SJC on Senior Financial Exploitation
Senate Judiciary Committee
“Protecting Older Americans from Financial Exploitation”
Wednesday, June 29, 2016
Key Topics & Takeaways
- Senior$afe Act: Sen. Franken (D-MN) praised the Senior$afe Act of 2015, which would ensure that financial institutions are able to disclose senior financial exploitation suspected in good faith to certain agencies, as a strong step forward, and sought support from the other panelists. Joseph Marquart, Nancy Shaffer and Donna K. Harvey lauded the Act and believed it was important that financial professionals be empowered to prevent senior financial exploitation.
- Mandatory Reporting: There was a discussion, using Connecticut and Iowa as examples, of the use of mandatory versus voluntary reporters of senior financial exploitation.
- Education and Training: All committee members and panelists touched on the need for greater consumer education on senior financial exploitation and better training for law enforcement, prosecutors and financial professionals to detect, prevent and prosecute fraud, as well as improved data collection related to senior financial abuse.
Witnesses
- John A. Horn, U.S. Attorney, Northern District of Georgia, U.S. Department of Justice
- Lois C. Greisman, Associate Director, Division of Marketing Practices, Bureau of Consumer Protection, U.S. Federal Trade Commission
- Joseph Marquart, Member, AARP Iowa Executive Council, AARP Fraud Watch Network Volunteer
- Nancy Shaffer, Long-Term Care Ombudsman, State of Connecticut
- Donna K. Harvey, Director, Iowa Department on Aging
Opening Statements
Senator Chuck Grassley, Committee Chairman
In his opening statement, Senator Chuck Grassley (R-IA) remarked on the tremendous scope of financial elder exploitation, and pointed out that there are important gaps in knowledge that make it hard to confront this issue. He emphasized the importance of having a comprehensive understanding of the nature of the problem, to allow for effective countermeasures. He summarized a number of common scams and highlighted that many crimes are committed by family members or people in a position of trust, and emphasized the physical and emotional damage caused by financial exploitation.
Grassley strongly emphasized the need to educate and train seniors, as well as law enforcement, prosecutors, and other key parties. He stated that he was disappointed in current Department of Justice (DOJ) data collection and called for improvement. He also announced legislation that he is working on with Senator Richard Blumenthal (D-CT), which would improve data collection, toughen penalties, increase training, and promote interagency cooperation in the senior financial exploitation space.
Senator Richard Blumenthal, Ranking Member
In his opening statement, Ranking Member Blumenthal (D-CT) argued that senior financial exploitation often takes place quietly over a long period of time, and is not adequately reported in the news. He said that a growing proportion of this crime is conducted by international criminal syndicates and echoed Grassley, stating that senior financial exploitation is ultimately an issue of quality of life.
Blumenthal then described a financial exploitation case and referred to legislation he had previously introduced that sought to provide seniors with “the right legal assistance at the right time.” He argued that enhancing the legal response and educating consumers were top priorities. In closing, he noted Connecticut’s new mandate on financial agents to receive training to detect exploitation.
Panel 1 Testimony
John A. Horn, U.S. Attorney, Northern District of Georgia, U.S. Department of Justice
In his testimony, U.S. Attorney John A. Horn reported that the DOJ had established an Elder Justice Working Group this year to coordinate among U.S. Attorney offices and with other federal, state and local officials. He described the three levels at which the DOJ combats senior financial exploitation: 1) cooperation with international law enforcement to target fraud networks; 2) cooperation with state and local officials; and 3) within individual U.S. Attorney’s offices, as many economic crimes prosecuted by U.S. Attorneys around the country involve senior victims.
In her testimony, Greisman presented a video with testimony from a financial exploitation victim and said that there were two core components to the FTC’s efforts: law enforcement and consumer education. Greisman noted that targeting transfer services used in scams, such as MoneyGram and Western Union had been a productive avenue for the FTC. She also described collaboration with law enforcement agencies worldwide and highlighted the FTC’s “Pass it On” program.
Question & Answer
Enforcement Challenges
Detection and “Real-Time” Prevention
Senator Thom Tillis (R-NC) asked if there was any work being done to establish “real-time” fraud monitoring systems akin to credit card fraud protections. Greisman noted that many exploitative transactions use cash, but that the FTC is working on “real-time prevention” by reaching out to retailers and similar industries. She also reported on an FTC consumer complaint database received, which can be used by law enforcement. Horn reported that the Georgia U.S. Attorney’s Office had been meeting with companies that process credit card transactions, and Tillis expressed his desire to reach out to the financial services community to find more effective ways to prevent fraudulent transactions before they occur, and highlighted the importance of “working with industry in a lean way.”
Possible Legislative Measures
Tillis asked if there were any legislative measures that could provide a stronger legal framework for the prevention and prosecution of these crimes. Horn referred Tillis to DOJ’s legislative affairs office, and pointed out a number of criminal conspiracy and enterprise statutes can be brought to bear on larger scams. Greisman asserted that, on large-scale scams, the FTC was looking to break into the chain anywhere it can, and that it has taken various civil actions against entities along strategic points.
Data Concerns
Grassley asked why the DOJ did not currently collect large scale data on elder financial abuse. Horn asserted that such data would be useful, but that the DOJ’s current system is “statute based,” and lumps senior financial exploitation in with other crimes. He assured the Committee that the Department would be looking at improving its data collection. Grassley then asked whether the Department had been able to use data collected by others, specifically States. Horn noted that the FTC database had been useful.
Education and Prevention
Senator Amy Klobuchar (D-MN) described her past efforts to ensure the accountability of guardian conservators, and asked how this helped prevent senior financial exploitation. Horn maintained that “anything to enhance service provider integrity” was good, and that that “access sometimes creates irresistible risk” for some guardians. Klobuchar asked about the importance of federal education efforts and Greisman pointed to the success of “Pass it On” and FTC conferences, workshops and webinars.
Restitution and Victim Compensation
In response to questions about restitution and victim compensation, Horn described how his office had worked with the National Center for Victims of Crime and employed several full-time attorneys whose job was to generally retrieve property as restitution for victims of crime, including senior victims.
Panel 2 Testimony
Joseph Marquart, Member, AARP Iowa Executive Council, Fraud Watch Network Volunteer
Joseph Marquart testified that he was there on behalf of Carla Seibert, an individual whose mother had been taken advantage of by a telemarketing scam and shared her story. Marquart added that AARP often hears similar stories, and holds workshops to teach people how to prevent exploitation.
Nancy Shaffer, Long-Term Care Ombudsman, State of Connecticut
In her testimony, Shaffer described the importance of tackling this issue because of its cost on society, and emphasized the importance of strong advocacy services for people in nursing homes. She highlighted power of attorney abuse and abuse by those in the business office of nursing homes as particular examples, and praised steps taken to combat senior financial exploitation in Connecticut, such as the creation of a Coalition Against Elder Abuse and mandated training in financial institutions.
Donna K. Harvey, Director, Iowa Department on Aging
In her testimony, Donna Harvey described three scenarios in which older Iowans had been scammed, and noted that it can take a series of coordinated interventions by an entire community to convince seniors that they are scam victims. Harvey noted several measures Iowa was taking to prevent financial exploitation and that the state had solicited suggestions from the senior community. She reported that the survey had revealed two general preferences for education: a toll free, anonymous hotline to discuss their questions and television commercials. She also emphasized the strong correlation between exploitation and social isolation, regardless geographic area.
Question & Answer
Challenges
Shaffer and Marquart stated that early detection and prevention was the most significant issue from their perspectives. Harvey cited a lack of education among law enforcement and judges, and a lack of coordination and collaboration between agencies working on this issue.
Senior$afe Act
Grassley said that he had met with groups from the financial services industry who asked for legal protections when reporting suspicious transactions. Senator Al Franken (D-MN) explained that the bill in question was the Senior$afe Act, praised the act, and asked for support from the other senators and comments from the panel. Both Harvey and Shaffer agreed that the Senior$afe Act was a positive step.
Criminal Action Against Perpetrators
Blumenthal said that seniors are often given discretion as to whether criminal action should be taken, and that this was a difficult decision. Shaffer agreed and said that better training and sensitivity on the part of law enforcement and prosecutors would be helpful.
Definition of Financial Exploitation
Blumenthal asked about the difficulty in creating a comprehensive definition of “financial exploitation.” Shaffer said that “undue influence” is an important but nebulous concept, and that prosecutors need parameters to make these cases. Harvey urged discussion on the most critical aspects of the definition.
Mandatory Reporting
Shaffer again highlighted the expansion of mandatory reporting in Connecticut – which included employees of financial institutions. Harvey noted that, in Iowa, medical and senior services professionals were mandatory reporters, but employees of financial institutions were not. Blumenthal praised Iowa’s system of mandatory training for utility workers, who are voluntary reporters, to detect abuse.
State and Federal Collaboration
Grassley asked the panel how well the federal government was collaborating with States and state agencies, and Harvey stated that collaboration needed to be improved.
For more information on this hearing, please click here.
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Senate Judiciary Committee
“Protecting Older Americans from Financial Exploitation”
Wednesday, June 29, 2016
Key Topics & Takeaways
- Senior$afe Act: Sen. Franken (D-MN) praised the Senior$afe Act of 2015, which would ensure that financial institutions are able to disclose senior financial exploitation suspected in good faith to certain agencies, as a strong step forward, and sought support from the other panelists. Joseph Marquart, Nancy Shaffer and Donna K. Harvey lauded the Act and believed it was important that financial professionals be empowered to prevent senior financial exploitation.
- Mandatory Reporting: There was a discussion, using Connecticut and Iowa as examples, of the use of mandatory versus voluntary reporters of senior financial exploitation.
- Education and Training: All committee members and panelists touched on the need for greater consumer education on senior financial exploitation and better training for law enforcement, prosecutors and financial professionals to detect, prevent and prosecute fraud, as well as improved data collection related to senior financial abuse.
Witnesses
- John A. Horn, U.S. Attorney, Northern District of Georgia, U.S. Department of Justice
- Lois C. Greisman, Associate Director, Division of Marketing Practices, Bureau of Consumer Protection, U.S. Federal Trade Commission
- Joseph Marquart, Member, AARP Iowa Executive Council, AARP Fraud Watch Network Volunteer
- Nancy Shaffer, Long-Term Care Ombudsman, State of Connecticut
- Donna K. Harvey, Director, Iowa Department on Aging
Opening Statements
Senator Chuck Grassley, Committee Chairman
In his opening statement, Senator Chuck Grassley (R-IA) remarked on the tremendous scope of financial elder exploitation, and pointed out that there are important gaps in knowledge that make it hard to confront this issue. He emphasized the importance of having a comprehensive understanding of the nature of the problem, to allow for effective countermeasures. He summarized a number of common scams and highlighted that many crimes are committed by family members or people in a position of trust, and emphasized the physical and emotional damage caused by financial exploitation.
Grassley strongly emphasized the need to educate and train seniors, as well as law enforcement, prosecutors, and other key parties. He stated that he was disappointed in current Department of Justice (DOJ) data collection and called for improvement. He also announced legislation that he is working on with Senator Richard Blumenthal (D-CT), which would improve data collection, toughen penalties, increase training, and promote interagency cooperation in the senior financial exploitation space.
Senator Richard Blumenthal, Ranking Member
In his opening statement, Ranking Member Blumenthal (D-CT) argued that senior financial exploitation often takes place quietly over a long period of time, and is not adequately reported in the news. He said that a growing proportion of this crime is conducted by international criminal syndicates and echoed Grassley, stating that senior financial exploitation is ultimately an issue of quality of life.
Blumenthal then described a financial exploitation case and referred to legislation he had previously introduced that sought to provide seniors with “the right legal assistance at the right time.” He argued that enhancing the legal response and educating consumers were top priorities. In closing, he noted Connecticut’s new mandate on financial agents to receive training to detect exploitation.
Panel 1 Testimony
John A. Horn, U.S. Attorney, Northern District of Georgia, U.S. Department of Justice
In his testimony, U.S. Attorney John A. Horn reported that the DOJ had established an Elder Justice Working Group this year to coordinate among U.S. Attorney offices and with other federal, state and local officials. He described the three levels at which the DOJ combats senior financial exploitation: 1) cooperation with international law enforcement to target fraud networks; 2) cooperation with state and local officials; and 3) within individual U.S. Attorney’s offices, as many economic crimes prosecuted by U.S. Attorneys around the country involve senior victims.
In her testimony, Greisman presented a video with testimony from a financial exploitation victim and said that there were two core components to the FTC’s efforts: law enforcement and consumer education. Greisman noted that targeting transfer services used in scams, such as MoneyGram and Western Union had been a productive avenue for the FTC. She also described collaboration with law enforcement agencies worldwide and highlighted the FTC’s “Pass it On” program.
Question & Answer
Enforcement Challenges
Detection and “Real-Time” Prevention
Senator Thom Tillis (R-NC) asked if there was any work being done to establish “real-time” fraud monitoring systems akin to credit card fraud protections. Greisman noted that many exploitative transactions use cash, but that the FTC is working on “real-time prevention” by reaching out to retailers and similar industries. She also reported on an FTC consumer complaint database received, which can be used by law enforcement. Horn reported that the Georgia U.S. Attorney’s Office had been meeting with companies that process credit card transactions, and Tillis expressed his desire to reach out to the financial services community to find more effective ways to prevent fraudulent transactions before they occur, and highlighted the importance of “working with industry in a lean way.”
Possible Legislative Measures
Tillis asked if there were any legislative measures that could provide a stronger legal framework for the prevention and prosecution of these crimes. Horn referred Tillis to DOJ’s legislative affairs office, and pointed out a number of criminal conspiracy and enterprise statutes can be brought to bear on larger scams. Greisman asserted that, on large-scale scams, the FTC was looking to break into the chain anywhere it can, and that it has taken various civil actions against entities along strategic points.
Data Concerns
Grassley asked why the DOJ did not currently collect large scale data on elder financial abuse. Horn asserted that such data would be useful, but that the DOJ’s current system is “statute based,” and lumps senior financial exploitation in with other crimes. He assured the Committee that the Department would be looking at improving its data collection. Grassley then asked whether the Department had been able to use data collected by others, specifically States. Horn noted that the FTC database had been useful.
Education and Prevention
Senator Amy Klobuchar (D-MN) described her past efforts to ensure the accountability of guardian conservators, and asked how this helped prevent senior financial exploitation. Horn maintained that “anything to enhance service provider integrity” was good, and that that “access sometimes creates irresistible risk” for some guardians. Klobuchar asked about the importance of federal education efforts and Greisman pointed to the success of “Pass it On” and FTC conferences, workshops and webinars.
Restitution and Victim Compensation
In response to questions about restitution and victim compensation, Horn described how his office had worked with the National Center for Victims of Crime and employed several full-time attorneys whose job was to generally retrieve property as restitution for victims of crime, including senior victims.
Panel 2 Testimony
Joseph Marquart, Member, AARP Iowa Executive Council, Fraud Watch Network Volunteer
Joseph Marquart testified that he was there on behalf of Carla Seibert, an individual whose mother had been taken advantage of by a telemarketing scam and shared her story. Marquart added that AARP often hears similar stories, and holds workshops to teach people how to prevent exploitation.
Nancy Shaffer, Long-Term Care Ombudsman, State of Connecticut
In her testimony, Shaffer described the importance of tackling this issue because of its cost on society, and emphasized the importance of strong advocacy services for people in nursing homes. She highlighted power of attorney abuse and abuse by those in the business office of nursing homes as particular examples, and praised steps taken to combat senior financial exploitation in Connecticut, such as the creation of a Coalition Against Elder Abuse and mandated training in financial institutions.
Donna K. Harvey, Director, Iowa Department on Aging
In her testimony, Donna Harvey described three scenarios in which older Iowans had been scammed, and noted that it can take a series of coordinated interventions by an entire community to convince seniors that they are scam victims. Harvey noted several measures Iowa was taking to prevent financial exploitation and that the state had solicited suggestions from the senior community. She reported that the survey had revealed two general preferences for education: a toll free, anonymous hotline to discuss their questions and television commercials. She also emphasized the strong correlation between exploitation and social isolation, regardless geographic area.
Question & Answer
Challenges
Shaffer and Marquart stated that early detection and prevention was the most significant issue from their perspectives. Harvey cited a lack of education among law enforcement and judges, and a lack of coordination and collaboration between agencies working on this issue.
Senior$afe Act
Grassley said that he had met with groups from the financial services industry who asked for legal protections when reporting suspicious transactions. Senator Al Franken (D-MN) explained that the bill in question was the Senior$afe Act, praised the act, and asked for support from the other senators and comments from the panel. Both Harvey and Shaffer agreed that the Senior$afe Act was a positive step.
Criminal Action Against Perpetrators
Blumenthal said that seniors are often given discretion as to whether criminal action should be taken, and that this was a difficult decision. Shaffer agreed and said that better training and sensitivity on the part of law enforcement and prosecutors would be helpful.
Definition of Financial Exploitation
Blumenthal asked about the difficulty in creating a comprehensive definition of “financial exploitation.” Shaffer said that “undue influence” is an important but nebulous concept, and that prosecutors need parameters to make these cases. Harvey urged discussion on the most critical aspects of the definition.
Mandatory Reporting
Shaffer again highlighted the expansion of mandatory reporting in Connecticut – which included employees of financial institutions. Harvey noted that, in Iowa, medical and senior services professionals were mandatory reporters, but employees of financial institutions were not. Blumenthal praised Iowa’s system of mandatory training for utility workers, who are voluntary reporters, to detect abuse.
State and Federal Collaboration
Grassley asked the panel how well the federal government was collaborating with States and state agencies, and Harvey stated that collaboration needed to be improved.
For more information on this hearing, please click here.