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tv   Hearing on Fraud Against Seniors  CSPAN  October 24, 2015 7:09am-8:01am EDT

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>> the chair thanks the gentleman. the chair doesn't want to observe because the question came up on medicare numbers, social security numbers, medicare cards and that was part of the law that was passed in april. my understanding what is watching me, and and the medicare card in the next couple months, did not reflect this by the house and senate. one of those times when they work as intended. if there were no further members for the first panel, i want to thank our witnesses for being here today. this will include the first and when we will take a two minute
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recess to set up for the second panel. >> welcome back. we follow the same format as the first panel, each witness will be given five minute for an opening statement, for the second panel we welcome the following witnesses, professional charles wallace, program director for computer science at michigan technical university and the senior editor
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for consumer reports. >> the subcommittee, the discreet math course get the day off. charles wallace, associate professor of computer science at michigan university. the research focused university located in the upper peninsula of michigan with an emphasis on technology, engineering and scientific degree programs. for the past four years, and on going out reach programs in conjunction with local public library. the elderly residents of rural community and digital literacy skills, to the realities faced by a non natives. through our experiences we have
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identified recurring themes, the current hearing is anxiety versus exploration. and grounding in this new technology senior patrons alternate between trust and paralyzing suspicion neither of which leads to a comfortable productive use. our program addresses this problem by providing a safe place for learning among peers, interaction with mentors to model opprobrious use and develop a healthy balance between caution and exploration. residents over age 65 constitute 15% of the population of our rural area. because of a larger number of elders without family support many of whom -- there is a strong need to help with digital literacy in this community. the experience of using a computing device is well known to calm anxiety in elders and our experience bears this out. many mariners are fearful of
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going online because of stories of fraud and identity theft and experience with relatives and friends. without a basis of understanding for malware and other threats they have no model how to minimize their threat level. anything could be a threat. so many fear using a computer all together. one unfortunate consequence of this anxiety is a lot of things are to explore. for newcomers to a software product or service this is the final form of learning, exploration. to complicate matters further, in practice it is often far from clear whether user is a true criminal or aggressive business pushing a product. for example, mitch, 60-year-old recreational computer user runs a small service based local business, a company hundreds of dollars because they convinced and after many hours on the phone that his business needed to be on prioritize surge lists, however he did not know what the
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service was or how it helped his business, how he could access accounts with the service or where he would see the effect of the service. after several months as a participant in library help sessions described his experience. tutors determined after a lot of exploring, what the service does, and explained what he paid for. is business as no online presence and being a local business being searchable does not help him. in this case mitch was not a victim of fraud or theft strictly speaking but the legitimate business to help without understanding the service he was paying for. is clear that basically receive and secure online behavior is essential weapon in fighting fraud. we believe online library served as an effective learning model, safe place for learning, asking questions, gaining strength from seeing piers in the same
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position. personal contact with mentors who can model appropriate behavior and attitudes, development of healthy online behavior, finding a balance that keeps seniors save without stifling their creativity and productive energy. breaking digital barriers, developing technological approach to help other learners with strategies for navigating the internet. this approach involves small interactive group learning activities along with software tools to help them with navigation. over the next two years breaking digital barriers will help similar learning programs around michigan through the rest of michigan. more information can be found at breaking digital barriers website, thank you. >> thank the gentleman, you are
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recognized for five minutes with questions please. >> committee members, thank you for inviting me to speak. i am as senior editor at consumer reports and i represent advocacy on consumer unions. you may wonder why consumer reports which is better known for rating products would highlight elder scams. retirement security is at its core consumer issue. people have a right to expect that their hard-earned savings will protect them. when i was asked to testify was a bit nervous but then i thought about and 86-year-old great-grandmother from harvey, north carolina 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, seniors and a sweepstakes scams.
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etna herself lost $300,000 in life savings. most seniors would not be willing to talk but she was angry and wanted her money back so in spite of being nervous and scared she spoke out. sadly her money may never be returned but she helped convict a really bad guy. etna was one of eight victims who spoke to me for recent article on elder scams that appeared in consumer reports. i am truly grateful for the willingness to have their names and portraits published. so others might be scared. most elder fraud cases go unreported. victims are embarrassed and ashamed. among other things they are scared that if they tell, people will think their unsophisticated or stupid or losing their cognitive abilities, but honestly these scams victimize anyone. criminals catch people off guard, they sound very
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convincing, they required the victims to make very quick decisions and insist on secrecy. this is their job. they do all day long. the scanners no seniors in part because they are proud and want to retain dignity often keep quiet. so we don't hear about these crimes as often as we should. they run the gamut from sketchy phone and mail solicitation, shady contractors to dishonest financial advisers. we need to document some better. seniors need to feel safe about speaking about their victimization and getting help. they are concerned about losing independence if they admit they have been taken and avoid getting caught in the first place. there are measures that preserve the dignity and independence. there is a web based service
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identifies any unusual in a seniors account and send 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 so the senior can retain control. of course consumer reports recommends finding out for the federal do not call registry and direct marketing association's mail preference service to reduce unwanted calls and mail. we tested and recommended card blocking machines that block robot calls that can be the basis of phone scams. notably we found a free robot call blocking service that is very effective but it is not available on traditional landlines which is what seniors often have. there is no reason tools to block unwanted calls can't be made available on land lines but the three top land line providers don't offer them so consumers union has an end robot calls campaign that has gathered more than half a million
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petition signatures. we are soon going to deliver it to the phone companies to demand free, more effective tools be offered. these developments can help with older scams but must be supplemented by communication and education. elder financial exploitation needs to be part of the national conversation. we published articles about it, other publications have. i would love to see a hollywood movie on this. heroic investigators and victims, piles of money and even some exotic locations. thankfully some seniors are willing to speak out. there is an acting troupe los angeles called the stop senior scams acting program. the actors are all seniors, the oldest is 97. they write skits, dramatize m's, perform them in senior centers and other locations lose some of the actors themselves and been scam victims so they can speak from experience. after performances audience members of come up to them to
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report that they too have been scam. these people might not be willing to tell their own families that they will tell their peers. there is no dearth of creativity, initiative and will to make a dent in this corrected crime. seniors need to feel it is safe to talk about it with law-enforcement years and families. as one said, don't keep a secret. you are not the only one. thank you. >> thank you. i thank both of you for your testimony. we will move to the question portion of the hearing, began questioning on this side. i will yield to mr. harper five minutes on this. >> thanks to you both for being here and great stories, and i know your class is excited today, probably watching as we speak so we wish them well. just in case they are a verbage you have obviously spent a significant amount of time
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putting together the secrets and scams piece for consumer reports, what was the most shocking thing when you were researching the article? >> the most shocking thing is it really is so rampant, it seems everywhere every person attend to in the older justice community and productive services when i would call and say i am doing this, i would say thank you, we need to have this publicized, is everywhere. in my own family with my husband and i together we can think of four instances of various elder abuse situations. it was very hard to get eight people to talk with me. it took a lot of effort. i am very grateful for their bravery because people are afraid to talk so the conversation needs to change to not being afraid. >> it is social humiliating for them to share that. they would rather suffer in silence. it takes a lot of courage to do
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that. dealing in the last year with the gentleman senior who fell for one of the stems sending money and you will get a lot of money back, thinking this will help me pay for my adult kids, graduate school, take care of my wife and we said don't do it and he did it anyway and kept doing it to the tune of most of his savings even though his wife -- i don't know yet that he has grasped what he has done. is a difficult thing because when you have people the can't really control that and fall prey to that and they don't have someone over seeing it is very difficult. in your article you talk about some of the great senior lead initiatives to educate their peers about the fraud risk. have you seen any similar initiatives to educate care givers?
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what experience with the care giver is did you have in your research? >> the program they talked about with booklets, several booklets to educate caregivers and people who have fiduciary duty overseen year's accounts, those are helpful, pretty new, they are being promulgated in different states so i think that is very helpful but caregivers need more education, that is something we could start to do in our publication. clear the, i spoke with one woman, the same thing, her father and mother were involved in the scam but she did not know how to stop from. so widespread education can be very useful. some times, i found a victim services special victims specialist from the fbi in los
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angeles, people come to her when they have relatives who are repeat scam victims and these are often the toughest because they developed an emotional relationship with this camera and really trust them and this woman from the fbi tells people call me. if somebody calls you, you call me and i will walk you through this. i will keep you from getting scam again and sometimes it requires hand in hand cooperation. >> you will see if they get into it. they will send a few thousand dollars. all of a sudden, i am in this far, it is heartbreaking. thanks for your work done that. really do appreciate it. professor wallace, you talking attested money about how you have seen a lot of anxiety about using technology and very naive
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trust about technology that posed risks for consumers and things were constantly moving. my adult daughter, i know we are on the record here, has quit using facebook once my wife, her mom started getting -- you see all these -- >> facebook is for old people. >> there you go. we are seeing this transition. so what are the most effective methods you have found to teach seniors could they can be saved on line without thinking they're going to break their device, or trusting everything will pop up that comes through on the screen? >> it is a tough problem. one thing that helps a lot is being among peers and realizing they are not alone and other newcomers to the technology are struggling with the same kinds of issue is. what exercise have you done that
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his been pretty effective, considering what they do with physical postal mail that they get that looks suspicious? has a certain smell to it. you get something in the mail and look at it, going to throw this in the wastebasket. >> my time is long over. i will yield back and hopefully finish up. >> the chair thanks the gentleman, the chair recognizes the gentlelady from illinois, five minutes for questions. >> during our first panel we talked about shame and we talked about it again in this panel. i am 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
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older people to repeatedly withdraw large amounts of money and presumably when that was out of order for that particular person, actually did nothing to investigate whether fraud was involved, or 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 except there are banks that are making it part of their companywide efforts such as wells fargo where they're educating everybody to be a reporter, not every state has the same law in terms of who is supposed to be damage has to report when they think elder
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fraud is happening. it varies from state to state. but there are companies that are taking upon themselves to do this and i think i can speak in great detail about what the bankers association is doing but there are some banks saying if you think there's something going on you need to speak up right away. certainly more education at all levels, the teller is often the person that sees her the senior taking out the money and it is a fine line between letting them have control over it their money and putting up a red flag. we think it is a good idea for family members to have a relationship with the local bank, seniors go to local branches, they don't -- don't know how much they're doing they're banking on line as opposed to other population groups but often seen years ago to the bank if they're taking a large amount of money, go to the teller so it is a good idea for
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the families to have a relationship with the bank ceo of this can be -- >> i have a feeling of the woman who was trying to help her son in peru, needing help, if the teller would have said you are taking a lot of money, it she might have shared that story, my grandson is in trouble and i am trying to help him. it just seems like those kinds of conversations -- i don't know how one enforces that. one question for you and professor wallace, i think some people think these might be small scam operations, but you point out that some of these are fairly big-time operators. i wonder if you could talk about that a little bit. >> we looked at something called but jamaican lottery scam which
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you may have heard about. it operates not just out of jamaica but other foreign countries as well, costa rica, israel, canada, this is where elderly people are called, they have bought list they have collected. it may be because somebody has responded to something in the mail ends a isn't something that, name, phone number or money because they think they will be receiving something and these lists are created and the scanner's get ahold of these lists and they know this is someone who has already responded wants to a mailing and so then they will call these seniors and they are very organized, they know how to get seniors in motion, and they know how to draw the senior in its use threats envy's gone for months and months, people lose hundreds of thousands of dollars
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so they're very organized. >> mr. wallace, your testimony mentioned breaking the digital barriers program at michigan tech that could serve as a national model. what are the common themes you observed in seniors that have taken the course and this will be reflective of seniors nationwide. >> the anxiety and fear of adopting the technology is a profound one and we need to balance this concern about fraud which is absolutely legitimate with something that encourages them to explore in a safe way so finding that balance is really a key issue for us and we struggle with it but we are looking for metaphors and weighs to relate
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to their life offline. to be sensible and safe and secure in your regular life, can you transfer those skills over to the digital world? that is one of these things -- >> 35 -- vote pure research center, 35% of americans age 65 and older currently use social media, up to 7% in 2014. more people, and in 2014, pew reported 59% of this age group using the internet with 71% going on daily so we are seeing more and more seniors. >> especially in our area is vital for them to go on line because of many of their family members live far away now. it is a tremendous asset
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fordham. really lifeline silly is important for them to adopt this technology. >> thank you, i yield back. >> the gentlelady yields back. recognizes mr. mullen of the oklahoma. >> thank you, mr. chairman. thank you both for being here. professor wallace, what gave you the idea to start this up? just taking a look at you i am very impressed, not by your looks, i am very impressed by the idea that you would take this initiative? was the stricken by you, by your students? what made you think of this? >> one driving force, is the type of material that i teach to our students involves understanding users of the technology they're developing. students are developing the software the we are all going to
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be using in a few years, and i want them to understand what regular people are like, certainly people who don't have that kind of deep understanding of the technologies it they do. very often what happens is software people will develop software for other software people so we need to have a broader view of what the user base is going to be like. one thing i want to insert here, i got a message from one of my colleagues in breaking digital barriers, this is not exclusively a senior problem. digital isn't the -- liberty is a concern across age groups. we worked with people who are young. and i am so by definition they are not old, whose struggle with the technology and in general, this is a larger issue
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the impact seniors greatly but also need to keep in mind is broader. of broader issue. >> thank you for seeing the need. i am assuming once you start down this path it became a passion because the amount of work you have put in wasn't just a class project. did you get personally involved in it to some degree surprisingly? >> yes. it is fair to say everyone who has participated, students, faculty really take a personal interest and is the kind of work that is so much fun that it doesn't feel like work. apart from learning that goes on in our sessions, is also a social session. it is a way for generations to meet and work together in a productive way.
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>> so thank you. mr stinger, same question applies to you. this wasn't exactly your background, you went down this path and one door opened another and it is almost a passionate 5 seeing that right. did something lead you down this road? >> i would say is my passion but i am a personal finance better, at consumer reports. this is the second piece we have written. two years ago we wrote more about scams, fraud committed by family members and seniors, this is more about scams by strangers but i feel very strongly, consumer reports and consumer union retirement security is important to us. i write on retirement issues so i am very interested but you can't help when you speak to
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these seniors, you have to get drawn in because it is heartbreaking. there is a much weened. >> if you could pick two things you would like to see. maybe there has to be required personal interaction, something signed before you could do it. what would you give this hearing, two suggestions to say work on this? >> i think this stop senior scams group was impressive. the only one i know of in that country and i don't think it is particularly difficult to fund a little theater group in all communities in the country where there they could be communicating, senior to senior, gets the actor is an selves out of the house, isolation is a major part of this, getting
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people how, getting people into the community to talk to each other is important endeavors that communication. dealing on a grass roots level and make a difference and i think that was reflected in many of the statements. what else? supporting low work of the ftc doing wonderful work, pass it on is useful, grassroots effort and that cftc's collection, specifically collection of anecdotes is very helpful. they don't always know what the age is, they don't collect the ages of all the people who report but these people are reporting problems with reverse mortgages, a the more we can't get an anecdote that helps me as
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a reporter and it helps the collection of data. we need more data. >> thank you for the work you do. i yield back. >> the gentleman yields back, chair recognizes the gentlelady from indiana. >> professor wallace, i was at heidi tech community college as senior administrator. i was there during the recession from 2007-11. i must say community college exploded enrollment during that time because so many people have gotten way off of their jobs of all ages but particularly those who were 40, 50 years old who got laid off needed to come back to college because they had no digital literacy skills and they couldn't apply for jobs online because the digital's literacy or illiteracy. i am very pleased you are doing
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this. how would you encourage other schools? how much are you talking about this, this is a nice platform for you to publicize but of all other communities, are taking up your baton and doing what you are doing or are you a unique program in the country? i am not familiar with the various programs and what are the strategies you are using that our action will be teaching seniors? >> we are certainly not unique, there are several other efforts in this regard. i want to include senior net cyberseniors, generations on line, lot of groups that doing similar kind of work. >> did they going to the communities like you were doing or are they more online educational tools? >> a variety of approaches.
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working one on one. i don't want to claim we are the only ones doing this kind of work. this is a tremendous platform to raise awareness. i was invited to the white house conference on aging over the summer which gave me a platform to speak out about this and wind in the state of michigan there has been a tremendous amount of interest that has come up from that so we are working with other universities. i feel it is a very easy model to implement. what we are doing now is codifying what we do at michigan tech so we can distribute that to others, give them a leg up on the whole process. >> what are some strategies that
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you found worked best? >> having tudor's matter--monitor their behavior and speak out loud about it is an important piece of it. having an experienced computer user looking at what is on the screen, and working out what is going on, saying it out loud is an important piece, to articulate that this is the process like working with any other aspect of life, you have to weigh the pros and cons, junk mail in the mailbox, brings it back to familiar territory which
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is useful. this is not something entirely new. it is different and we have to use it but is not entirely -- i want to say we are both in solidarity on this issue. education in this regard is extremely effective and low-cost way of addressing this problem of fraud on line. a long way to stem the problems with good amounts of time and effort to secure a later. >> i know we focus on education of the children getting on line but we don't spend nearly enough time educating seniors. every time i go home to visit my parents at consumer reports is front and center but i do want to ask you, are there enough in your research available and accessible tools for seniors to
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report. are there enough tools? do they know what they are? >> there are plenty of tools, people can report, aarp is involved, the financial fraud enforcement task force, we stopped fraud where you can report on the senate side, the special commission on aging hot lines, and tell you where to go for help. j. lo first person they report to his police first, local law enforcement. there could be more training with local law enforcement. i spoke with local prosecutors,
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and they have to be trained. training local police spot elder abuse, not just financial abuse. at the local level, people doing the reporting. in large communities, there are taskforces. in seattle, san diego, different groups have come together and created a public face and that can help. in san diego this fellow named paul greenwould do is the assistant district attorney, he is very well-known. one of the people we profile was involved in this scam.
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he got caught, he sent money in the scam and then fought better of it and told a friend and a friend went to paul greenwood's office and working with wells fargo he was able to stop the payment he was making to a scanner so it can work if people not always but can work sometimes if people report it quickly and nowhere to go. on the local level i am not sure that always happens. >> thanks for your efforts in protecting seniors. i yield back. >> the chair recognizes the gentleman from kentucky for questions. >> a lot of us prepare the same questions, very similar, what the biggest take aways from seniors, in your article, what do you think, was there a common thread? isolation, people isolated, when the phone rings they answer the
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phone and engage in conversation but is there something in common, several things that were common? >> one common thread, many of them, they were acting because they wanted to provide for children or grandchildren, they thought this would be great, i am getting these winnings and it could help me, father ortiz who we profile, he was hoping to get the money and use it to fund the school. scanners note this. they know how to just push those emotional buttons and that is what is sad. and not older people who are scam to, i have been told, it seems to be true from my research, they get scams bigger amounts of money, younger people
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are more likely to report and they don't go as far, but in general it is because they trusted these scanners at some >> i have a friend that had an older brother that was being scammed and he was someone that you couldn't get to stop. and have you seen that with some
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of the other family members saying don't do this? >> yeah, i think that that's part of it. >> that is right. >> unfortunately some of the worst cases develop a relationship with a scammer and relatives are saying that you cannot do this and no, and they trust the scammer more than they trust the adult child. i mean, i'm at a loss to know what to say except that if a senior can be told that they can be shown some of the things that do not make sense, maybe they will start to realize that oh, this web address doesn't seem
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right. and some of these things the seniors may not think about that somebody younger knows about it. you know, it says that you have a problem with your computer, click here. a lot of younger people are like oh, no, i am not going there. but somebody not as familiar is not going to know. the victim is specialist said that she actually wrote down something like a script so that when somebody called they would know what to say. it required real preparation and it's almost an addiction for some. >> i know that some questions
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were asked. there are several questions. like what trends do you see or are some sessions more popular than others. >> certainly a trending to mobile devices as we have a greater variety coming in, which makes it harder for us to keep track of this and so it takes a little while to learn. and that is the one thing that we try to get it across to the learners is that we sort of have ways approaching something new. so it could be a new website or service of some kind and so we have ways of looking at it, checking it out, making sure it is legitimate.
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so there is certainly a greater diversity in both in terms of physical devices and in terms of the services that people are using them so that means that we have to teach them a more agile way of approaching the technology. we cannot just keep using the gmail in its current form because a lot is going to change so we need to teach them these deeper skills and that includes what kind of approach is to use to ensure that this is something legitimate. we tried to transfer them over to the digital world. >> thank you, and i appreciate
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you guys doing this. >> the chair thanks the gentleman and we recognize him for five minutes for questions and it looks like we've got enough time to conclude this and adjourned the subcommittee before we go to record the votes. so i would like to know what kind of response we have had with consumer reports. >> people in the justice community, people that deal with this, moyers and people, they are happy that it's out there because they believe that it gets the word out. people call this group to
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congratulate them and maybe they will work together, that would be great. i do not know what the readers are saying but we hope that having it on the cover of a national magazine will get people to think more about it in their own lives. >> it certainly drives the interest factor. he may have noticed that you have arrived in the digital freestone which is ironic because we are the principal committee in the united states house of representatives and they provide us with a pad of paper and a pencil. in the health care space we have surveillance where it could be
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an early tipoff. is there anyway to use that kind of surveillance in your world where there is an increased level of scamming activity. they used to call them pigeon drops where they would come down and take advantage of people. is there any way that you have of getting tipped off that there is an uptick in this type of activity? >> i do not know of any idea in that regard. if it doesn't exist right now i think it is a great idea. >> i did not know about the
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little scratch off my cards and i didn't even know you could do that. and so i don't know if there's any way of watching that kind of activity. >> i understand the that we don't have that particular capability anymore and so i think they are trying to eliminate. but the scammers come up with new things. the iphone cards. >> apple pay. >> something is being used. they figure it out. >> they are much more fast file in the u.s. congress. >> there is also the isolation factor that is used in almost
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monetized to take advantage of people. it's hard to know how to overcome that except that making families aware that that is a risk factor in the population is ironic. >> the isolation is something that really motivates the computer use and in our case a lot of people do not have relatives nearby. so great way to communicate is through social media and so on. but a lot of people don't have feedback about it, but hopefully we will provide service. we are working with mentors who have a help. >> a general word to families to be on the lookout we do have a family member who is perhaps at
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risk for being targeted by this type of activity. i just have to ask you one last question but facebook, you reference it was for old people. what is up with that? >> i am just echoing the sentiment of my children did say that young people don't use it anymore. >> they will tell me. >> it is in development. all right. and i'm going to yield back the balance of my time and seeing that there are no further members wishing to ask questions, i want to thank the witnesses for being here today. before we conclude i like to submit the following documents for the record. a story in the upcoming issue of consumer reports magazine and i remind members that they have 10 business days to submit additional questions for the
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record within this with receipt of sub questions. >> very good. thank you.

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