[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
SENIOR FINANCIAL EMPOWERMENT ACT OF 2009
SUBCOMMITTEE ON CRIME, TERRORISM,
AND HOMELAND SECURITY
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
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
SENIOR FINANCIAL EMPOWERMENT ACT OF 2009
SENIOR FINANCIAL EMPOWERMENT ACT OF 2009
SUBCOMMITTEE ON CRIME, TERRORISM,
AND HOMELAND SECURITY
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
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
For sale by the Superintendent of Documents, U.S. Government Printing Office,
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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
H.R. 3040, the ``Senior Financial Empowerment Act of 2009''...... 13
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
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
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
SENIOR FINANCIAL EMPOWERMENT ACT
TUESDAY, MAY 25, 2010
House of Representatives,
Subcommittee on Crime, Terrorism,
and Homeland Security
Committee on the Judiciary,
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
Staff present: Ron LeGrand, Majority Counsel; Kimani
Little, Minority Counsel; and Kelsey Whitlock, Minority Staff
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
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
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
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
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
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
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
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.
[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.
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
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
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 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
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,
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
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
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
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
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
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
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,
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
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
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
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
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.
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,
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
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
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
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
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
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,
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
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
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
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
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
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
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
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
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:
And Ms. Ring asked for the petitions and her whole report
to be in the record. That, too, will be entered without
**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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
Mr. Hammond. That is not quite correct, sir.
Mr. Poe. Well, we both know that you sell insurance,
Mr. Hammond. Pardon me, Congressman, we do not sell any
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
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
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
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
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,
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
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
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
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
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
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