. people have a right to expect their hard-earned savings are protected. when i was asked to testify i was a bit nervous, but then i thought about edna, an 86-year-old great-grandmother from harvey, north dakota, who had the courage to testify in federal court earlier this year against a man from jamaica who was part of a vast conspiracy to

defraud dozens of people, mainly seniors, in a sweepstakes scam. edna lost nearly $300,000, her life savings. most seniors would not be willing to talk, but edna was angry and wanted her money back so in spite of being nervous and scared she poke out. sadly her money may never be return but she tend convict a really bad guy. edna was one of eight victims who spoke to me for a recent article on elder scams that appeared in consumer reports. i'm truly grateful for the willingness to have their names and portraits published. they told me they did it to warn other people so they might be spared. this isn't typical of elder scam victims. most el dear fraud cases are unreported. the victims are elm barrassed and i ashamed and scared if they tell, people will think they're stupid or luigs their cognitive abilities, but honestly, these

scandals can victimize anyone. the criminals catch people offguard, they sound very convincing, they require the victims to make very quick decisions, and they insist on secrecy. this is their job. they do it all day long. their tactics could work on anyone in the right circumstanceses but the scammers know that seniors, in part because they're proud and want to retain their dignity, often keep quiet. so we don't hear about these crimes as often as we should, and that is my point today. these scams are rampant, they're growing in number and complexity, they run the gamut from sketchy phone and mail solicitations to sadie contractors, to dishonest national advisers. we need to document them better and seniors need to feel safe about speaking up about their victimization, and getting help. understandably they're concerned about losing independence if they admit they've been taken or need help avoiding getting conned but there are measures

they can take to preserve their dignity and independence. there's a web based service called ever safe. the service identifies any unusual activity in seniors' accounts and then sends alerts to the senior or a trusted adult child or other third party. but the senior doesn't have to allow direct access to the account. the senior can retain control. of course, consumer reports recommends signing up for the federal do not call registry, and the direct marketing association resident mail preference service to reduce unwanted calls and mail. we have also tested and recommend some call-blocking machines that block robocalls which can be the basis of phone scams. notably we found a free robocalling blocking service called no mo robo and it's effect tisch but not available on traditional land lines which is what seniors have. there's no reason why tools to block unwanted calls account be made available on land lines but the three top land line providers don't offer them. so consumers union has an

end-robocalls campaign that gathered more than half a million petition signatures. we're soon going to deliver it to the phone companies to demand that free, more effective tools be havered. these. help stem elder scans but mt. be supplemented with education. financial exploitation needs to be part of the financial conversation. we publishedded articles about it. but i'd love to see ahollywood movie on this. it's a plot with position comment stories, heroic investigators and victims. some seniors are willing to speak out. there's an act troup in los angeles called the stop senior scams acting program. the oldest actor ills 97. the write sits dramatizing scams and perform them in senior centers and other locations. some of the actors themselves have been scam victims so they

can speak from experience. after performances audience men's report they have been scammed. they might not be willing to tell their own family us but will tell their peers. seniors need to feel it's okay to talk to law enforcement. at one actor in the program said, don't keep it a secret. you're not the only one. thank you. >> thank you. and i thank both of you for your testimony. we'll move to be questioning portion of the hearing. we'll begin the questioning on this side. >> thank you, mr. chairman. and thanks to you both for being here. some great stories. i know you're very excited today and they're probably watching as we speak so we wish them well. just in case they're there.

ms. stanger, you have spent obviously a significant amount of time putting together the lies, secrets and scams for consumer reports. what was the most shocking thing you learned while you were researching the article? >> i think the most shocking this is that it really is so around. every person i turn to in the elder justice community and adult protective services, when could i call them and say i was doing this, they would say, thank you, we need to have this publicized. please. it's everywhere. in my own family, with my husband and i together, we could think of four instances of various elder abuse situations. it is everywhere. and it is really underreported. it was very hard to get eight people to talk with me. it took a lot of effort, and i'm very grateful for their bravery because people are afraid to talk. and so the conversation i think needs to change to, not being afraid. >> it's so humiliating for them

to have to share that and they'd rather just suffer in silence so it doesn't take a lot of courage to do that. i know dealing in the last year with a gentleman, senior, who fell for one of the scams of send us some money and you're going to get a lot of money back. the thought it would help me pay or my adult kid's graduate school ask take care of my wife and we said, don't do it. and he did it anyway. and he kept doing it to the tune of probably most of his savings, even though his wife -- i don't know yet that he is still grasped what he has done, and it's a very difficult thing because when you have people that can't really control that and fall prey to that and they don't have someone overseeing, it's very difficult, and i know in your article you talk about the great senior-led initiatives, educating peers

about the fraud risk. have you seen any similar initiatives to educate caregivers and what experience with the caregivers to the seniors did you have in your research? >> well, think the cfbb's program where they have booklets, several booklets to educate caregivers and people who have fiduciary duty over a senior's account, they think those are very helpful. those are new. and is a understand they're being promulgated in different states. so i think that's very helpful. but, yes, think caregivers need more education. it's something we can start to do in our publication. clearly, i spoke with one woman who -- exactly the same thing. he father and mother were involved in a scam and she just did not know how to stop them, and so widespread education can be very useful. sometimes i found a victim services specialist -- victim

specialist from the fbi, in los angeles, who people come to her when they have relatives who are repeat scam victims and these are often the toughest because they've developed an emotional relationship with the scammer often and they really trust them, and this woman from the fbi, she tells people, call me. if somebody calls you, you call me, and i'm going to walk you through this. i'm going to keep you from getting scammed again. and sometimes it requires really hand in hand cooperation. >> some of these -- you'll see they'll get into it, send them a few thousand dollars, and, we'll we've got these additional costs to cover, all of a sudden the think i'm in this far and they keep going and going and it's just heartbreaking. what you see. thank you for your work on that. and really do appreciate that. professor wallace, in your testimony, you talk about how in

your experience you have seen a lot of anxiety about using technology, and very naive trust about technology that poses risks for consumers, and things are constantly moving as we see, and my adult daughter -- i know we're on the record here -- has quit using facebook once my wife, her mom, started getting on facebook. so you see all these transitions -- >> facebook is for old people. >> there you go. so we're seeing all this transition there. so, what are those effective methodses you can teach seniors to be safe online that won't break their device or trusting every single popup that comes through on the screen? >> it's a tough problem. one thing that helps a lot is being among peers. and realizing that they're not alone, and that other newcomers

to the technology are struggling with the same issues. one exercise that we have done in the past-i think has been effective, has been considering what they do with physical postal mail that they get, that looks suspicious. it has a certain smell to it. right? and you get something in the mail and you look it's and say, no, i'm not going -- i'm going throw this in the waste bib. >> professor wallace, my time is long over. i'll yield back and hopefully they can finish. >> sure, sure. >> thank you. >> chair thanks the gentleman. chair recognizes gentle lady from illinois. five minutes. >> mr. stanger in our first panel we talk about shame and talked about it again in this panel. so, i'm wondering if there are tools other than the individual having to report that couldn't be more effective?

in your article you mention several cases in which a bank allowed older people to repeatedly withdraw large amounts of money and presumably when that was out of the presumably when it was out of order for that particular person, and actually did nothing to investigate whether fraud was involved, and perhaps didn't even notify anybody until the point at which the person attempted to get a loan from the bank. so, what should be or is being done to encourage banks to take a more active role in intervening in these situations? >> i don't have that much information on this except that there are some banks that are making it part of their company-wide effort, such as wells fargo, i understand, where they're letting -- educating everybody to be a reporter. in not every state has the same law in terms of who is suos