[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]



 
                 SENIOR FINANCIAL EMPOWERMENT ACT OF 2009

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

                                HEARING

                               BEFORE THE

                   SUBCOMMITTEE ON CRIME, TERRORISM,
                         AND HOMELAND SECURITY

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                                   ON

                               H.R. 3040

                               ----------                              

                              MAY 25, 2010

                               ----------                              

                           Serial No. 111-137

                               ----------                              

         Printed for the use of the Committee on the Judiciary


   Available via the World Wide Web: http://judiciary.house.govFOR 
                               SPINE deg.
                SENIOR FINANCIAL EMPOWERMENT ACT OF 2009




                SENIOR FINANCIAL EMPOWERMENT ACT OF 2009

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

                                HEARING

                               BEFORE THE

                   SUBCOMMITTEE ON CRIME, TERRORISM,
                         AND HOMELAND SECURITY

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                                   ON

                               H.R. 3040

                               __________

                              MAY 25, 2010

                               __________

                           Serial No. 111-137

                               __________

         Printed for the use of the Committee on the Judiciary


      Available via the World Wide Web: http://judiciary.house.gov


                  U.S. GOVERNMENT PRINTING OFFICE
56-638                    WASHINGTON : 2010
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                       COMMITTEE ON THE JUDICIARY

                 JOHN CONYERS, Jr., Michigan, Chairman
HOWARD L. BERMAN, California         LAMAR SMITH, Texas
RICK BOUCHER, Virginia               F. JAMES SENSENBRENNER, Jr., 
JERROLD NADLER, New York                 Wisconsin
ROBERT C. ``BOBBY'' SCOTT, Virginia  HOWARD COBLE, North Carolina
MELVIN L. WATT, North Carolina       ELTON GALLEGLY, California
ZOE LOFGREN, California              BOB GOODLATTE, Virginia
SHEILA JACKSON LEE, Texas            DANIEL E. LUNGREN, California
MAXINE WATERS, California            DARRELL E. ISSA, California
WILLIAM D. DELAHUNT, Massachusetts   J. RANDY FORBES, Virginia
STEVE COHEN, Tennessee               STEVE KING, Iowa
HENRY C. ``HANK'' JOHNSON, Jr.,      TRENT FRANKS, Arizona
  Georgia                            LOUIE GOHMERT, Texas
PEDRO PIERLUISI, Puerto Rico         JIM JORDAN, Ohio
MIKE QUIGLEY, Illinois               TED POE, Texas
JUDY CHU, California                 JASON CHAFFETZ, Utah
TED DEUTCH, Florida                  TOM ROONEY, Florida
LUIS V. GUTIERREZ, Illinois          GREGG HARPER, Mississippi
TAMMY BALDWIN, Wisconsin
CHARLES A. GONZALEZ, Texas
ANTHONY D. WEINER, New York
ADAM B. SCHIFF, California
LINDA T. SANCHEZ, California
DANIEL MAFFEI, New York
JARED POLIS, Colorado

            Perry Apelbaum, Staff Director and Chief Counsel
      Sean McLaughlin, Minority Chief of Staff and General Counsel
                                 ------                                

        Subcommittee on Crime, Terrorism, and Homeland Security

             ROBERT C. ``BOBBY'' SCOTT, Virginia, Chairman

PEDRO PIERLUISI, Puerto Rico         LOUIE GOHMERT, Texas
JERROLD NADLER, New York             TED POE, Texas
ZOE LOFGREN, California              BOB GOODLATTE, Virginia
SHEILA JACKSON LEE, Texas            DANIEL E. LUNGREN, California
MAXINE WATERS, California            J. RANDY FORBES, Virginia
STEVE COHEN, Tennessee               TOM ROONEY, Florida
ANTHONY D. WEINER, New York
MIKE QUIGLEY, Illinois
TED DEUTCH, Florida

                      Bobby Vassar, Chief Counsel

                    Caroline Lynch, Minority Counsel


                            C O N T E N T S

                              ----------                              

                              MAY 25, 2010

                                                                   Page

                                THE BILL

H.R. 3040, the ``Senior Financial Empowerment Act of 2009''......    13

                           OPENING STATEMENT

The Honorable Robert C. ``Bobby'' Scott, a Representative in 
  Congress from the State of Virginia, and Chairman, Subcommittee 
  on Crime, Terrorism, and Homeland Security.....................    22

                               WITNESSES

The Honorable Tammy Baldwin, a Representative in Congress from 
  the State of Wisconsin
  Oral Testimony.................................................     1
  Prepared Statement.............................................     4
The Honorable Howard Coble, a Representative in Congress from the 
  State of North Carolina
  Prepared Statement.............................................    11
Mr. W. Lee Hammond, President, AARP, Washington, DC
  Oral Testimony.................................................    30
  Prepared Statement.............................................    32
Mr. Robert B. Blancato, National Coordinator, Elder Justice 
  Coalition, Washington, DC
  Oral Testimony.................................................    37
  Prepared Statement.............................................    39
Ms. Latifa S. Ring, Elder Abuse Victims Advocates, Houston, TX
  Oral Testimony.................................................    42
  Prepared Statement.............................................    45

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Prepared Statement of the Honorable Louie Gohmert, a 
  Representative in Congress from the State of Texas, and Ranking 
  Member, Subcommittee on Crime, Terrorism, and Homeland Security    25

                                APPENDIX

Material Submitted for the Hearing Record........................    69

                        OFFICIAL HEARING RECORD
      Material Submitted for the Hearing Record but not Reprinted

Study entitled ``Broken Trust: Elders, Family, and Finances,'' by the 
    MetLife Mature Market Institute, the National Committee for the 
    Prevention of Elder Abuse, and the Center for Gerontology at 
    Virginia Polytechnic Institute and State University, March 2009; 
    submitted by Robert B. Blancato, National Coordinator, Elder 
    Justice Coalition, Washington, DC. The study is not reprinted in 
    this hearing but is available at the Subcommittee and can also be 
    accessed at:

    http://www.metlife.com/assets/cao/mmi/publications/studies/mmi-
study-broken-
    trust-elders-family-finances.pdf


                   SENIOR FINANCIAL EMPOWERMENT ACT 
                                OF 2009

                              ----------                              


                         TUESDAY, MAY 25, 2010

              House of Representatives,    
              Subcommittee on Crime, Terrorism,    
                              and Homeland Security
                                Committee on the Judiciary,
                                                    Washington, DC.

    The Subcommittee met, pursuant to notice, at 2:35 p.m., in 
room 2237, Rayburn House Office Building, the Honorable Robert 
C. ``Bobby'' Scott (Chairman of the Subcommittee) presiding.
    Present: Representatives Scott, Quigley, Gohmert, Poe, and 
Goodlatte.
    Staff present: Ron LeGrand, Majority Counsel; Kimani 
Little, Minority Counsel; and Kelsey Whitlock, Minority Staff 
Assistant.
    Mr. Scott. I am going to begin with my opening statement. 
We have just had votes called, and once we leave for votes it 
will probably be the better part of a half hour before we can 
get back. And the Ranking Member is apparently on the way.
    The Subcommittee will now come to order, and I am pleased 
to welcome you to today's hearing before the Subcommittee on 
Crime, Terrorism, and Homeland Security.
    And I think it may make sense for me to give my opening 
statement when we come back. Let me go without objection to our 
two witnesses that are here so they won't have to come back.
    We recognize the gentlelady from Wisconsin representing the 
Second District of Wisconsin, home town is Madison, serves on 
two Subcommittees on Energy and Commerce and also sits on the 
Judiciary Committee, and our colleague from North Carolina, Mr. 
Coble, who is a Member of this Committee and also serves on the 
Transportation Committee.
    And so we begin with Ms. Baldwin.

 TESTIMONY OF THE HONORABLE TAMMY BALDWIN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF WISCONSIN

    Ms. Baldwin. Thank you Chairman Scott and Members of the 
Subcommittee for allowing me the opportunity to testify today 
on the Senior Financial Empowerment Act of 2009. And I think it 
is appropriate that we are convened to consider and discuss 
this legislation during the month of May, which is Elder Abuse 
Awareness Month.
    And I want to thank my colleague from North Carolina, Mr. 
Coble, for his leadership on this issue. It has been a pleasure 
working with you to advance this legislation. And I also want 
to extend my thanks to your panel of expert witnesses who will 
follow this Member panel.
    My own experiences on this issue began as the primary 
caregiver for my grandmother. That experience opened my eyes to 
some troubling exploitative tactics targeted to America's 
seniors. Growing up in Wisconsin, I was raised by my maternal 
grandparents.
    Though I went away for college, I returned to my hometown, 
Madison, after graduation to be there for my grandmother, who 
by that time was widowed. She had sacrificed so much to raise 
me, and eventually, I became her primary caregiver.
    Around the time she turned 90 years old, she asked me for a 
little help her sort through her mail and balancing her 
checkbook. And at first, I was struck by the sheer volume of 
solicitations she was getting.
    I was also shocked by how many sort of fly-by-night or 
``look alike'' charities were writing her on a monthly basis. 
Their pleas for donations looked and sounded legit, but I had 
my suspicions, and I began digging a little deeper.
    I was also disturbed by the amount of money my grandmother 
had been giving to these entities. She believed that those able 
to do so, ought to be as generous as possible to those in need, 
but she had no way of determining the legitimacy of the 
entities that were contacting her on a regular basis.
    That experience opened my eyes to the very real 
exploitation of seniors like my grandmother, through mail, 
telephone and Internet fraud. Millions of Americans have become 
victim of similar financial exploitation each year. And it is 
not just the isolated and lonely who may fall prey to these 
sort of practices.
    One only need read the newspaper in my home district in 
Wisconsin to confirm that this issue is widespread. Over the 
years, there have been ongoing reports about notch baby 
schemes, where Social Security beneficiaries born between 1917 
and 1921 are asked to send money to organizations that promise 
to change Federal laws to increase their benefits.
    These organizations go so far as to ask seniors if they 
would like their Federal money in a lump sum or paid in monthly 
installments. Just last month in Madison, the Capital Times 
reported that an 84-year-old Madison woman was duped out of 
nearly $3,000 after a phone scammer convinced her that her 
granddaughter's boyfriend was in a Canadian jail and needed 
bail money.
    Madison police officers reported that this woman received a 
phone call from a man who called her grandma and told her he 
was in a Canadian jail after being picked up for drunk driving.
    To convince the elderly woman, ``Officer Jacob Harris'' 
joined the telephone conversation and convinced her of the need 
for bail money for her granddaughter's boyfriend. This elderly 
woman wired the money and fell victim to a disturbingly common 
scam.
    I also read that not days after President Obama signed the 
historic health reform bill into law, fraudsters were figuring 
out how to scam seniors. A cable TV advertisement exhorted 
viewers to call an 800 number so they wouldn't miss a limited 
enrollment period to obtain coverage.
    And there have been reports of scammers going door-to-door 
as salespeople peddling Obamacare insurance policies. Now, we 
all know that there is no limited enrollment period for any 
coverage in the health care reform bill and that no such thing 
as a new Federal insurance policy named after the President 
exists.
    Though we have all read or heard these anecdotal stories, 
it is difficult to estimate the prevalence of financial 
exploitation cases due to severe underreporting. According to a 
2009 report by MetLife Mature Market Institute, for every 
report of abuse there are an estimated four or more that go 
unreported.
    We do know some facts though. The same study found that the 
annual financial loss by victims of senior financial abuse is 
estimated to be at least $2.6 billion. In 2007, postal 
inspectors investigated almost 3,000 mail fraud cases in the 
U.S. and arrested more than 1,200 mail fraud suspects.
    Further, the FBI has confirmed that criminals are modifying 
their targeting techniques to include online scams such as 
phishing and e-mail spamming. Given the prevalence of financial 
fraud targeting seniors, Mr. Coble and I introduced the Senior 
Financial Empowerment Act with a very precise goal in mind, 
empowering seniors and ending all abuse, neglect, and 
exploitation of America's elders.
    The bill builds on good work already being done at the 
Federal Trade Commission and the Department of Justice and 
seeks to empower these agencies to support local and state 
efforts to combat financial fraud and empower our seniors.
    We seek to accomplish this in three specific ways. First, 
by creating a centralized service for consumer education on 
mail, telemarketing and Internet fraud targeting seniors, 
second, the bill authorizes the A.G. to award competitive 
grants to carry out locally-focused mail, telemarketing and 
Internet fraud prevention and education programs for seniors.
    And finally, it declares that the week in the month of May, 
Elder Abuse Awareness Month should be designated as National 
Senior Fraud Awareness Week, and it encourages the President to 
issue a proclamation supporting increased public awareness.
    Mr. Chairman, as I wrap up my testimony, I want to again 
commend you for your longstanding commitment to America's 
seniors. When I saw my grandmother through the last years of 
her life, I made a pledge to help make sure older Americans 
have the tools that they need to protect themselves from those 
who would prey on them.
    Mr. Chairman and Members of the Subcommittee, my sincerest 
thanks to you for helping us see this through. I believe this 
bill before us represents one of the best examples of what a 
bipartisan, collaborative Committee process should look like. 
Thank you.
    [The prepared statement of Ms. Baldwin follows:]

          Prepared Statement of the Honorable Tammy Baldwin, 
        a Representative in Congress from the State of Wisconsin














                               __________
    Mr. Scott. The gentleman from North Carolina?

 TESTIMONY OF THE HONORABLE HOWARD COBLE, A REPRESENTATIVE IN 
           CONGRESS FROM THE STATE OF NORTH CAROLINA

    Mr. Coble. Thank you, Mr. Chairman. Now, Mr. Chairman given 
to you, and I would like to ask unanimous consent that my 
statement be made a part of the record.
    Mr. Scott. Without objection.
    [The prepared statement of Mr. Coble follows:]

 Prepared Statement of the Honorable Howard Coble, a Representative in 
               Congress from the State of North Carolina



                               __________

    Mr. Coble. Thank you, sir.
    Mr. Scott. Good. Thank you. At this point we will recess 
the Committee and return as soon as the vote is over. It will 
probably be at least 15 to 20 minutes. Recess.
    [Recess.]
    Mr. Scott. The Subcommittee will now come to order. We are 
pleased to welcome you to today's hearing before the 
Subcommittee on Crime, Terrorism and Homeland Security on H.R. 
3040, the ``Senior Financial Empowerment Act of 2010.''
    [The bill, H.R. 3040, follows:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
                               __________
    Mr. Scott. Today we will hear testimony about the 
importance of this bill and the issues pertaining to what is 
becoming the crime of the 21st century, elder financial abuse. 
Now, on June 29, Representatives Tammy Baldwin and Howard Coble 
introduced H.R. 3040, which was referred to the Judiciary 
Committee, and we have heard from both of our colleagues.
    The bill was introduced primarily to address the need to 
educate and inform the public of the predatory practices of 
unscrupulous individuals who prey upon the vulnerabilities of 
our elders. Ours is an aging society.
    At one time the elderly population was small, and now it is 
significant and growing. Where adults age 60 or over 
represented 6 percent of the U.S. population in 1990, it now 
represents over 17 percent. The number will continue to climb 
as the baby boom generation ages.
    This older segment of our population owns the largest 
portion of the wealth in the United States. They control at 
least 70 percent of the net worth of the Nation's households 
and very often do not realize that the value of their homes and 
other assets have appreciated significantly. Because of this 
elders are often becoming very enticing targets for those who 
would seek to defraud them of assets that they have set aside 
for future security, their life savings.
    It has been difficult to estimate the prevalence of elder 
fraud. Cases are under reported, and the definition of elder 
and senior varies from state to state. Although we currently 
lack national reporting mechanisms to tracking the financial 
exploitation of elders, there is no doubt that we have got a 
real problem in this country.
    According to a 1998 study by the National Center on Elder 
Abuse, financial abuse accounted for approximately 12 percent 
of all elder abuse through reported nationally in 1993 and 
1994, 30 percent of substantiated elder abuse reports submitted 
to the adult protective services in 1996 after the exclusion of 
reports of self-neglect.
    Now many experts believe that the level of elder 
exploitation may well exceed that that has been reported to 
authorities and documented researchers.
    That is because many of those who fall victim of financial 
exploitation including mail, telemarketing, Internet fraud each 
year are seniors who fail to report, either because of the 
embarrassment or fear of being deemed incapable of handling 
their personal affairs.
    With the present state of the economy, older Americans are 
at greater risk than ever of having their financial security 
threatened and disrupted. Fraud perpetrated against seniors is 
a crime that can have even more significant impact on its 
victims because they are often incapable of recovering from 
financial losses.
    Too often they simply don't have the years left to recover 
and rebuild financially. Many are too old or too frail to re-
enter the workplace. For every dollar lost to theft or abuse, 
there are still unrelated costs associated with stress and 
health care and the intervention of social services.
    It goes beyond people losing dollars for everyday living. 
It involves millions of dollars in increased costs to Medicare 
and Medicaid. Based on research in MetLife's Mature Market 
study, senior financial fraud and abuse robs America's seniors 
of more than $2.6 billion every year.
    One estimate projects the number of victims in the range 
from a low of 100,000 to a high of a million a year. Now, this 
is a matter of urgency. Elder financial abuse and fraud will 
become more commonplace as a consequence of the changing 
demographics of the United States.
    Fraud complaints by older persons are increasing annually 
along with the overall number of complaints filed. In 2007, of 
consumers reporting their age, persons 50 years of age filed 
almost 50,000 of the 130,000 complaints. In 2009, that number 
rose to almost 150,000 out of 450,000 complaints.
    Action on H.R. 3040 is urgently needed as another tool in 
our arsenal of weapons to combat this serious offense. And I 
also have grave concerns about the growing problem of identity 
theft.
    According to the Federal Trade Commission's Consumer 
Centennial database, identity theft is the number one consumer 
complaint involving the use of another's personal identity 
information such as a bank account or credit card or other 
government documents such as a driver's license for someone's 
personal or financial gain.
    Identity theft affects as many as 9 million Americans 
annually. And this bill when enacted to law will be part of the 
continuing effort to educate seniors about the need to protect 
their personal information. The consequences of identity theft 
can be severe.
    The victim's good name is tarnished. Financial loss can be 
substantial. Time, effort and money are often needed to 
recover, and if the victim is an older person in the 70's or 
80's, the effects can be especially devastating, and the time 
can be even more crucial.
    That we have got to have greater enforcement of the laws 
prohibiting identity theft, and that means the FBI can't opt 
out of pursuing an investigation simply because the monetary 
loss is too little. This is an act that requires premeditation 
and deliberate intent to cause personal harm with no regard of 
the victim.
    The penalties for these crimes already provide sufficient 
jail time, but penalties must also include stiff fines to make 
this act financially painful for the perpetrators. But 
penalties are meaningless if the crimes are not prosecuted. And 
we frequently hear that one problem is that the crimes are not 
even investigated.
    So if the FBI's ability to investigate and prosecute these 
crimes is hampered by budgetary constraints, then that is 
something we need to hear about from the FBI, but the decisive 
enforcement and prosecution is needed and long overdue.
    In today's hearing we have already heard from 
Representatives Baldwin and Coble who testified about the 
Senior Financial Empowerment Act, which they have introduced to 
specifically curb the rapidly growing problem of victimization 
of senior citizens via telemarketing, mail and Internet, 
through public awareness, education and prevention.
    This witness the panel will hear from shortly will discuss 
why this legislation is needed and how its passage will not 
only facilitate the creation of mechanisms for reporting fraud, 
but will also further the effort to provide greater protection 
for both seniors and the general public as a result of 
increased public awareness.
    Now it is my privilege to recognize the Ranking Member of 
the Subcommittee, my colleague from Texas, Judge Gohmert.
    Mr. Gohmert. Thank you, Chairman Scott, and appreciate the 
witnesses being here. And obviously, you have been delayed 
substantially because of the votes and the way they fell. And 
so I have a statement here, it is in writing, and I would ask 
that it be submitted into the record. I may do so?
    Mr. Scott. Without objection.
    [The prepared statement of Mr. Gohmert follows:]

Prepared Statement of the Honorable Louie Gohmert, a Representative in 
 Congress from the State of Texas, and Ranking Member, Subcommittee on 
                Crime, Terrorism, and Homeland Security









                               __________

    Mr. Gohmert. And otherwise just--I mean, I am a co-sponsor 
of this legislation, and I appreciate so much Ms. Baldwin's 
sensitivity in putting this legislation together. It is a huge 
problem in America, and seniors become more and more 
vulnerable. And it seems as we have entered a time when 
people's minds do not always last as long as their bodies.
    It is as my friend, the Chairman, Chairman Scott said, ``It 
is going to just keep growing.'' So we appreciate your being 
here. We appreciate hearing what you have to say. Thank you, 
Chairman.
    Mr. Scott. Thank you. On this panel of witnesses we will 
begin with W. Lee Hammond of Salisbury, Maryland. He is 
recently elected by AARP's board of directors to serve as 
president for the 2010 to 2012 biennium.
    Since his election to the board in 2002, he has served on 
and chaired several AARP committees including audit and 
finance, membership committee and national nominating 
committee. He is a retired educator, began his 30-year career 
in education in Maryland as a classroom teacher.
    He served as a school administrator for 25 years and has 
had leadership roles in several professional associations. In 
addition to his service with AARP, he also serves as a member 
of the Maryland Interagency Committee on Aging Services and is 
vice-chair of the board of MAC, Inc., a nonprofit area agency 
on aging, serving four Maryland counties.
    Before becoming an AARP board member, he served as 
president of the Maryland Retired Teachers Association and as 
AARP Maryland state president. His earlier volunteer service 
included a 2-year member of the Maryland Commission on Aging.
    Our second witness will be Bob Blancato, who is president 
of Matz, Blancato & Associates, a full-service firm integrating 
strategic consulting, government affairs, advocacy services and 
association and coalition management.
    He is the national coordinator of the Elder Justice 
Coalition, a bipartisan, 581-member organization. From 2000 to 
2006, he served as president of the National Committee for the 
Preservation of Elder Abuse and remains on its executive 
committee.
    He currently serves as executive director of the National 
Association of Nutrition and Aging Services, a program he spent 
17 years on the staff of the House Committee on Aging. He 
served as executive director of the 1995 White House Conference 
on Aging and on the policy committee for the 2005 conference.
    Most recently, he was appointed chairman of the 
Commonwealth Council on Aging in Virginia by Governor Kaine. He 
holds a Bachelor of Arts degree from Georgetown University and 
a Master's of public administration from American University.
    He is also on the adjunct faculty of the Erickson School of 
the University of Maryland Baltimore County and has also taught 
at George Washington University graduate school of political 
management and the graduate school of social work at the 
University of Maryland in Baltimore.
    Our third witness was going to be introduced by our 
colleague from Texas, Mr. Poe, who was with us earlier, but had 
to leave. Latifa Ring is a grassroots elder rights advocate 
from Houston, Texas, founder of the Elder Abuse and 
Guardianship Victims Taskforce for Change, which submitted to 
leaders in Washington, a proposal to address elder abuse, 
financial exploitation of elderly and guardianship system 
abuse.
    She has also recently founded the Elder Abuse Victims 
Advocates. She was born and raised as an orphan in North Africa 
and came to the United States in 1974.
    She has spent the last 30 years working with the computer 
technology industry and is now an independent consultant when 
she isn't working on elder abuse issues.
    She is passionate, yet she has a passion to deal with elder 
care issues which stems from her own experience over the past 5 
years caring for an elderly missionary woman who was raised as 
an orphan in North Africa and who was a victim of abuse and 
neglect in a private home in Delaware.
    She is a member of the Elder Justice Coalition and has been 
a member of the National Guardianship Association and is 
presently a member of various online communities that address 
elder issues.
    She is a graduate from Truman State University as a premed 
student with a degree in biology. Ms. Ring is accompanied by 
Mr. Mark Glasser, who apparently will not make a statement, but 
is available for questions.
    We will begin with Mr. Hammond.

  TESTIMONY OF W. LEE HAMMOND, PRESIDENT, AARP, WASHINGTON, DC

    Mr. Hammond. Good afternoon, Chairman Scott, Congressman 
Gohmert. I am Lee Hammond, the AARP president. On behalf of 
millions of AARP members, we thank you for convening this 
hearing on protecting the financial security of seniors.
    Financial abuse of older Americans is a serious concern and 
AARP is committed to educating our members about financial 
abuse so they can avoid it. Through our education and outreach 
financial security team we inform retirees and those near 
retirement about how to spot misleading representations about 
financial investments.
    Through our ``No Free Lunch'' campaign we provide members 
with checklists on what to listen for if they wish to attend 
investment seminars. Members can report any concerns about the 
presentation to AARP and to their state regulators.
    Moreover, we have long been advocates for robust regulation 
of financial products to protect the hard-earned retirement 
nest eggs of millions of Americans. To that end, we have been 
strong supporters of financial regulatory reform and in 
particular, have worked hard to ensure that brokers are subject 
to the same fiduciary duty that must be met by investment 
advisors.
    H.R. 3040 is another step that encourages a united, 
bipartisan commitment to protecting older adults from financial 
abuse by various deceptive techniques that undermine their 
financial security.
    Although, financial abuse has been described as the fastest 
growing form of elder abuse, too few studies have been 
conducted on its incidence and prevalence to provide the 
accurate picture of the number of victims.
    Moreover, protecting older people from financial abuse is 
stymied by insufficient resources devoted to investigating and 
especially enforcing laws designed to prevent such crimes. Many 
victims are reluctant to report financial abuse.
    Many may not know how or where to report such exploitation 
and to what extent the right law enforcement agency receives a 
complaint. It may not have the resources to adequately protect 
individuals or prevent fraud against others.
    Telemarketing fraud is a major concern for older people who 
are particularly vulnerable to certain types of telemarketing 
fraud including magazine scams, prizes and sweepstakes scams, 
and phishing.
    To date, consumers have registered 48.4 million phone 
numbers on the Do Not Call registry, and according to the 
Federal Trade Commission, most telemarketers have been diligent 
in their efforts to scrub their lists to meet the registry's 
requirements.
    Encouraging more people to register will help avoid 
telemarketing fraud and will help enforcement efforts to 
prevent fraudulent practices.
    The U.S. Securities and Exchange Commission has found that 
an estimated 5 million senior citizens become victims of 
financial abuse and fraud each year.
    They attribute this high rate to the fact that older 
investors hold a relatively high amount of wealth and to the 
fact that one-third of all U.S. investors are between the ages 
of 50 and 64.
    Contrary to popular belief, the financial industry 
regulatory authority finds that the most frequent victim of 
investment fraud is a college educated male, age 55 to 65, who 
is an active investor and does not use an advisor.
    An analysis of consumer complaints from the database 
maintained by the FTC indicates that in 2008, identity theft 
was the number one complaint category in the database of over 1 
million complaints.
    These complaints totaled $1.8 billion in financial losses 
with 84 percent of consumers reporting median monetary losses 
of $440 per consumer. Consumers over the age of 50 accounted 
for 30 percent of all complaints to the database and 26 percent 
of all identity theft complaints.
    According to the 2008 data, more than three out of five 
consumers who complained indicated that they were contacted by 
the fraudulent company by e-mail or through the Internet. With 
the growth in social networking, use of the Internet is 
anticipated to be a growing method of perpetrating financial 
fraud.
    H.R. 3040 is a cost effective, targeted approach to prevent 
financial exploitation and promote economic security and 
financial education among those approaching retirement. The 
Senior Financial Empowerment Act would make improvements that 
strengthen and coordinate the efforts of nonprofits and 
government entities to educate older Americans about abusive 
mail, Internet and telemarketer schemes.
    H.R. 3040 promotes the ability of older Americans to live 
independently and maintain their financial security through 
provisions that would centralize a monitoring service for 
consumer educational mail, telemarketing and Internet fraud 
targeting seniors in the Federal Trade Commission, authorize 
the Attorney General to make local grants to prevent mail, 
telemarketing and Internet fraud and establish a senior fraud 
awareness week in May of each year to expand education and 
public awareness.
    Again, we commend the Subcommittee for holding this 
important hearing today to focus more attention on the critical 
problem of financial elder abuse.
    We hope that this hearing is just the beginning, and we 
urge this Committee to take action to address this growing 
national problem, including authorizing more resources for 
enforcement. And I am happy to take any questions.
    [The prepared statement of Mr. Hammond follows:]

                  Prepared Statement of W. Lee Hammond












                               __________
    Mr. Scott. Thank you. I failed to remind people about the 
timing device before you, but I think most of the witnesses 
aware that it starts green, goes yellow with 1 minute left and 
turns red when the time is expired.
    Mr. Blancato?

 TESTIMONY OF ROBERT B. BLANCATO, NATIONAL COORDINATOR, ELDER 
               JUSTICE COALITION, WASHINGTON, DC

    Mr. Blancato. Thank you, Chairman Scott, Judge Gohmert. It 
is an honor to once again appear before you in my capacity as 
National Coordinator of the Elder Justice Coalition, a 
nonpartisan, 640-member organization working to promote elder 
justice in the United States.
    Let me begin Mr. Chairman, by commending your leadership on 
behalf of elder justice. In the last Congress this same 
Subcommittee held a hearing on the Elder Abuse Victims Act and 
soon thereafter reported it out of the Committee and the House 
both in 2008 and 2009, passed this crucial legislation.
    We remain hopeful that the Senate, beginning with the 
Judiciary Committee will also pass this bill this year. Your 
leadership and dedication to this issue of elder abuse 
prevention is most commendable.
    It is a pleasure today to testify in support of H.R. 3040, 
sponsored by another distinct champion of elder justice, 
Representative Baldwin.
    In addition to her leadership on this Committee for this 
legislation, she was one of the leaders in the House that 
helped passed the Elder Justice Act, which was part of the 
health care reform legislation signed into law this past March.
    Passage of H.R. 3040 is necessary in order to improve our 
capacity to prevent seniors from falling prey to another form 
of elder abuse, financial exploitation which involves mail, 
telemarketing and Internet fraud. A review of the findings 
section of this bill is sobering. Several points are worth 
emphasizing.
    The first, and most obvious, that you all see in your 
districts and states is the population is aging right before 
our eyes. We know the numbers today, 34 million people over 65, 
but come next year, the first wave of boomers will turn 65 and 
by the time they all do we will have a doubling of our elderly 
population.
    It also references the Senate Special Committee on Aging 
estimates that there could be as many as 5 million cases of 
elder abuse each year in this Nation. Financial abuse for the 
past several years has been one of the most fastest rising 
forms of elder abuse.
    The MetLife Mature Market Study referenced, and I would ask 
that it be inserted in the record for the education benefit of 
the Subcommittee, in addition to the $2.6 billion finding, 
identified Internet scams that were particularly prevalent 
going forward, including social networks, e-mail, medications, 
assisted devices and medical equipment, make-up and anti-aging 
remedies and property and information solicitations all done 
through the Internet.
    Another Justice Department study released earlier indicated 
that with respect to Internet fraud data, the study shows that 
those 60 and over lost more money per incident of financial 
abuse than any other age group.
    Sad reality is that that the wonders of modern technology 
can be offset by their use in the horror of elder financial 
abuse. The New York Times, in an article on May 20, entitled 
``Keeping Online Criminals at Bay'' noted, ``The Web is a 
fountain of information, a busy marketplace, a thriving social 
scene and a den of criminal activity.''
    The Baldwin bill is comprehensive and proactive in its 
approach to the growing problem as it affects seniors. It will 
help stop abusive mail, telemarketing and Internet fraud 
targeting seniors.
    It will join with the Elder Justice Act in helping to raise 
public awareness of the impact of these crimes on the lives of 
seniors and the need to educate individuals, families and 
caregivers on how to detect, report and combat financial elder 
abuse.
    We do need to involve the Federal Trade Commission more in 
this prevention work. The Baldwin bill would have them be the 
centralized service providing consumer education on mail, 
telemarketing and Internet fraud targeting seniors.
    Here we must use technology as a tool of help by having, as 
the bill calls for, a centralized Web site to serve as a 
resource for seniors on financial fraud and abuse prevention.
    We support the creation of a new grant program to state and 
local organizations to do locally focused public awareness 
prevention campaigns. In many instances, there are communities 
already doing this kind of service, and these grants could help 
make them stronger and become more national models.
    And designating a week in May to coincide with Older 
Americans Month and Elder Abuse Awareness Month would be 
helpful to the overall public awareness raising efforts.
    For example, some law enforcement training that was done 
recently at a forum on upstate New York included such important 
tips such as if a salesman won't meet with you if your family 
is present, that is a red flag.
    When a postcard claiming that you are a big sweepstakes 
winner lands in your mailbox, do your research, do your due 
diligence because just because you see an ad in the newspaper 
or on television or hear something on the radio does not mean 
that it is legitimate.
    So the reality is financial abuse and exploitation of 
seniors is as close as a family member or as far away as an 
international phone call from a scam artist.
    No matter the perpetrator, the elderly victim is never the 
same. They are, in many cases, never able to recoup what they 
lose financially. Add the psychological harm and it is an 
especially cruel form of victimization.
    And if there is any doubt that this is only a national 
problem, there are local and state headlines everyday in news 
articles that come to us that we read about such as 
``Sweepstakes' Cafes Thrive, Despite Police Misgivings,'' 
``Nigerian Scam Still Nets Victims,'' ``South Bay Elderly 
Warned on Financial Scams,'' and you can run through a gamut of 
articles of this kind.
    And even in today's Washington Post, an article about a man 
pleading guilty to a swindling of $108,000 from a couple in 
Montgomery County.
    So I will end at this point Mr. Chairman, and I appreciate 
your leadership again on behalf of elder justice issues.
    [The prepared statement of Mr. Blancato follows:]

                Prepared Statement of Robert B. Blancato








                               __________
    Mr. Scott. Ms. Ring?

  TESTIMONY OF LATIFA S. RING, ELDER ABUSE VICTIMS ADVOCATES, 
                          HOUSTON, TX

    Ms. Ring. Thank you, Mr. Chairman, Congressman Gohmert, 
opportunity to address the Committee on this critical issue. I 
am excited to see legislation addressing financial exploitation 
of the elderly.
    I thank you also on behalf of over 1,000 people that have 
signed a petition that is attached to my written testimony 
asking us to work to end abuse and exploitation of the elderly.
    Financial exploitation and fraud against the elderly is an 
epidemic, and it has gone largely unaddressed over the last 20 
years. It has escalated into what some call the crime of the 
21st century.
    Often elderly victims do not report these crimes for fear 
of being declared mentally incompetent, for fear of losing 
their lives to predators of fraud who know this fear and 
exploit it.
    The Senior Financial Empowerment Act can go far in 
encouraging seniors to come forward to report these crimes. 
Many elderly people are alleged to be incompetent just because 
they are old and need a helping hand.
    Ageism is a prejudice in our society more deeply rooted 
than racism. Simple financial mistakes that you and I make are 
dismissed as casual, but in an elderly person, making that same 
mistake can be treated as an irrefutable indicator of clinical 
decline.
    This prejudice alone is stressing many elderly people into 
unnecessary guardianships where they are stripped of all of 
their civil rights and often all of their property.
    We must ensure that as we work to combat fraud against the 
elderly that we also have a system in place to protect those 
who come forward that will be alleged to be incapacitated when 
they report that fraud.
    As it stands today, many of them will fall into 
guardianships that will deepen their misery, increase their 
fear, strip them of all of their civil rights, deny them their 
constitutional rights to due process and further expose them to 
fraud and financial exploitation that is far worse than the 
original crime that they reported.
    Guardianships and conservatorships in America should be 
protecting the incapacitated people, but they are not doing so. 
Instead, guardianships are being used as an instrument to rob 
them of all of their property using long, drawn out litigation 
tactics and billing schemes for services that rarely benefit 
the ward.
    To understand this fear, you must understand what happens 
to the elderly person who has been declared incapacitated, and 
we must address this fear if H.R. 3040 is going to be 
successful in helping citizens feel comfortable coming forward 
and reporting fraud.
    This pernicious crime of financial exploitation against the 
elderly that is occurring under the guise of protection occurs 
with impunity. It occurs because judges routinely rubber stamp 
the excessive fee applications, sometimes just to clear the 
docket.
    But sometimes just because we know Medicaid is out there 
and they are more concerned about making sure that the 
attorneys and guardians get paid knowing that the taxpayers 
will step up to the plate with Federal and state tax dollars 
and ensure that the elderly person doesn't starve to death.
    My written testimony includes a petition signed by close to 
1,000 people asking for help to address this issue. Many of 
them have told their own stories of how a system designed to 
protect the elderly has in fact impacted them and their loved 
ones. Please take a minute to look at the petition, and see 
what private citizens in your state are saying.
    My passion to work for reform stems from my own efforts to 
help an elderly woman who raised me as an orphan in North 
Africa, who was a victim of abuse in Delaware.
    When I went to Adult Protective Services, they sent me into 
the guardianship system that cost her all of her $200,000 
estate in less than 9 months. It cost me over $70,000. I 
traveled from Texas to Delaware for 5 years, struggling through 
this system.
    In the end, I did become her guardian when her money was 
gone and was actually sued for the attorney fees even though, 
as a guardian, I never should have been. I could not afford to 
fight anymore. I took a home equity loan on my house, lost my 
job, and today I take care of Mary who is 95 years old. She 
lives in Texas.
    She has been supported by the taxpayers for the last 3\1/2\ 
years. It should never cost anyone $200,000 to get help when 
they are a victim of abuse, and it should never cost the Good 
Samaritan $70,000 to come to their aid.
    My friend Mark here is the son of Lillian Glasser. She had 
an estate valued over $25 million. Twenty seven attorneys were 
billing in that case and getting paid for their fees. One 
hearing took 34 days and another took 20. The cost to date to 
her estate nears $10 million.
    My friend Kim here is from Pennsylvania where her husband 
Richard is under an all out assault and by two guardianships in 
Florida, one against his mother and one against his sister. The 
lawyers are making a killing on all sides while he is under an 
all out assault by a cabal of attorneys and guardians.
    Bonnie is here today from Florida. She works with 
CourtWatch. Her mother was in temporary emergency guardianship, 
and before she was ever adjudicated, she lost $400,000 in only 
4 months.
    The guardian put her into hospice with a false diagnosis. 
She was put onto morphine and passed away shortly thereafter. 
Of course the elderly fear this system of protection.
    H.R. 3040 is an important bill. We need the elderly to come 
forth and report fraud. We need to stop fraud. But the 
perpetrators of fraud know this fear. They will exploit that 
fear until we do something to ensure that when our elderly and 
vulnerable citizens come forward and report fraud against them 
and are found to be vulnerable incapacitated.
    That we have a fair system that will, in fact, protect them 
and not further exploit them and destroy not only their lives 
but the lives of their families. Then how can we ask them to 
come forward?
    The stripping of civil and constitutionally guaranteed 
rights and the waste of state and Federal tax dollars, Social 
Security then should be concern enough for you to get involved.
    As Congressman Claude Pepper said in 1989, ``Guardianship 
is in many ways the most severe form of deprivation of civil 
rights that can be imposed on a citizen of the United States.'' 
An individual under guardianship is typically stripped of his 
personal rights such as the right to vote, the right to marry 
and the right to handle money.
    These people end up in a system where they can lose 
everything, all of their liberties, and end up with less 
liberties than a citizen on death row.
    That is--I am just about done. Attached to my testimony I 
have included two papers on guardianship, one by my 
organization and one by an organization named HALT. There we 
have gone into a lot of more details on what the problems are 
and what we think some of the recommendations could be.
    The Senior Financial Empowerment Act can go far toward 
addressing financial exploitation of the elderly and stopping 
perpetrators of mail, Internet and telemarketing fraud. But it 
can go further.
    Mr. Chairman, Congressman Gohmert and Members of this 
Committee, if this bill goes to markup I ask you please to 
consider adding language to address abuse in the guardianship 
system and to put in safeguards to protect the vulnerable 
elderly, who will come forward as a result of this bill and 
report that they have been victims of fraud.
    If we do not act today, tomorrow we will pay for our 
inaction when any one of us in this room could be old and 
become a victim of crime. Thank you.
    [The prepared statement of Ms. Ring follows:]

                  Prepared Statement of Latifa S. Ring





























                               __________

    Mr. Scott. Thank you. Mr. Blancato asked for a report to be 
entered into the record and without objection that will be 
entered into the record.*
---------------------------------------------------------------------------
    *The information referred to, a Metlife Mature Market Study, is not 
printed in this hearing but is on file with the Subcommittee. It can 
also be accessed at the following link:

      http://www.metlife.com/assets/cao/mmi/publications/studies/
      mmi-study-broken-trust-
      elders-family-finances.pdf
    And Ms. Ring asked for the petitions and her whole report 
to be in the record. That, too, will be entered without 
objection.**
---------------------------------------------------------------------------
    **Due to its voluminous size, the material referred to is not 
printed in this hearing but is on file with the Subcommittee.
---------------------------------------------------------------------------
    I will now begin questions under the 5-minute rule. Ms. 
Ring, you mentioned guardianships, and you had some suggestions 
on fixing it. Obviously when you have got attorneys involved 
the meter starts running and people start losing money. What do 
you suggest as alternatives?
    Ms. Ring. Well, first I think we need to do a complete 
study of the problem. Some of the recommendations that we have 
made is when you go into probate after somebody is deceased I 
understand there are some limits on how much can be billed to 
an estate for legal fees.
    And since guardianship is sometimes also known as living 
probate maybe we could come up with something like that to 
limit the amount of fees that could be charged to an estate.
    Furthermore, there is one really important issue here that 
I think is important. Often the large amount of sums that are 
billed for legal fees in guardianships are spent on wild goose 
chases after alleged allegations of criminal conduct that could 
be under the Victims' Rights Act pursued through the criminal 
justice system.
    And I think that if there are allegations of criminal 
conduct being made that somebody stole money, that that victim, 
just because they are incapacitated, they still should have the 
right to have that allegation investigated through the criminal 
justice system where they don't have to foot the bill and pay 
the price for that investigation.
    Mr. Scott. Thank you.
    Mr. Hammond, how often are elder abuse financial crimes not 
reported?
    Mr. Hammond. Mr. Chairman, I think probably more are not 
reported than are reported for a number of reasons. It is an 
embarrassment to the elderly to feel that they have been 
scammed.
    They don't want to admit that. They are concerned, as was 
mentioned before, that they may be found incapable of making 
their own decisions.
    We have found in many cases that the efforts that we have 
made to educate our members have been effective and that they 
are actually using some of the methods that we have been 
working with over the years in teaching them how to recognize 
fraud and abuse, both telephonic and now through the Internet.
    But it is increasingly difficult, especially with the 
Internet abuse, and our members are becoming more and more 
users of the Internet, exponentially they are increasing over 
the last 2, 3 years.
    So they are getting into this area where they really don't 
have much expertise and are very vulnerable to the kinds of 
things that we see on the Internet.
    So they don't want to report. They don't want to feel like 
they are incapable of handling their own affairs. And in many 
cases it is a plain embarrassment for them to actually 
acknowledge that they have lost money.
    Mr. Scott. Once it is reported, how often are the crimes 
actually investigated and prosecuted?
    Mr. Hammond. Unfortunately not nearly as often as we would 
like.
    Mr. Scott. I mean, do they ever get----
    Mr. Hammond. As to----
    Mr. Scott [continuing]. Do most of them, I mean, is 
anything other than just take the information down? And is 
there any investigation into it?
    Mr. Hammond. There are in some cases investigations. I can 
speak at the State of Maryland that I am familiar with, we work 
with the attorney general's office in the State of Maryland to 
help train financial institutions, the tellers in banks and so 
forth, to recognize this kind of fraud and abuse as it appears 
to them.
    And then unfortunately that is passed on in Maryland to the 
social services agencies, which have their own budgetary 
constraints and problems. And a few get investigated.
    Mr. Scott. And not the criminal justice, Mr. Blancato?
    Mr. Blancato. Well, there are instances in different parts 
of the country where they have specialized units within 
district attorney's offices and local prosecuting offices, like 
San Diego, California, for example, has had a dedicated person 
as an elder abuse prosecutor investigating cases. His name is 
Paul Greenwood.
    And, you know, where they have been able to target 
resources for that purpose they have a very good track record 
of prosecuting these cases and enhancing public awareness about 
it.
    But I think that the larger question is adult protective 
services is a primary front line source of investigations of 
elder abuse cases.
    And one of the main features of the Elder Justice Act, 
which is now law, was to give a dedicated funding source so 
that they could actually go out and do the kind of work 
necessary to investigate, detect and help report these cases so 
that they can be reduced.
    But there needs to be more resources dedicated or 
reallocated depending on the nature of things, for elder abuse 
prosecutions because there is more work being done in this 
area, and I think we are in a position now that more local 
governments could do this and be effective at it.
    Mr. Hammond. And Mr. Chairman, I would like to add that 
this is the case in Maryland where there is a person who is 
dedicated but is a person, one person.
    Mr. Scott. And many of these crimes can be solved but it 
takes a lot of legwork, a lot of investigation. What usually 
happens is if you report a credit card stolen, and there were 
some charges on it is they just cut off the card, restore the 
credit rather than going through and trying to catch the guy.
    I reported a card stolen once, and while I was going 
through step-by-step the charges that were made that I 
remembered making and, you know, crossing off the ones that I 
didn't make, I was asked am I at a gas station? I said, ``No, I 
am at home.'' Well, your card is being used right now.
    Well, you know, for low kind of things like that it looks 
like they just let the thing run until they can catch them in 
the act. I mean as they go get a big screen television and go 
to pick up to pick up the TV, well, maybe in between the police 
can be there so with the pickup he will be picked up.
    And it seems to me that with a lot more resources we could 
solve a lot of these crimes. I mean, most of them can be 
solved. Some of the people actually use the card and have stuff 
mailed to the house.
    These things can be solved but it takes money and the last 
identity theft bill we put a little money, not enough, into the 
bill for, as you have suggested, dedicated FBI investigation.
    But that is one of the things that is frustrating to me 
that these things just aren't even investigated. And so the 
people perpetrating the crimes know that these are low risk 
crimes.
    Mr. Blancato. Mr. Chairman, one other point I would make on 
that, that case in New York, that Brooke Astor case, I think 
was an interesting example of where you put dedicated 
prosecutors on the case and they pursue--even though it is a 
family matter there were large sums of money involved.
    And they did a tremendous public education job every day 
they went to court and pursued that case against what the 
grandson sued the father, charging the father with elder 
financial abuse against the grandmother.
    But it was a very important case because of the way the 
prosecutors handled that case and brought that issue to the 
forefront in New York.
    Mr. Scott. Yes?
    Ms. Ring. I am sorry, one more thing about--you had asked 
about how to cut attorney fees, legal costs of pursuing these 
crimes? And I think a lot of them, I am not a lawyer, okay, or 
an expert, but from looking at 250 cases and talking to 
hundreds of victims, it seems to me the name of the game is 
find an opportunity just to bill and bill and bill and bill.
    People bill to have a 2-hour conference call to find out if 
Aunt Mary can go to lunch with sister Susie on Friday and Bobby 
Jo. I mean it is ridiculous, and so because you and I, everyday 
citizens, when somebody is pursuing a $100 or a $1,000 check we 
can say uncle. We are not pursuing this through the civil 
justice system.
    We are going to go call the police. The incapacitated 
person can't say uncle or can't say stop. Their voice is taken 
from them. So it is just a never ending meter. It just runs and 
runs and runs until the person passes away, and there is no one 
stopping it.
    And you can just basically bill for whatever so I think I 
want to mention that because a lot of this litigation with 
these enormous amounts of money are unnecessary, and they don't 
benefit the wards.
    Mr. Scott. Mr. Glasser?
    Mr. Glasser. I would like to address the issue of 
guardianship in terms of the Federal aspects. Guardianship is 
an abrogation of constitutional rights. And that is where the 
Federal come in. We have all kinds of protections but there is 
no protection about this abrogation.
    It is a difficult job for you folks, but one of the biggest 
vehicles is emergency guardianship. Without burdening the 
Federal system to find a simple protection, we have a PACER 
online system.
    If we could restrict the states in terms of limiting what 
lawyers could go in the process and having a detailed Federal 
form that would go into any state emergency guardianship and 
have it within 48 hours posted on the Federal PACER system with 
all communication and all communication and all transcripts and 
possibly some other Federal registries of who files emergency 
guardianship and finances and fines for lying.
    That wouldn't stop it all but it can be done simply and 
expeditiously. There are professionals who use the system. The 
fact that somebody reports something and then they go into 
guardianship isn't an accident. There is targeting, and the 
easiest way to target is emergency guardianship.
    That we should limit the amount of judges that can do it, 
and we should have it that the state, that the county and the 
court, if there is a Federal review of what is filed that the 
state has to pay to proceed, and that would help limit 
emergency guardianships to if they are necessary. Thank you.
    Mr. Scott. Thank you.
    Gentleman from Texas?
    Mr. Gohmert. Thank you, Chairman Scott. Well, it does pose 
a difficult question when you are talking about guardianships 
because you are normally talking about a state law vehicle. And 
I don't know that we want to federalize, you know, such a state 
and local procedure. It might scare me to have decisions made 
on a national scale instead of a judge that is locally with the 
people involved.
    But it seems like there are abuses, at least a couple of 
different ways in areas you are talking about. One in which 
there is a family member that tries to take advantage of a 
senior and may even push them into a guardianship that 
shouldn't be taking place.
    On the other hand, there are some incredibly smooth 
criminals, who make an amazing living by finding seniors, 
getting between the family and that senior, convincing them 
that they are the ones that will help them against the family 
that doesn't really care and ending up bleeding the estate in 
that manner.
    But that is one of the reasons I appreciated so much Ms. 
Baldwin pursuing this. Some of these people, I mean this is an 
interstate issue in so many cases. They go from state to state, 
taking advantage of seniors, making sure that they are 
somewhere where they wouldn't be recognized from what they had 
done to seniors before.
    And it would seem that we would be well served to make sure 
that there is a Federal database that people can go to and make 
sure whether this is somebody who has done this before, where 
they can't keep hopping state to state and depriving seniors 
and families of what should be theirs.
    But I had an interesting family situation not long ago 
where a senior family member was contacted by a gentleman and 
was told that--and this person was confused as to whether she 
had overpaid her taxes or underpaid her taxes. But somebody 
from the government had to come by and visit at her house after 
5.
    And so there were other family members there to make sure 
what the situation was. It turns out he pulled up in his Lexus, 
but he was there to sell AARP Medigap. And that his line was, 
once there were family there, that she was paying too much for 
her Medigap insurance, and she ought to be buying it from AARP, 
and that would save her a ton of money.
    And so many seniors are not aware of--since there was so 
much debate about preexisting conditions, the AARP was able to 
get an exemption for their Medigap so that the preexisting 
condition may not be addressed. Let us see, there is still a 
waiting period that AARP was able to get under the new health 
care bill.
    Also of course others that sell Medigap insurance are 
limited in the amount they can claim as business expense in the 
way of payment to executives at $500,000 but obviously AARP got 
an exemption there so they can claim the full amount for 
whatever is paid the executives.
    Mr. Rand makes--at one energy and commerce hearing, he said 
he made around $800,000, so he would be able to--or AARP would 
be able to claim that full amount.
    So anyway, Mr. Hammond, I know you are a position with the 
board and not an executive with AARP, but I think it would do 
seniors a great deal of good if AARP discloses completely the 
difference between what they were able to get in the way of 
exemptions through the health care bill to seniors, as opposed 
to what everyone else will have to do. The exemption they were 
able to get for their executives compared to other sellers of 
Medigap, and I welcome your comments.
    Mr. Hammond. Well, at this point, Mr. Gohmert, I really 
don't have a comment because I am not aware of any exemptions 
that we have gotten. So I will be glad to look into that and 
will get back to you with that answer. In the meantime, I would 
like----
    Mr. Gohmert. Given your background, I know that you will.
    Mr. Hammond.--I would like to know who the salesman was, 
who they talked to so that we can check that information out.
    Mr. Gohmert. All right.
    Mr. Hammond. Thank you.
    Mr. Gohmert. And I don't want to announce that publicly 
because of respect----
    Mr. Hammond. I will see you after.
    Mr. Gohmert [continuing]. Privacy, but I have no problem 
letting you know who that is, getting that information for you. 
But because of your position and the positions you have held in 
the past, I have no doubt you will make inquiry.
    And I feel like they will be a lot of people surprised that 
the special treatment AARP was able to get in return for their 
endorsement of the health care bill. But I see my time has run 
out but the problems are so varied and the seniors so 
vulnerable, and it is so widespread across state lines.
    It is going to take a lot of work from a lot of different 
entities, including working with the states. Maybe with a model 
law that they can pursue with regard to types of guardianship 
to help prevent, because obviously as health care has gotten so 
good in keeping bodies alive and not quite as good in keeping 
the minds as alert, it is a bigger problem than it has ever 
been, seniors being taken advantage of.
    And it is heartbreaking to watch it happen, which I have 
seen in family situations and hope we will be able to do some 
good here. Thank you.
    Mr. Scott. Thank you.
    Gentleman from Texas, Mr. Poe?
    Mr. Poe. Thank you, Mr. Chairman. Thank you for holding 
this hearing. I want to thank all of you for being here, 
especially Ms. Ring coming up here and bringing your victims 
posse with you up here today and who are in the audience and 
all of the information that you gave us in this notebook.
    I know that this is a book in work because there are 
thousands of more stories besides the 1,000 cases you have in 
here. It seems to me that we as a society, we have to be 
especially sensitive to the most vulnerable among us.
    And it has always been the children and the elderly. They 
are the most vulnerable to predators, snake oil salesmen, 
thieves, bandits, criminals and all of the scams we all have 
heard about.
    And I think we are doing a better job of taking care of 
children, especially with violent crime. But all of us are 
going to be seniors. We are going to be taking care of seniors, 
maybe both. And it seems to me that we just let them kind of, 
you know, fade into the sunset. That is my opinion.
    The thieves know that they can in many cases just outlive 
the victim and that is why they offer them prey. But I think 
also our society allows them to be easy prey because as you 
have said, Ms. Ring, when a senior, an elderly person is 
scammed, sometimes they don't want to report the crime because 
all of a sudden then some judge appoints a guardian over them 
and then they don't have any decision power.
    And many times, it appears that due process does not occur 
on that decision. Go before a judge, some family member says 
they are not competent to make a decision, might need the 
guardian. And then the estate pays for everything, but the 
elderly person becomes the victim of not just loss of money but 
loss of dignity, loss of everything.
    Ms. Ring. Everything.
    Mr. Poe. And the scam artists know that, so that is why 
they prey on them. I am not sure what we can do but you being 
here raises the awareness of this problem because we are all 
going to be elderly, at least we hope we are.
    And we hope, you know, to be able to take care of our loved 
ones as well without somebody coming in and trying to, you 
know, rip them off, whether it is criminals or lawyers or the 
courts or anybody else, legitimate salesmen. What do you think 
we could do now in the Federal level, Ms. Ring?
    Ms. Ring. Well, first off I think that guardianship is also 
a national issue because of the civil rights issues, Federal 
issue. And also Federal dollars are at stake. These guardians 
are taking the Social Security dollars.
    They are taking the Federal matching Medicaid dollars that 
they end up--spent the last 5 years taking care of my foster 
mother. Some of that money is coming from the Federal 
Government.
    I have a couple of suggestions. It may be considered 
radical, but they are my suggestions. One is I think that there 
are thousands and thousands of people out there that nobody 
knows where they are, who they are. You go to the courts and 
well, we are not sure who is in guardianship. Where are they?
    I mean it might sound farfetched, but you could turn this 
into almost a sophisticated form of identity theft. You become 
that person, essentially they don't have rights. They can't say 
anything. You spend their money. You don't even know where they 
are.
    And for years and years and years everybody sat around and 
said we have got to monitor, we have got to monitor, we have 
got to monitor. Well, let us start monitoring. Now I am a 
technologist, so my suggestion is a bit of a technological 
solution here but I think we might be able to help these states 
do a little monitoring.
    We could have what is called the Office of the National 
Guardian, not to run guardianships but to have a database. And 
when somebody goes into guardianship, since you are going to 
take away their Federal and constitutional rights, I think let 
us put them in a database. Find out who their guardian is and 
maybe make a record of what their inventory was the day they 
went in.
    And then let us tell these guardians out there to go ahead 
and on a quarterly basis--we have a vested interest. There are 
Federal dollars at risk and if they are not at risk right now, 
they are going to be right around the corner when this person 
goes broke. So we want to know quarterly or every 6 months, you 
know, what your inventory looks like.
    We are not asking for details. Now, the beauty of this 
solution is that it can help the states because the little 
database like this can be very cheap put it together. They can 
do online like they do SSI.
    I am an SSI designated payee. It doesn't cost me much to do 
my annual accounting. So they put this in, and what this 
database can do is it can do little red flag reports and a 
little bit of trending analysis.
    And you can kind of see what is coming down the pipe with 
all these baby boomers. Plus on top of that, the states that 
can't seem to figure out, you know, where these people are that 
lost all these rights, we could help them have access to this 
system where the state could get the automated tools that they 
don't have today.
    This is just one of my ideas. It is in my report. I am sure 
it takes a lot more thought than that but I will bet you when 
the thing starts kicking out that guardian number X in state 
number X, county such and such has 2,000 wards that he is 
taking care of, you know, with however much, you know, that, 
you know, red flags might go out here. And I think that we can 
also help to ensure protection. That is just one of my 
suggestions.
    The other one is I think we have to take the money out, 
because if you follow the money, the crime defines itself. It 
should--a person becoming incompetent should not become a 
money-making business for anybody. We should be able to lend a 
helping hand and be good Samaritans and help the fellow next 
door.
    And another thing we have to do is we need to make it 
affordable for people like me and people like you to help your 
mom or your dad. They are telling me I have to be a--I have to 
hire a lawyer now after I am already broke and already lost 
everything. My mom lost everything, my foster mom. I am trying 
to take care of her, but I have to hire a lawyer to be 
represented to go and file my accounting.
    We have got to make it easier to give a helping hand. And 
we make it easier to give a helping hand, you take all the 
bureaucracy and money out of this, people will help each other. 
They are not all bad out there, you know. Those are just some 
of my thoughts, sorry. I know I rambled there.
    Mr. Poe. I knew I would only get one question, Mr. 
Chairman. So I will yield back my time.
    Mr. Scott. Do you have other questions?
    Mr. Poe. Well I do have--thank you, Mr. Chairman.
    Mr. Hammond, I just had a couple of questions. You have a 
$1.3 billion budget at AARP, is that correct? How much of that 
money percentage-wise is spent on elder abuse information being 
disseminated to your members?
    Mr. Hammond. I don't have that exact number but I can 
certainly get it for you.
    Mr. Poe. It is not very much, is it?
    Mr. Hammond. I really don't know, sir.
    Mr. Poe. Let me ask you this, AARP is also in the insurance 
selling business----
    Mr. Hammond. That is not quite correct, sir.
    Mr. Poe. Well, we both know that you sell insurance, 
supplemental insurance.
    Mr. Hammond. Pardon me, Congressman, we do not sell any 
insurance.
    Mr. Poe. You broker selling of insurance?
    Mr. Hammond. We do not broker selling of insurance.
    Mr. Poe. So when people sign up with AARP to get insurance, 
who are they buying it from?
    Mr. Hammond. They do not sign up with AARP. They sign up 
with our insurance providers. We endorse insurance because of 
the value it gives our members.
    Mr. Poe. Okay. To me that just seems like that is a way of 
hiding the truth that you provide supplemental insurance. But 
it is not really in your name, it is in their name. Now don't 
you think that is a conflict of interest to have AARP 
advocating on behalf of the elderly, who we all just love and 
want to take care of.
    And all of a sudden they are getting endorsed insurance 
solicitations through the mail through AARP endorsed, although 
they are not AARP insurance companies. Does that seem like a 
conflict of interest to you?
    Mr. Hammond. No, sir.
    Mr. Poe. Can you see how it would seem like a conflict of 
interest to some senior citizen, like my parents, who are both 
85 years old, and they think you sell insurance.
    Mr. Hammond. And we try very hard to disabuse them of that 
thought because we do not sell insurance, sir.
    Mr. Poe. All right, you endorse insurance companies----
    Mr. Hammond. That is correct.
    Mr. Poe [continuing]. You solicit insurance through your 
mailing list.
    Mr. Hammond. Excuse me----
    Mr. Poe. It just seems--just a minute, I am talking.
    Mr. Hammond. Go right ahead.
    Mr. Poe. It just seems to me it is a conflict of interest. 
And if you really want to just take care of the elderly, you 
just take care of elderly and be an advocate for the elderly 
down here at this rather than being an advocate for health care 
reform. How much did you all spend on lobbying for health care?
    Mr. Hammond. I have no idea, sir. I can get you the 
information, but I thought we were----
    Mr. Poe. Okay.
    Thank you, Mr. Chairman, and I will yield back.
    Mr. Hammond. Mr. Chairman.
    Mr. Scott. Mr. Hammond?
    Mr. Hammond. I was under the impression today that we were 
here testifying to help the elderly on this bill.
    Mr. Poe. We are, and if you divest yourself of your 
insurance, maybe that will help the elderly, that was my point. 
But you disagree with me on that is that true?
    Mr. Hammond. Yes, sir, I do.
    Mr. Poe. Okay.
    Mr. Scott. Ms. Ring, you mentioned the importance of doing 
something like guardianship. Some states have what is called 
durable powers of attorney, I know Virginia does. Would that 
not solve a lot of the problems if people would sign those 
before they get ill?
    Ms. Ring. Well, you raise a valid point because now there 
are a lot of durable power of attorneys out there are that are 
pretty much thrown like confetti to the wind in the 
guardianship courts.
    They ignore them, and I will give you one example. A woman 
in Massachusetts--I am sorry, a women, her niece lives in 
Massachusetts, and it is in my petition here.
    I talked to her husband. She wanted to do everything right. 
She was afraid she was going to go into guardianship. So she 
signed I want my niece to be my power of attorney. I want her 
to be my guardian. I am going to do my will.
    Everything like lined up in a nice little book in her 
house. The family stayed in touch. About, I think it was last 
Memorial Day she got put into guardianship in the state of 
Florida. They had the book right there in the courtroom, who 
she wanted her guardian to be, who she wanted her power of 
attorney to be. They never even called the niece.
    They did an emergency hearing, put the lady in 
guardianship. And put a paid guardian in place, okay, I am not 
going to use the work professional, I am just going to say paid 
guardian because they don't act real professional some of them.
    So this is what is going on. I meant to mention that 
earlier, the advance directives of senior citizens are being 
ignored, absolutely.
    Mr. Scott. But the state law differs from state to state. 
Some states there is--are there any states that do not have 
durable powers of attorney? I know the law in Virginia used to 
be that once you became incompetent that the power of attorney 
terminated at that point.
    We now have in Virginia the ability to sign a power of 
attorney if you specifically say that the power extends into 
incompetence that it will--you can be incompetent, and your 
person or the power of attorney can continue to act on your 
behalf, without the guardianship and all this other stuff. I 
suspect some states don't have that.
    Ms. Ring. Most of them have something like that, and they 
also have the ability to designate a pre-need guardian that 
says if I ever need a guardian here is who I want.
    I do actually have a suggestion for that and again you guys 
are the experts, so I will defer to you. But I know one time in 
our lives when the Federal Government has our undivided 
attention.
    And that is when you sign up for your Medicare benefits. 
And if you know who you want your guardian to be at that time, 
this is just a thought, okay? And you know who you want your 
power of attorney, and we are going to play this game in the 
court where they are going to say well, Johnny is a bad guy, 
and he can't be in this and that.
    You know, maybe since that is the person who is going to 
handle your Social Security benefits if you get incapacitated, 
give people the option to mention it then. This is the thought, 
you know.
    And that will cut all this chase of playing around about 
who said, he said, she said because the person is competent at 
that time. They don't have to. It is an option. That was just a 
thought. But I think that we have got to start honoring 
people's will.
    And another thing that is very important is an alleged 
incapacitated person has every single right that President 
Obama has, right, because they are not incompetent yet, and yet 
all of their due process rights are being denied.
    Their 14th Amendment right, their rights to their liberty 
and their properties are being deprived of them without due 
process of the law. They do not have attorneys representing 
them. They just take them, put them in guardianship. You don't 
get an attorney.
    And you don't even get notified that you are supposed to 
have an attorney, where the criminal at least gets his Miranda 
rights read to him. These people don't have attorneys 
representing them.
    Mr. Scott. Well in Virginia, I think you have to get some 
kind of notice.
    Mr. Hammond, does AARP have a position on this issue?
    Mr. Hammond. On the guardianship issue?
    Mr. Scott. Right.
    Mr. Hammond. I am sorry, on guardianship issues? Yes, sir. 
We have, and I will be glad to leave this with you if you like.
    Mr. Scott. If we could get that because it is obviously 
based on the testimony we have heard, it is obviously an area 
along with identity theft that we are going to have to look 
into.
    Mr. Hammond. I have some information here that I will be 
glad to leave.
    Mr. Scott. Okay. Thank you. And other questions or 
comments? Well, I would like to thank our witnesses for their 
testimony today, and there may be additional written questions, 
which we will forward to you and ask if you answer as promptly 
as you can to make sure that the answers are made part of the 
record.
    Without objection, the information that has previously been 
referenced will be made part of the record.
    Anything else? Gentleman from North Carolina has his--Mr. 
Coble, will have his statement entered into the record. And 
without objection, the hearing record remain open for 1 week 
for submission of additional materials.
    And without objection, the Subcommittee stands adjourned.
    [Whereupon, at 4:52 p.m., the Subcommittee was adjourned.]

                            A P P E N D I X

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               Material Submitted for the Hearing Record







                                




                                




                                












                                






































                                
































































                                










                                

       Response to Post-Hearing Questions from Thomas C. Nelson, 
                     Chief Operating Officer, AARP

















                                

        Response to Post-Hearing Questions from Latifa S. Ring, 
               Elder Abuse Victims Advocates, Houston, TX