Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC Consumer Protection Official Testifies to Congress on Consumer Fraud Against Seniors, (May 17, 2013)

By Tobias J. Gillett, J.D., LL.M.

Acting Director Charles Harwood of the FTC’s Bureau of Consumer Protection testified yesterday before the House Energy and Commerce Committee Subcommittee on Commerce, Manufacturing, and Trade regarding consumer protection issues facing older Americans and the FTC’s efforts to combat the threats posed.

Harwood stated that older Americans “are not necessarily defrauded at greater rates than younger consumers,” but that certain types of fraud are particularly likely to affect them. Some of the current threats include “(1) sweepstakes, prize promotions, and lotteries; (2) timeshare sales and resales; (3) medical alert devices; (4) investments; (5) discount medical and prescription services; (6) business opportunity or work-from-home programs; (7) bogus advance fee loans; and (8) charitable donations.”

Harwood highlighted two forms of fraud, work from home scams and prize promotion and lottery scams, noting the FTC’s recent action against an “illusory” work from home program called Real Wealth, Inc. that targeted older Americans. The action resulted in a $10.4 million judgment against Real Wealth and its owner.

With respect to prize promotion and lottery scams, Harwood observed that the FTC Bureau of Economics’ recent survey of Consumer Fraud in the United States found older consumers were considerably more likely to be targeted by that kind of fraud. He emphasized the Commission’s efforts to cut off funds to operations conducting that fraud by targeting money transfer services the operations use and the Commission’s partnership with the AARP Foundation under which the FTC would refer some consumers over the age of 60 who had encountered certain types of fraud to the Foundation for individual peer counseling.

The FTC has also pursued efforts to combat identity theft, with particular attention paid to its effect on older consumers. Harwood cited the FTC’s May 7 workshop on identity theft affecting seniors, at which the FTC collected information about the issue and discussed best practices for educating older consumers and their families.

Harwood noted that demographic and other trends would likely affect the kinds of fraud affecting older Americans. He stated that the Affordable Care Act would likely lead to an increase in healthcare fraud, as scammers capitalize on confusion about its provisions. In addition, the rapid increase in the number of Americans over the age of 65 could lead to an increase in Internet fraud against older consumers.

Finally, Harwood emphasized the FTC’s consumer education and outreach to seniors. He noted that the agency has produced a wide range of print, video, audio, and online materials to educate older Americans and their caregivers about various threats, and that the FTC is in the process of creating an outreach campaign focused on delivering consumer awareness tips to mid-life and older Americans.

News: ConsumerProtection FederalTradeCommissionNews