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                                                      Calendar No. 191
115th Congress     }                                    {       Report
                                 SENATE
 1st Session       }                                    {      115-141
_______________________________________________________________________

                                     

   

                  SENIORS FRAUD PREVENTION ACT OF 2017

                               __________

                              R E P O R T

                                 of the

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                   on

                                 S. 81

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                 August 1, 2017.--Ordered to be printed

                                   ______

                         U.S. GOVERNMENT PUBLISHING OFFICE 

69-010                         WASHINGTON : 2017                  
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                     one hundred fifteenth congress
                             first session

                   JOHN THUNE, South Dakota, Chairman
 ROGER F. WICKER, Mississippi         BILL NELSON, Florida
 ROY BLUNT, Missouri                  MARIA CANTWELL, Washington
 TED CRUZ, Texas                      AMY KLOBUCHAR, Minnesota
 DEB FISCHER, Nebraska                RICHARD BLUMENTHAL, Connecticut
 JERRY MORAN, Kansas                  BRIAN SCHATZ, Hawaii
 DAN SULLIVAN, Alaska                 EDWARD J. MARKEY, Massachusetts
 DEAN HELLER, Nevada                  CORY A. BOOKER, New Jersey
 JAMES M. INHOFE, Oklahoma            TOM UDALL, New Mexico
 MIKE LEE, Utah                       GARY C. PETERS, Michigan
 RON JOHNSON, Wisconsin               TAMMY BALDWIN, Wisconsin
 SHELLEY MOORE CAPITO, West           TAMMY DUCKWORTH, Illinois
    Virginia
 CORY GARDNER, Colorado               MARGARETWOODHASSAN,NewHampshire
 TODD C. YOUNG, Indiana               CATHERINE CORTEZ MASTO, Nevada
                       Nick Rossi, Staff Director
                 Adrian Arnakis, Deputy Staff Director
                    Jason Van Beek, General Counsel
                 Kim Lipsky, Democratic Staff Director
           Christopher Day, Democratic Deputy Staff Director


















                                                      Calendar No. 191
115th Congress     }                                    {       Report
                                 SENATE
 1st Session       }                                    {      115-141

======================================================================



 
                  SENIORS FRAUD PREVENTION ACT OF 2017

                                _______
                                

                 August 1, 2017.--Ordered to be printed

                                _______
                                

Mr. Thune, from the Committee on Commerce, Science, and Transportation, 
                        submitted the following

                              R E P O R T

                          [To accompany S. 81]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the bill (S. 81) to establish an advisory 
office within the Bureau of Consumer Protection of the Federal 
Trade Commission to prevent fraud targeting seniors, and for 
other purposes, having considered the same, reports favorably 
thereon without amendment and recommends that the bill do pass.

                          PURPOSE OF THE BILL

    The purpose of S. 81, the Seniors Fraud Prevention Act of 
2017, is to establish an advisory office within the Bureau of 
Consumer Protection of the Federal Trade Commission (FTC or 
Commission) to advise the Commission on the prevention of fraud 
targeting seniors by monitoring the market for specific fraud 
schemes aimed at seniors and coordinating with other agencies 
to provide consumer education materials to seniors and their 
caregivers. The bill also would require the FTC to work with 
the Attorney General to establish procedures to log complaints 
regarding fraud targeting seniors.

                          BACKGROUND AND NEEDS

    Seniors, specifically Americans aged 65 and older, number 
over 43 million and are the fastest growing segment of the 
population.\1\ While older Americans are not necessarily 
victimized by fraud at higher rates than younger consumers,\2\ 
their relative net worth makes them attractive targets to 
fraudsters.\3\ Fraud directed toward seniors ranges from 
Medicare and medical device fraud to ``grandparents schemes,'' 
in which fraudsters call a senior and pretend to be a 
grandchild in need of wired prison bail, to imposter schemes 
that claim to provide technical support to remedy non-existent 
computer problems. Statistics measuring the financial cost of 
fraud targeting seniors range from $2.9 billion\4\ to $12.76 
billion\5\ annually.
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    \1\The U.S. Census Bureau projects the senior population in 2050 to 
be 83.7 million, almost double the estimated population in 2012. The 
Bureau also estimates that, by 2030, 20 percent of the U.S. population 
will be over age 65, compared to 13 percent in 2010 and 9.8 percent in 
1970. See Jennifer Ortman, Victoria Velkoff, & Howard Hogan; U.S. 
Department of Commerce, U.S. Census Bureau, An Aging Nation: The Older 
Population in the United States, May 2014, pp.1-3, at https://
www.census.gov/prod/2014pubs/p25-1140.pdf.
    \2\The FTC's third consumer fraud survey found that the overall 
victimization rate for seniors was significantly lower than for younger 
consumers. FTC Bureau of Economics Staff Report, Consumer Fraud in the 
U.S., 2011, pp. 56-59, Apr. 2013, at https://www.ftc.gov/reports/
consumer-fraud-united-states-2011-third-ftc-survey. But see, FBI Fraud 
Target: Senior Citizens, available at https://www.fbi.gov/scams-safety/
fraud/seniors, (FBI estimates that older Americans are less likely to 
report fraud because they are embarrassed, don't know who to report it 
to, or don't know that they have been defrauded).
    \3\In 2011, the net worth for households headed by seniors was 
approximately $17.2 trillion, with a median net worth of $170,500. See 
Census Bureau, Table 5, ``Mean Value of Assets for Households by Type 
of Asset Owned and Selected Characteristics: 2011'' 2011, at http://
www.census.gov/people/wealth/files/Wealth_Tables_2011.xlsx.
    \4\The Metlife Mature Market Institute, MetLife Study of Elder 
Financial Abuse, Crimes of Occasion, Desperation, and Predation Against 
America's Elders, June 2011, at http://www.metlife.com/assets/cao/mmi/
publications/studies/2011/mmi-elder-financial-abuse.pdf.
    \5\ TrueLink Report on Elder Financial Abuse 2015, January 2015, at 
http://www.nasuad/files/True-Link-Report-On-Elder-Financial-Abuse.pdf.
---------------------------------------------------------------------------
    The FTC, a civil enforcement agency, takes a multi-faceted 
approach to combating fraud that includes both enforcement and 
education efforts. In the past few years, it has brought cases 
against fraudsters targeting seniors. One telemarketing scam 
attempted to get seniors to divulge personal information by 
claiming to be part of Medicare.\6\ The scammers used this 
information to debit $399 or $448 from each of the victims. In 
another case, fraudsters used robocalls to tell seniors that a 
friend or family member had purchased a medical alert system 
for them and that monthly monitoring fees would only be charged 
once the system was installed and activated, but instead began 
charging them immediately.\7\
---------------------------------------------------------------------------
    \6\ FTC v. Sun Bright Ventures LLC, No. 140CV-02153-JDW-EAJ (M.D. 
Fla Oct. 2, 2014), at https://www.ftc.gov/enforcement/cases-
proceedings/132-3217/sun-bright-ventures-llc-gmy-llc.
    \7\ FTC v. Worldwide Information Services, Inc., No. 6:14-CV-8-ORC-
28DAB (M.D. Fla Jan. 13, 2014), at https://www.ftc.gov/enforcement/
cases-proceedings/132-3175/worldwide-info-services-inc.
---------------------------------------------------------------------------
    In addition to these enforcement actions, the FTC has 
developed a consumer education campaign called Pass It On, 
which targets active, older adults. The goal of Pass It On is 
to educate seniors about common fraud schemes so they can pass 
on this information to their respective communities.\8\ Since 
launching the campaign in July 2014, the FTC has received 
requests for more than 250,000 copies of Pass It On from 
organizations in 49 States. The FTC also partners with 
organizations, such as the American Association of Retired 
Persons, to provide education and counseling to seniors that 
have been affected by fraud. Through this program, the FTC 
refers consumers over the age of 60 that have called the FTC's 
Consumer Response Center with complaints about fraud to peer 
counselors that provide support to those that have been 
targeted.
---------------------------------------------------------------------------
    \8\ Pass It On materials, at https://www.ftc.gov/PassItOn. The 
materials are free and in the public domain and hard copies may be 
requested from https://www.ftc.gov/bulkorder.
---------------------------------------------------------------------------
    The Commission also participates in the Elder Justice 
Coordinating Council (Council), an organization composed of 12 
Federal agencies, which meets regularly to coordinate 
activities related to elder abuse, neglect, and 
exploitation.\9\ Every 2 years, the Council provides a report 
to Congress with recommendations on how best to address these 
abuses. The Council's most recent report contained eight 
recommendations for increased Federal involvement in addressing 
these issues, including a recommendation that agencies develop 
a public awareness campaign to assist in preventing elder 
abuse, including fraud targeting older Americans.\10\
---------------------------------------------------------------------------
    \9\The Elder Justice Coordinating Council is chaired by the 
Department of Health and Human Services and its membership includes the 
Consumer Financial Protection Bureau, the Corporation for National and 
Community Service, the Department of Housing and Urban Development, the 
Department of Justice, the Department of Labor, the Department of 
Transportation, the Veterans Administration, the FTC, the Securities 
and Exchange Commission, the Social Security Administration, and the 
U.S. Postal Inspection Service.
    \10\U.S. Department of Health & Human Services, Eight (8) 
Recommendations for Increased Federal Involvement In Addressing Elder 
Abuse, Neglect, and Exploitation, May 2014, at http://www.acl.gov/
sites/default/files/programs/2016-09/
Eight_Recommendations_for_Increased_Federal_Involvement.pdf.
---------------------------------------------------------------------------
    To address these issues, S. 81 would establish a permanent 
advisory office within the FTC's Bureau of Consumer Protection 
to streamline efforts to prevent fraud targeting seniors. This 
bill also would facilitate coordination between various Federal 
agencies with jurisdiction over fraud to ensure consumer 
education efforts are effective, contain accurate information, 
and are consistent across the relevant agencies.

                          LEGISLATIVE HISTORY

    Senator Klobuchar introduced this bill on January 10, 2017, 
with Senators Collins and King as cosponsors. On January 24, 
2017, the Committee met in open Executive Session and, by voice 
vote, ordered S. 81 to be reported favorably without amendment.

                            ESTIMATED COSTS

    In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:

S. 81--Seniors Fraud Prevention Act of 2017

    S. 81 would direct the Federal Trade Commission (FTC) to 
establish an advisory office to assist the commission with 
preventing fraud that targets seniors. CBO estimates that 
implementing S. 81 would have no significant effect on the 
federal budget.
    Under current law, the FTC has the authority to issue rules 
regarding unfair or deceptive acts or practices affecting 
commerce. Within the FTC, the Bureau of Consumer Protection 
investigates consumer complaints, develops rules, and educates 
consumers about those practices. S. 81 would direct the FTC to 
establish an office within the Bureau of Customer Protection to 
address deceptive practices targeting seniors. The office would 
monitor fraud activity, disseminate information regarding 
common fraud schemes, maintain a website, and log complaints it 
receives in the Consumer Sentinel Network, which is currently 
operated by the FTC.
    On the basis of an analysis of information from the FTC, 
CBO estimates that the costs of implementing S. 81 would be 
less than $500,000 annually because the agency is already 
taking actions to monitor and disseminate information to 
prevent fraud targeting seniors. That spending would be subject 
to the availability of appropriated funds.
    Enacting S. 81 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply. CBO 
estimates that enacting S. 81 would not increase net direct 
spending or on-budget deficits in any of the four consecutive 
10-year periods beginning in 2028.
    S. 81 contains no intergovernmental or private sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Stephen Rabent. 
The estimate was approved by H. Samuel Papenfuss, Deputy 
Director for Budget Analysis.

                           REGULATORY IMPACT

    Because S. 81 would not create any new programs, the 
legislation would have no additional regulatory impact, and 
would result in no additional reporting requirements. The 
legislation would have no further effect on the number or types 
of individuals and businesses regulated, the economic impact of 
such regulation, the personal privacy of affected individuals, 
or the paperwork required from such individuals and businesses.

                   CONGRESSIONALLY DIRECTED SPENDING

    In compliance with paragraph 4(b) of rule XLIV of the 
Standing Rules of the Senate, the Committee provides that no 
provisions contained in the bill, as reported, meet the 
definition of congressionally directed spending items under the 
rule.

                      SECTION-BY-SECTION ANALYSIS

Section 1. Short title

    This section would establish the bill's short title as the 
``Seniors Fraud Prevention Act of 2017.''

Section 2. Office for the prevention of fraud targeting seniors

    This section would establish an advisory office within the 
FTC's Bureau of Consumer Protection that would advise the 
Commission on the prevention of fraud targeting seniors.
    The advisory office would be tasked with monitoring the 
market for mail, television, Internet, and robocall fraud 
targeting seniors.
    The advisory office also would consult with the Attorney 
General, the Secretary of Health and Human Services, the 
Postmaster General, the Chief Postal Inspector for the United 
States Postal Inspection Service, and other relevant agencies 
to undertake efforts to educate consumers, including seniors, 
their families, and their caregivers, about fraud targeting 
older Americans. This consumer outreach program would provide 
information about the most common senior fraud schemes as well 
as information on how to report senior fraud through the 
national toll-free number or through the FTC's Consumer 
Sentinel Network.
    This section would require the Commission, in response to a 
specific request, to provide publicly available information 
about any enforcement actions it has taken against any 
particular individual or entity. The advisory office also would 
maintain a website providing information regarding the various 
types of fraud targeting seniors.
    This section also would require the Commission, through the 
advisory office, and in consultation with the Attorney General, 
to establish procedures to log and acknowledge complaints from 
individuals who believe they have been victims of mail, 
television, Internet, telemarketing, or robocall fraud in the 
Consumer Sentinel Network. These complaints would be made 
immediately available to Federal, State, and local law 
enforcement authorities. In so doing, the Commission, acting 
through the advisory office, would be required to consult with 
the Attorney General to provide specific and general 
information on fraud schemes to individuals and law enforcement 
agencies.
    This section would clarify, however, that the Commission, 
through the advisory office, may implement the consumer 
education program and complaint procedures described in this 
section without the approval of the officials and agencies with 
which it is required to consult.
    The Commission would have 1 year after the date of 
enactment to commence carrying out the bill's requirements.

                        CHANGES IN EXISTING LAW

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee states that the 
bill as reported would make no change to existing law.

                                  [all]