Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC testifies on efforts to fight phone scams targeting the elderly, (Jul 16, 2014)

By Linda O’Brien, J.D., LL.M.

In testimony before the Senate Special Committee on Aging today, the FTC provided an overview of its efforts to fight telephone scams that target seniors, with a particular focus on imposter scams.

Testifying on behalf of the Commission, Lois Greisman, Associate Director of the FTC Division of Marketing Practices, began her prepared statement at the hearing on “Hanging Up on Phone Scams: Progress and Potential Solution to this Scourge” by describing the agency’s work to fight telephone scams that harm millions of Americans, especially grandparent and other imposter scams where callers trick seniors into sending them money by pretending to be a friend or relative in distress or a representative of a government agency or a well-known company.

The testimony outlined FTC efforts to identify emerging phone scams, as well as the agency’s efforts to educate consumers about these scams and to find technological solutions that will make it more difficult for scammers to operate and hide from law enforcement.

According to the testimony, the FTC has brought more than 130 cases involving telemarketing fraud against more than 800 defendants during the past decade. The agency has obtained judgments of more than $2 billion from the cases that have been resolved. Despite aggressive enforcement, the prevalence of phone scams remains high. The testimony noted that the FTC receives tens of thousands of complaints about illegal phone calls every week, including imposter scams that target seniors. The economic impact of such schemes is severe. Consumers who complained to the FTC of imposter scams reported significant monetary losses, totaling over $223 million.

The FTC works closely with foreign and domestic counterparts to help ensure that the fraudsters are held criminally accountable. Through its Criminal Liaison Unit, the FTC coordinates with criminal law enforcement agencies to combat phone scams, including referring the perpetrators of phone scams to authorities for prosecution, the testimony noted.

The testimony described the FTC’s interagency work, noting that since 2003, hundreds of fraudulent telemarketers have faced criminal charges and prison time as a result of FTC referrals to criminal law enforcement agencies. A U.S.-Canada operation, Project COLT, has led to 10 recent indictments of grandparent scammers, and information provided by the FTC has helped extradite and prosecute phone fraudsters. With the FTC’s assistance, Project COLT has recovered more than $26 million for victims of telemarketing fraud. In addition, the FTC has supported multiple prosecutions through a U.S.-Jamaica law enforcement task force, Project JOLT, including phone scams that targeted seniors and impersonated government agencies to promote fake lottery schemes.

The testimony outlined FTC education and outreach programs that reach tens of millions of people every year. Among them is the recently created “Pass It On” program that provides seniors with information, in English and Spanish, on a variety of scams targeting the elderly. The testimony also noted the agency’s work with the Elder Justice Coordinating Council to help protect seniors, and with the AARP Foundation, whose peer counselors provided fraud-avoidance advice last year to more than a thousand seniors who had filed complaints with the FTC about certain frauds, including lottery, prize promotion, and grandparent scams.

The testimony also described the FTC’s ongoing work to bring about technological changes that will make it more difficult for fraudsters to use the phone to scam consumers and to hide from law enforcement. Among these initiatives are an effort to make it harder for scammers to fake or “spoof” their caller ID information and the more widespread availability of technology that will block calls from fraudsters, essentially operating as a spam filter for the phone.

News: ConsumerProtection FederalTradeCommissionNews