[Senate Hearing 115-678]
[From the U.S. Government Publishing Office]
S. Hrg. 115-678
STILL RINGING OFF THE HOOK: AN UPDATE ON EFFORTS TO COMBAT ROBOCALLS
=======================================================================
HEARING
BEFORE THE
SPECIAL COMMITTEE ON AGING
UNITED STATES SENATE
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
WASHINGTON, DC
__________
OCTOBER 4, 2017
__________
Serial No. 115-10
Printed for the use of the Special Committee on Aging
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
31-486 PDF WASHINGTON : 2019
--------------------------------------------------------------------------------------
SPECIAL COMMITTEE ON AGING
SUSAN M. COLLINS, Maine, Chairman
ORRIN G. HATCH, Utah ROBERT P. CASEY, JR., Pennsylvania
JEFF FLAKE, Arizona BILL NELSON, Florida
TIM SCOTT, South Carolina SHELDON WHITEHOUSE, Rhode Island
THOM TILLIS, North Carolina KIRSTEN E. GILLIBRAND, New York
BOB CORKER, Tennessee RICHARD BLUMENTHAL, Connecticut
RICHARD BURR, North Carolina JOE DONNELLY, Indiana
MARCO RUBIO, Florida ELIZABETH WARREN, Massachusetts
DEB FISCHER, Nebraska CATHERINE CORTEZ MASTO, Nevada
----------
Kevin Kelley, Majority Staff Director
Kate Mevis, Minority Staff Director
CONTENTS
----------
Page
Opening Statement of Chairman Susan M. Collins................... 1
Statement of Ranking Member Robert P. Casey, Jr.................. 2
PANEL OF WITNESSES
Lois Greisman, Associate Director, Division of Marketing
Practices, Federal Trade Commission, Washington, DC............ 4
Honorable Josh Shapiro, Attorney General, Pennsylvania Office of
Attorney General, Harrisburg, PA............................... 6
Kevin Rupy, Vice President, Law and Public Policy, USTelecom,
Washington, DC................................................. 8
Genie Barton, President, BBB Institute for Marketplace Trust,
Arlington, VA.................................................. 9
Prepared Witness Statements and Questions for the Record
Lois Greisman, Associate Director, Division of Marketing
Practices, Federal Trade Commission, Washington, DC............ 26
Questions submitted for Ms. Greisman......................... 48
Honorable Josh Shapiro, Attorney General, Pennsylvania Office of
Attorney General, Harrisburg, PA............................... 58
Questions submitted for Mr. Shapiro.......................... 64
Kevin Rupy, Vice President, Law and Public Policy, USTelecom,
Washington, DC................................................. 66
Questions submitted for Mr. Rupy............................. 67
Genie Barton, President, BBB Institute for Marketplace Trust,
Arlington, VA.................................................. 71
Questions submitted for Ms. Barton........................... 83
Additional Statements for the Record
Chris Drake, Chief Technology Officer, iconectiv, letter to
Senators Collins and Casey..................................... 88
STILL RINGING OFF THE HOOK: AN UPDATE ON EFFORTS TO COMBAT ROBOCALLS
----------
WEDNESDAY, OCTOBER 4, 2017
U.S. Senate,
Special Committee on Aging,
Washington, DC.
The committee met, pursuant to notice, at 9 o'clock a.m.,
in room 562, Dirksen Senate Office Building, Hon. Susan M.
Collins, Chairman of the Committee, presiding.
Present: Senators Collins, Fischer, Casey, Nelson,
Gillibrand, and Donnelly.
OPENING STATEMENT OF SENATOR SUSAN M. COLLINS, CHAIRMAN
The Chairman. The Committee will come to order. Good
morning.
A couple of years ago, one of my most valued staff members
retired after more than 30 years of public service. She served
as Staff Director right here on the Senate Aging Committee,
where she organized many hearings examining robocalls and
senior fraud. She tells me, however, that it was not until she
retired, and is now home during the day, that she fully
realized the problem of robocalls. From morning until night,
she says her phone rings, often with threatening scam artists
on the other end of the line.
When Congress created the national Do Not Call registry 14
years ago, we hoped that it would end this flood of unwelcomed
phone calls. Despite some initial success, phones are still
ringing off the hook. Last year, Americans received an
estimated 2.4 billion unwanted calls each and every month. That
is about 250 calls a year for every household in the country.
My husband and I received so many on our landline in Bangor
that we discontinued the landline.
This morning, we will look at why Americans who have signed
up for the Do Not Call Registry are still getting annoying,
unwanted phone calls on both their landlines and their cell
phones, and we will explore what can be done about it. We will
focus especially on the importance of education, enforcement,
and call-blocking technologies.
In previous hearings on this topic, we learned that changes
in technology have made it possible for scammers operating
overseas to use automated dialing, or robocalls, to reach
victims here in the United States. This was not feasible in
2003. At that time, phone calls were routed through
telecommunications equipment that was complicated to operate.
This made high-volume, automated calling difficult and
expensive, particularly for international calls. Also, older
equipment could not be used easily to disguise or spoof a
caller ID. But now phone calls can be routed from anywhere in
the world, at practically no cost, using so-called Voice Over
Internet Protocol technology, or VoIP.
Combined with simple computer apps, criminals can use VoIP
to generate millions of robocalls to cast a wide net in their
hunt for victims. They can even spoof the number displayed by
caller ID to hide their true identity, making it more likely
that their intended victim will pick up the phone.
But just as technology has enabled these frauds, it can
also be used to fight back. Today we will learn about
technologies consumers can use to block illegal robocalls. We
will also hear about the Robocall Strike Force, a collaboration
between telecommunications and technology companies that are
working together on ways to identify robocall traffic at the
network level, and block it before it even reaches the
consumer. We will assess whether or not the telecoms are doing
enough, quickly enough, to protect their customers.
Aggressive law enforcement is also key to stopping illegal
robocalls. In a case brought by the Department of Justice last
year, dozens of individuals, operating through call centers in
India, were indicted for allegedly defrauding tens of thousands
of Americans out of hundreds of millions of dollars, using the
notorious IRS impersonation scam. That is the most commonly
reported scam to our Committee's Fraud Hotline.
Our own data show that these arrests had a real impact.
Prior to the arrest, nearly three out of every four calls to
our hotline involved the IRS impersonation scam. But in the
three months after the arrest, reports of the scam dropped an
incredible 94 percent. Though the numbers have since rebounded
somewhat, they are still far below the levels we have seen in
the past. The point is that law enforcement works. It deters
others from committing the crime.
If we are going to win this fight, we need to better our
understanding of these con artists and their scams and how they
operate. What we learn will help inform those who are most at
risk, particularly our older Americans, so that they do not
fall victim to these scams.
The witnesses who are testifying today have invaluable
insights, and I look forward to hearing their testimony.
It is now a pleasure to turn to the Ranking Member Casey
for his opening statement.
OPENING STATEMENT OF SENATOR ROBERT P. CASEY, JR., RANKING
MEMBER
Senator Casey. Chairman Collins, thank you very much for
calling this hearing today. This issue of robocalls is personal
to many people in this room. In fact, just recently, a con
artist, likely using robocalling technology, contacted my wife,
demanding money. She knew to hang up the phone. I am not sure
if she said something in the course of hanging up--I did not
get that information--but then she, of course, reported it to
one of the Aging Committee's Fraud Hotline personnel. That
would be me.
[Laughter.]
Senator Casey. But that is not atypical across the country.
All too often, unsuspecting individuals fall victim to these
same con artists. Worse yet, we know that certain types of
scams may target older adults, specifically, or may have a
disproportionate impact on them.
At our February hearing on scams, we heard about an 80-
year-old from Montgomery County. Her name is Arlene, and it
happens to be the Montgomery County in Pennsylvania, not
Maryland. Arlene was scammed out of more than $800,000 through
calls she received, claiming that she won an international
lottery. We all have a sacred responsibility to do more to
ensure that con artists do not scam our loved ones out of one
more penny of their nest eggs.
This is going to take continued commitment at the federal,
state, and local levels, and among others, including those in
the telecommunications industry. For example, the Senate
recently passed the Elder Abuse Prevention Act. This bill
provides law enforcement officials with the tools to prosecute
con artists and bring perpetrators to justice. The House should
pass this bill without delay.
The FCC has proposed a rule that will help to deter con
artists from disguising themselves as a government agency or a
local business, in an effort to entice someone to answer the
telephone. Thieves should not be able to spoof the phone
numbers that all of us know and answer every day. It has been 8
months since the rule was proposed by the FCC. This rule should
be finalized and implemented immediately, and education and
awareness are also a key part of this.
I spent the month of August going across Pennsylvania, to
32 counties, and had the chance to visit with many older
Pennsylvanians. We discussed issues that range from Medicare to
Meals on Wheels. But when I spoke about the Committee's work on
fraud and scams, I asked folks in the audience to raise their
hand if they had ever been contacted by a con artist. Nearly
every hand in the room went up.
Keeping people informed of these scams and the latest
methods of con artists goes a long way to preventing seniors
from ever falling victim. We have a lot of complicated issues
to tackle here in Congress, but this is not one of those
complicated issues. To the scammers out there, we say this:
Your time is up. You will not steal one more penny from seniors
without suffering the consequences.
I look forward to hearing from our witnesses today about
what more we can be doing, collectively, to ensure that older
Americans do not lose that one more penny to thieves falsely
claiming to be the IRS or a grandchild in need of rescuing.
On a logistical note, I do want to thank Chairman Collins
for starting the hearing 30 minutes early. This morning, as she
knows, I have a Finance Committee hearing that is marking up a
bill to extend the Children's Health Insurance Program, which
expired over the weekend, and must be reauthorized in order to
ensure that millions of young children are not without
coverage. In order to express my support for that program I
will be leaving the hearing briefly to go to that, but I will
be back.
So, Chairman Collins, thank you for doing this so early. It
is a record early start for a hearing here in the Senate. Thank
you.
The Chairman. Senator Casey, I was very glad to accommodate
you. I know how important it is to get the CHIP program
reauthorized. I was a very early supporter and co-sponsor of it
many years ago, and I hope it will slide through the Committee,
with your help.
We now turn to our panel of witnesses. First we will hear
from Lois Greisman, Associate Director of the Division of
Marketing Practices of the Bureau of Consumer Protection at the
Federal Trade Commission. She has testified many times before
our Committee on various issues involving consumer fraud and we
welcome her back today.
I would now like to call on Senator Casey to introduce the
next witness, who is from his home state.
Senator Casey. Thank you, Chairman Collins. I am pleased to
be introducing Josh Shapiro, the Attorney General for the
Commonwealth of Pennsylvania, someone I have known for a long
time, someone who has a deep commitment to public service,
someone of great integrity. His work as attorney general has
focused on educating and protecting seniors from unfair health
care practices, financial exploitation, fraud and scams, and
that is just the beginning of the work that he does.
Under Attorney General Shapiro's leadership, the office's
Senior Protection Unit has committed increased resources and
energy to addressing complaints from seniors and conducting
grassroots education for seniors in every community.
I would like to thank the Attorney General for making the
trip to DC today from Pennsylvania, and I look forward to his
testimony. Thanks, Josh.
The Chairman. Thank you, and I welcome you as well.
Next we will hear from Kevin Rupy, who is Vice President
for Law and Policy at USTelecom, located right here in
Washington. USTelecom is the industry trade association
representing most of the major telecommunication carriers as
well as some of the smaller, rural carriers.
And finally we will hear from Genie Barton, President of
the Better Business Bureau Institute for Marketplace Trust, in
Arlington, Virginia.
We welcome you all and we will start with Ms. Greisman.
STATEMENT OF LOIS GREISMAN, ASSOCIATE DIRECTOR, DIVISION OF
MARKETING PRACTICES, FEDERAL TRADE COMMISSION, WASHINGTON, DC
Ms. Greisman. Thank you and good morning, Chairman Collins,
Ranking Member Casey, members of the Committee. I am Lois
Greisman with the Division of Marketing Practices at the
Federal Trade Commission. I am honored to have the opportunity
to return before this Committee to discuss the FTC's work to
fight illegal robocalls, including those that harm seniors.
As you have stated, all of us, the entire country, is
keenly aware of the robocall problem, namely unwanted, abusive
telephone calls, disturbing consumers' privacy, and frequently
using fraud and deception to pitch goods and services which
cause significant harm. None of us has been immune from these
illegal calls, and the steady and sharp rise in our complaint
numbers reflects consumer frustration and resentment.
Since the start of 2017, on average, every single month,
the FTC receives 400,000 complaints about robocalls. That is a
daunting number. But the complaints are truly valuable to law
enforcement. We mine the data. We use it to identify bad actors
and to build out our enforcement cases. Further, the complaints
are also valuable to carriers and to third parties who use them
to assist in their call-blocking efforts. As noted in the
testimony, the Commission now is releasing its data to the
public on a daily basis, some 25,000 telephone numbers each
business day, with additional information on the date and time
of the call.
In response to illegal robocalls, the Commission continues
to deploy its full range of resources, law enforcement
advocating technological solutions, and, of course, robust
consumer and business education. Our law enforcement efforts to
combat all Do Not Call violations, which include robocalls, are
unabated.
Since 2004, when we started enforcing Do Not Call, no less
than 131 enforcement actions have been filed against 163
companies and 121 individuals. So far, 124 of those cases have
been resolved. And I want to emphasize that many of the recent
cases we have brought have stopped individuals and companies
that have been placing literally billions of illegal robocalls.
Now while telemarketers are happy to abuse and take money
from consumers of all ages, we have seen some that appear to
target or disproportionally impact older consumers. For
example, one telemarketing fraud we recently shut down
specifically promoted debt elimination programs to help seniors
eliminate their debt.
These cases can be challenging, as defendants seek to evade
detection by using caller ID spoofing, and we have sued call
centers operating abroad, running, for example, government
imposter scams to con consumers into paying hundreds of dollars
for taxes or debt they do not owe.
And, of course, not all illegal telemarketing is conducted
by scammers. The recent and historic $280 million civil penalty
order against DISH network shows that even some legitimate
companies fail to abide by the law. That litigation dates back
to 2009, when the Department of Justice filed the case on
behalf of the FTC and four state co-plaintiffs.
We know that sustained law enforcement alone will not stem
the tide. Through no less than four robocall contests, the FTC
has spearheaded efforts to develop technological solutions to
the robocall problem. Real progress is being made. For the past
several years, the FTC encouraged carriers and others simply to
develop call-blocking technologies. We met with a good deal of
resistance and we worked hard to address many valid concerns.
Today, however, we now have a good number of call-blocking
tools in the marketplace and the discussion has shifted
somewhat to best practices for call-blocking and related
issues, many of which are teed up in the recent FCC Notice of
Proposed Rulemaking and Notice of Inquiry. This is an important
shift in the debate, and it reflects meaningful progress. But
we remain miles behind providing the level of protection
against unwanted calls that consumers deserve.
Our work is ongoing. This very week we are meeting again
with industry members, technologists, and others from the
international community to address robocalls and promote
technological advancements.
Finally, and often with assistance from your offices, the
FTC continues to push out a large quantity of high-quality
educational messages to all. Just this past Monday, we issued
an FTC blog providing important information on call-blocking.
So to sum up, while I am very proud of the work the FTC has
done to curb illegal robocalls, we know we still have a
significant consumer protection problem, and I commit to you
that we will not let up our efforts to curb these abusive
calls.
Thank you. I look forward to your questions.
The Chairman. Thank you. Attorney General Shapiro.
STATEMENT OF THE HONORABLE JOSH SHAPIRO, ATTORNEY GENERAL,
PENNSYLVANIA OFFICE OF ATTORNEY GENERAL, HARRISBURG,
PENNSYLVANIA
Mr. Shapiro. Thank you, Chairman Collins, Ranking Member
Casey, Senator Gillibrand, members of the Committee. It is an
honor to be with you and I am grateful for your attention to
this important matter. Forty-seven million seniors in this
country, representing roughly 17 percent of the population in
Pennsylvania, makes this, combined with the threats against
seniors, a top priority for mine, as Pennsylvania's Attorney
General.
Senior citizens are specifically targeted for fraud and
scams more than any other age group, and the data shows that,
and seniors today are more easy to reach than ever before, with
67 percent of seniors online, and this generation of seniors
actually representing the wealthiest generation of seniors as
compared to the war babies generation and others, making them a
prime target for access and availability of resources that can
be scammed.
The combination of scammers' greed and seniors'
vulnerability has resulted in significant financial losses for
Pennsylvania's elderly and America's elderly. Over a third of
seniors have experienced some form of fraud and financial
abuse, including scams, and the average senior loses $36,000
per scam.
The Pennsylvania Office of Attorney General dedicates
significant resources to combating these types of scams and for
consumer protection. We receive 20,000 complaints each year
from Pennsylvanians, and the most common complaint, Madam
Chair, that we receive, is from seniors about violating the Do
Not Call list, or telephonic scams.
IRS impersonation scams are at the top of that list, where
they call people and falsely claim to represent the Internal
Revenue Service. The callers will claim that, say, back-taxes
are owed by the recipient. They threaten to have them arrested
and demand payment, typically via wire transfer. Last year, my
office received 881 complaints about IRS impersonation scams,
62 percent of which were targeting seniors.
Fortunately, Pennsylvanians are typically able to recognize
those calls as fraudulent. In the past, it really helped to
know that the IRS did not call people about their taxes and
they only sent letters. However, in April, Congress authorized
the IRS to begin contracting out some of its debt collection
work to private debt collectors who do, in fact, make phone
calls, and take away this defensive knowledge.
I want to share with you one story of a case that we are
currently working on, and because we are currently working on
it, Madam Chair, I will not share the person's name. We will
call him John.
In May of this year, agents in my office received a
complaint from a man in the Pittsburgh area, in western
Pennsylvania. Again, I will call him John to protect his
identity, as this investigation is ongoing. John received a
call from a 1-866 number, who claimed to be an IRS employee.
The caller said that an arrest warrant had been issued for John
because he sends money to his wife and child in a foreign
country. The purported IRS employee then said that John would
soon receive a call from the local police department and
instructed him on how to merge the calls together.
Shortly thereafter, John received a call from a number, and
the caller ID showed that it was actually someone calling from
the Pennsylvania State Police. The callers then, together,
threatened John and said his only way out of this situation as
to send money to help pay for an investigation to clear his
name. John then, through a series of wire transfers, ultimately
sent $13,500 of his hard-earned money to these scammers.
Unfortunately, these kinds of cases are very, very
difficult to prosecute. Criminals hide behind these spoofed
phone numbers, using shady financial transactions, leaving
little for law enforcement, here in the state or federally, to
work with. That is why one of the best approaches we find is
preventative education, and the preventative education aspects
of what we do, I am happy to discuss later on in question-and-
answers.
But recognizing, Madam Chair, the limited time we have, I
would like to close by suggesting two reforms that this
Congress, again, respectfully, might consider that would help
us do our job better.
First, prevent IRS debt collectors from calling in the
first place. As I mentioned earlier, we used to be able to tell
seniors that if anyone was calling you claiming to be from the
IRS, hang up immediately because it is a scam. I would
respectfully request to this Committee that you carefully look
at the effects of permitting debt collectors, working on behalf
of the IRS, to make telephonic calls to people whom they are
collecting debts.
And second, Madam Chair, I would ask that we give telephone
companies the tools to block scammers. Seventy-five percent of
consumers who file fraud-related complaints, and reported how
the fraud was perpetrated, indicated that they were contacted
by the telephone. That is why the Federal Government needs to
give telephone service providers the ability to block the kind
of spoofed calls that targeted John in the story I shared with
you before.
Look, we have Do Not Call lists, and often times seniors
will say to me and Senator Casey, when we are back in
Pennsylvania, ``But they still called.'' Well, that is because
scammers do not pay attention to the law, and when they can use
these spoof technologies to get around it, it is very
troublesome.
I know Senator Casey shares my views on this issue. He and
I, later today, will be sending a joint letter to the FCC to
ask them to implement their proposed rule without further
delay. It is also something that 29 attorneys general joined
together in a bipartisan basis to appeal to the FCC to allow
these telephone companies to block these spoofed calls.
Madam Chair, there is much to cover and a lot more in my
prepared testimony, but mindful of the time I will yield at
this moment and look forward to your questions. Thank you again
for having this hearing.
The Chairman. Thank you very much, and the case that you
described, it is very similar to one that we had in Portland,
Maine, and highlighted at a previous hearing, where the spoofed
number was from the Portland Police Department, right after the
IRS impersonation call had come through. That second call is
what convinced the individual to part with his money. So I
appreciate your mentioning that.
Mr. Rupy.
STATEMENT OF KEVIN RUPY, VICE PRESIDENT, LAW AND PUBLIC POLICY,
USTELECOM, WASHINGTON, DC
Mr. Rupy. Chairman Collins, Ranking Member Casey, members
of the Committee, thank you for giving me the opportunity to
appear before you today.
My name is Kevin Rupy and I serve as Vice President of Law
and Policy at USTelecom. Over the last several years, USTelecom
and our member companies have been tremendously focused on the
robocall issue, and we share the Committee's concern about the
problems associated with phone-based imposter scams targeted at
seniors.
Calls using VoIP technology, when combined with caller ID
spoofing, can be used by scammers to mask their identity and
location, giving their target a false sense of confidence about
who is calling.
In this ongoing battle against criminal robocallers, there
have been three important developments over the last year that
are particularly significant.
First, the industry-led, ecosystem-wide Robocall Strike
Force issued its report to the FCC on October 26, 2016. Follow-
up reports by the industry groups, continuing the work started
by the Strike Force, were delivered to the FCC on April 28,
2017. The reports note that the SHAKEN/STIR standards
development for the next generation of robocall mitigation
tools have been accelerated by six months. These standards,
which incorporate caller ID authentication capabilities into
the network and consumer devices, have entered the industry
testing phase. Some of the initial testing of the SHAKEN
standard is expected to complete later this year, with
additional potential deployments anticipated as early as 2018.
The reports also highlight the increasing number of tools that
are being developed and actively deployed to consumers by a
growing number of national voice and device providers.
Finally, the reports detail the efforts of USTelecom's
Industry Traceback Group, which is comprised of a broad range
of network providers from several industries, who are working
collaboratively to identify the origin of these calls at their
source.
Industry's strong commitment to this effort can be seen in
its significant growth over the last year, from three carriers
in July 2016, to 22 carriers as of today. The goal of this
group is to identify the source of the worst of these illegal
calls and further enable enforcement actions by federal
agencies. In this regard, we applaud the FCC's three
enforcement actions since June of this year that have resulted
in more than $200 million in proposed fines targeting
perpetrators of illegal robocalling, as well as the
complementary enforcement actions by the FTC.
Second, the reports show that USTelecom member companies,
independent application developers, and a growing number of
diverse companies offer services today that can help older
Americans reduce unknown and potentially fraudulent calls. For
example, AT&T has launched its Call Protect service that allows
customers with iPhones and HD Voice-enabled Android handsets to
automatically block suspected fraudulent calls. Verizon has
been trialing a service that warns its wireline customers about
calls identified as suspicious, and on the wireless side has
deployed robocall mitigation features as part of its Caller
Name ID service. And various carriers have worked with NoMorobo
to facilitate their customers' ability to use that third-party
blocking service.
Third, the FCC recently published a rulemaking in which it
proposes to clarify rules for when voice providers may block
certain types of calls. USTelecom supports the proposed rules
and has participated fully in the proceeding. One issue the FCC
raises is what protection legitimate callers should have if
their calls are blocked due to the inappropriate scoring of
that call. It is an issue USTelecom and other parts of the
robocall scoring ecosystem have been wrestling with for years,
and this fall we are hosting a workshop aimed at helping
develop best practices for the scoring and labeling of calls.
All these recent developments further demonstrate the
essential commitment from a broad range of stakeholders that
will be necessary to effectively mitigate and defeat these
scammers. Industry stakeholders from a wide range of companies
have advanced a concerted, broad-based effort focused on
developing practices, technologies, and methods for mitigating
phone-based attacks and scams. This coalition has also expanded
its cooperation with equally important stakeholders within the
Federal Government and with consumer groups. While our partners
in government play a crucial enforcement role, our partners in
consumer organizations are vital to raising awareness about the
tools available to consumers to help mitigate illegal
robocalls.
In closing, let me again thank the Committee for holding
this timely hearing. We share the Committee's concerns and we
look forward to our continued work together to address this
constantly evolving challenge.
The Chairman. Thank you. Ms. Barton.
STATEMENT OF GENIE BARTON, PRESIDENT, BBB INSTITUTE FOR
MARKETPLACE TRUST, ARLINGTON, VIRGINIA
Ms. Barton. Chairman Collins, Ranking Member Casey, members
of the Committee, thank you for giving me the opportunity to
appear before you today.
I am Genie Barton and I serve as President of the BBB
Institute for Marketplace Trust. We are the 501(c)(3)
educational arm of the Council of Better Business Bureaus, the
umbrella organization of the more than 100 BBBs serving
communities across North America.
Our mission is to advance trust in the marketplace, by
protecting consumers and promoting ethical business practices.
Scams not only cost the American economy around $50 billion
each year, they erode trust, humiliate their victims, and
litter our daily lives.
In this testimony, I will summarize BBBI's insights about
scams that prey on seniors, especially those initiated by
robocalls. The data that I will share are derived from Scam
Tracker, our crowd-sourced, interactive, online tool that
collects consumers' own reports of actual scams and presents
them in a searchable, online heat map. Scam Tracker shows
consumers the number and types of scams in their communities,
and provides a view into the changing scam landscape to all.
The data are shared with the FTC for inclusion in the Consumer
Sentinel data base, the National Cyber Forensics and Training
Alliance, and law enforcement agencies for investigative
purposes, on request.
Our two recent white papers have shattered stereotypes
about scams. In cracking the invulnerability illusion, we found
that millennials, who think only old and gullible people are at
risk, are, in fact, the most scammed, while seniors, who know
that they are at risk, are less likely to be scammed. The cost
to seniors, however, is much higher. When scammed, seniors
suffer nearly 56 percent higher financial losses from scams
than any other demographic. Because many retirees live on a
fixed income, older people can be harder hit than others by
scams.
In our other white paper, the Scam Tracker Risk Report, we
introduced the BBB Risk Index, which replaces a risk assessment
by frequency alone of exposure with a new three-dimensional
model--exposure, susceptibility, and monetary loss. This
provides a more meaningful measure of the relative risk of a
scam and can help inform policy choices and resource
allocation.
Based on the Risk Index, the 10 riskiest scams for seniors
are fake family friend emergencies, tech support, sweepstakes
lottery prizes, travel vacations, investment, foreign money
exchange, home improvements, online purchases, tax collection,
and fake check money orders. For seven out of these 10 scams,
the method of initial contact was a telephone call, often
initiated by a robocall.
Of all the scams reported by seniors aged 65, 71 percent
began with a call. Fortunately, just 33 percent of those calls
involved monetary loss, according to our data. The highest
percentage of robocall scams for seniors were ``can you hear me
now?'' scams, at 34 percent, but losses were extremely low.
The tax collection, or IRS scam, represents 20 percent of
all robocall, robo-initiated scams. In 2016, approximately 27
percent of all scams reported to us by seniors, and 16 percent
of scams across all age groups, were tax collection scams.
While only one in 278 of these reports involved a dollar loss,
the median loss of $3,000 for seniors is higher than for any
other demographic.
As I close, let me say that Scam Tracker, along with our
other programs focusing on consumer protection and financial
and digital literacy, help us to take the pulse of the
marketplace and empower consumers to recognize the red flags
that scams and deceptive practices perpetrate.
Thank you very much for inviting me to be here today to
share our data, our messaging, and our outreach, to help fight
back against the scourge of scams. I would be pleased to answer
any questions you may have.
The Chairman. Thank you very much.
Senator Casey, I know that you have to leave. Would you
like to ask a question before you do so?
Senator Casey. I appreciate that, Madam Chair. I will maybe
just get one question in I wanted to ask Attorney General
Shapiro, with regard to the FCC. As you know, the FCC has
proposed a rule--we mentioned that earlier--that will help curb
spoofing and make it a bit harder for con artists to disguise
themselves. Earlier this year, the two of us wrote separate
letters to the FCC requesting the proposed rule be finalized,
and later today we will be sending a joint letter asking for
the same.
Why do you believe this rule is so important at this time,
to have it implemented, and how will it help you in your work
as attorney general, attacking these schemes?
Mr. Shapiro. Well, Senator, thank you for your question,
and also, again, thank you for your leadership in this area.
Look, scammers are only successful if they can pretend to
be someone else, right? We know that these scams have a 0.5
percent success rate, so we know that the combination of
education and outreach, the good work that this Committee and
others are doing to make seniors aware of these kinds of scams,
it is working. But still, this 0.5 percent, because of just the
sheer magnitude, the sheer volume of the number of calls, is
something that ultimately is still hitting a lot of seniors in
Pennsylvania and across the United States.
I spoke about the example of the John case in the
Pittsburgh area here in Pennsylvania. We need, in law
enforcement, to have all of the tools necessary to stop this.
Senator, I will share with you that we issued 2,141
subpoenas last year, in cases involving these kinds of calls.
It only resulted in four legal actions. Part of that is because
the spoofing technology is so difficult to penetrate, it is so
difficult for us to get to the bottom of, that it becomes very
hard to trace it back to the scammers, and ultimately prosecute
them. And we are working incredibly hard at this, as I know my
colleagues are around the country as well, and it has still
only resulted in four actions.
If the FCC gives the telecom companies the power to stop
these kind of spoof calls, it makes our job in law enforcement
easier to protect seniors from these kinds of scams.
I would note, Senator, that your letter to the FCC, others,
represents a bipartisan commitment at the highest levels of
government. I am hopeful that the FCC will do this.
To be frank with you, I cannot imagine a reason why the FCC
would not approve this. The telecom companies have the
technology available to them to stop these spoof calls. We
should allow them to flip that switch on and do that work. And
so having the strength of this Committee, having the strength,
Senator, of you, 29 attorneys general coming together behind
this, it is going to make us be able to deal with the task of
protecting seniors from telephonic scams easier and more
successful.
Senator Casey. Thanks very much. Madam Chair, thank you.
Senator Nelson. Madam Chairman, I have got to go to the
same mark-up----
The Chairman. Why don't you go ahead.
Senator Nelson [continuing]. As Senator Casey, but I just
want to say thank you. We started this five years ago. That is
hard to believe that much time has passed. Thank you.
I have the privilege of being the Ranking on Commerce that
has telecom jurisdiction, that has FCC jurisdiction. That is an
excellent suggestion, Attorney General Shapiro.
Mr. Shapiro. Thank you, Senator.
The Chairman. Thank you very much, Senator Nelson.
I have to say, in following up on Senator Nelson's
comments, that it is very frustrating to hear all that is being
done and yet realize that these robocalls are still continuing
at an unprecedented rate. I would like to ask each of you--I
think Attorney General Shapiro has answered in part but may
want to add something--what more should we be doing? What
specific action is needed?
It sounds like we no longer have the technology problem
that we once had, the technology is there, we are making
efforts to educate consumers, but the calls are still coming,
even if the success rate has dropped. And it is so frustrating
that the American people are being harassed by 2.4 billion
unwanted calls each and every month. So what do we need to do
to bring this to an end?
Ms. Greisman, we will start with you.
Ms. Greisman. Thank you, and, of course, we all share the
same frustration with these unwanted calls. I do not think the
technology is there yet. I think we have made tremendous
progress, but as Mr. Rupy indicated, they are still beta
testing a lot of the call authentication methods and also other
factors that are sometimes referred to as data inputs that go
into call-blocking technologies to make it more intelligent,
more accurate.
So I think that we are still looking for a better
technological fix than is currently available, and, of course,
we will continue to sustain law enforcement and our educational
outreach efforts.
The Chairman. Mr. Shapiro?
Mr. Shapiro. Madam Chair, I spoke before about two
recommendations. Just to reiterate very briefly, preventing the
IRS debt collectors from contacting individuals directly, and I
absolutely respect the Congress's efforts to collect
outstanding debts. I just think that more focus needs to be on
how those calls are made and doing so in a way that is more
transparent.
Second is we have talked about here today is allowing the
FCC to block these scammers. And then, finally, I would suggest
that there would be greater emphasis placed on education and
outreach. I am a huge believer that if you empower the
population that you are there to serve and protect, and they
can stop a scam in their tracks, ultimately there is less work
for attorneys general, district attorneys, and others to do,
and that is a good thing.
We have an initiative in our office, in Pennsylvania,
called SCAM, and we try and alert seniors to understand what
SCAM stands for. Any kind of sudden--S--contact--C--acting now,
urging a senior to do something right away--and the M, for
money, you know, to send money over. That is a scam, and we
want to alert seniors to that. And more and more, as they wise
up to it, they are not only able to stop a scam but they are
actually in a position to help educate other seniors to prevent
scams there. And hopefully that 0.5 percent success rate,
which, again, sounds small but represents a lot of seniors, can
come down.
So we are hopeful that as the Congress considers funding
bills and other initiatives, that there be resources put in
specifically to driving home that message and focusing on
education.
The Chairman. You know, your suggestion about preventing
IRS debt collectors from calling, or at least setting up some
guidelines, rings very true with us because we, too, advise
seniors that one way they could tell that it was a scam was
that the IRS would never call you----
Mr. Shapiro. Correct.
Chairman Collins [continuing]. Especially without sending a
certified letter first. We are going to have to rewrite all of
our fraud book materials and our little postcards to update
that because of the contracting out of those functions. So I
think that is a good point.
Mr. Rupy, you mentioned that it was about a year ago that
your Strike Force presented its report to the FCC. Comment for
me on whether the technology is there or whether the FCC is
just too slow in this area.
Mr. Rupy. Thank you for that question, Senator, and with
regard to that technology, that is a very good question and it
is an important question. And one of the things I would note is
that in the Strike Force report there is obviously a lot of
discussion about SHAKEN/STIR standard, which has been in
development.
One of the things I would note in that was that even before
the launch of the Strike Force, industry was working toward
that standard, because we realize that at the core of this
issue, that you have heard several witnesses talking about
today, is that problem of caller ID spoofing and the lack of
trust in that caller ID information.
SHAKEN/STIR goes to that, and our industry members, a broad
range of industry members were working on that prior to the
launch of the Strike Force, and because of the Strike Force
those standards were accelerated by six months, which is good
news for consumers. Because what you are seeing now are
multiple providers conducting testing through the standards
organization, ATIS, for this standard, to make sure it is
functional and operates on their networks. And industry is
committed to getting that standard deployed and into the
network.
But one of the other things I would note, that Ms. Greisman
mentioned, that I think is an important shift, that is also
included in the Strike Force Report, is that you are seeing a
growing diversity of consumer tools that are available today.
You are seeing major national providers that are deploying
these tools, and that is an important shift. So you are seeing
companies like AT&T are partnering with companies like Hiya;
Verizon, Sprint are partnering with companies like TNS Cequint;
First Orion PrivacyStar partnering with T-Mobile to put these
types of important consumer tools into the hands of consumers.
The only other thing I would mention, that I would just
echo, I wholeheartedly agree with Attorney General Shapiro that
education is crucial on this. I think education is a very
important component on this, and I would of course agree that
enforcement, as well, is a tremendously powerful tool on this
front. As folks have indicated, when those arrests happened in
Mumbai, India, for the IRS scam, the complaints to the FTC, to
the IRS, to the Senate Aging Committee's own hotline plummeted,
and that just shows that you are pulling this problem out at
the root with good enforcement. And we certainly want to
partner with our partners in government on that.
The Chairman. Thank you. Ms. Barton.
Ms. Barton. I really would like to echo what you, Senator
Collins, have said about education and what Attorney General
Shapiro has said. We are all about consumer education and
simple messaging that people can hold onto, and we are also
about reporting. Scam Tracker is our tool, both for awareness
and for reporting, and what we find is that 49 percent of all
people who report a scam do it in order to stop scammers from
doing it to someone else. So the thought that having people
fight back, be empowered, and pass it on is very important.
We also keep up with trending scams, and on the side of
Scam Tracker there is a place to click for the latest trending
scam, so people can learn more about it. There are also, if you
look up a scam, you will get resources to learn more about that
scam.
I will also say that our messaging about the IRS scam used
to be much simpler. We used to simply say, ``The IRS will not
call you.'' Now we have had to change that messaging to say,
``The IRS will not threaten you. It will not empower law
enforcement to threaten or arrest you.'' And, very importantly,
the scammers often use gift cards, redeemable at stores like
iTunes, and they force victims to purchase numerous cards and
read the numbers off to avoid being arrested.
We need to tell people, ``You only pay either through the
IRS portal or by check made out''--it has to say U.S. Treasury.
The IRS will never ask you to go get a prepaid card.
But those messages just took me longer to say. And we also
find that it is hard for people--the idea that you will never
be contacted without a letter first is really not as helpful as
we wish it would be, because you can get a letter and a scammer
can still call you. It is very easy for scammers to actually
look up credit reports and see that you have a debt, and then
say, ``We are calling to collect this.''
So it is very, very hard to work that way. The simpler the
messaging, and the more, if we are not going to stop calls,
then we need, really, to monitor the aggressiveness of the
private companies that are calling, particularly seniors.
So those are just a few thoughts. I also think that, as Mr.
Rupy said, we all need to work together, and that includes,
obviously you have the power to legislate. Regulatory agencies
such as the FTC and the FCC have the power to enforce and pass
rules. We have the power to educate and to work with both
consumer groups and businesses, and to urge consumers to
report. There is no stigma in reporting, and unfortunately they
think there is.
The Chairman. Thank you. Senator Donnelly, you have been
very patient. Please feel free to take some extra time in your
question.
Senator Donnelly. Thank you, Madam Chair, and to the
attorney general, I just want to follow up on what Ms. Barton
was asking about, or was telling us about, I should say, and
that is in regards to the IRS. What would you tell the people
of Pennsylvania and the people of this country as to how to
prevent them becoming part of an IRS scam, that you see out
there?
Mr. Shapiro. Thank you, Senator Donnelly, and again, I
would just echo, I think, the sentiment of the panel here that
our job was easier. My job in law enforcement was a lot easier
before Congress gave the authority to these, you know, third
parties to go out and make these calls for collection. I would
respectfully urge this body to revisit that and ideally do away
with it, but at the very least have very, very specific
transparency methods, and have those methods be communicated to
seniors across Pennsylvania, and----
Senator Donnelly. Let me ask you this, just on that point
that you just made, that there be very specific methods.
Probably likely that groups like the group in Indiana, and all
of them, would not care less about the very strict rules we put
in place regarding this, if that was what we were to do going
forward, would they?
Mr. Shapiro. Are you referring to a scammer or to a
legitimate call center?
Senator Donnelly. To a scammer, yeah.
Mr. Shapiro. Well, absolutely. The scammers do not pay any
attention----
Senator Donnelly. Right.
Mr. Shapiro [continuing]. To what the rules are, certainly.
So on that point, then, I think it comes back, Senator, to the
education piece, and alerting seniors as to what is ultimately,
you know, a legitimate call.
Senator, I think one of the biggest challenges we face on
the education front, and from hearing from seniors, is that
they are very embarrassed and ashamed when it happens, and I do
not think we can underestimate the effect of that. Furthermore,
I do not think we can underestimate the fact that when it
occurs, and they are embarrassed and ashamed, and really
unwilling to call and----
Senator Donnelly. And scared, probably, too.
Mr. Shapiro [continuing]. Tell someone--right, and scared,
Senator--is they do not know who to call, right?
Senator Donnelly. Right.
Mr. Shapiro. I am the attorney general representing 13
million Pennsylvanians. They do not always know to call me.
They probably know that calling 911 is not the right answer,
right? This is not like a burglar breaking into their home
where they would call 911.
I think that there--I would respectfully suggest to this
body that there be more of an emphasis focused on where federal
dollars go to aging organizations in all of the states, so a
AAA, an area aging agency--I always forget the acronym there.
When federal dollars go there, that there be some requirement
that they be repositories of these kinds of complaints and also
have educational materials from the Federal Government that can
be disseminated to seniors.
Other points of contact, whether it is Meals on Wheels or
other things that the Federal Government funds, if seniors know
that they can go there and get information, and the Federal
Government knows that they can share information and it can be
a two-way street, that would also help us, so that there is a
point of contact.
We are working our tails off in Pennsylvania to let seniors
know they can call us. I am sure the same is the case with
Attorney General Hill in Indiana. But the reality is, seniors
are ashamed, they are embarrassed, they do not know where to
call, and they do not have access to the information, and the
more education we provide, the fewer scams are going to be
successful.
Senator Donnelly. Well, in that leads to my next question.
Ms. Greisman, what have you found to be the most effective ways
to educate our seniors in regards to these phone scams, and to
make it so that they are comfortable to try to find out more
information, to be willing to make the call and say, ``Hey, I
think I might be getting scammed''? What are the best sources
to contact them, to let them know to kind of enter their world,
to provide them with the information to be on your toes on this
stuff?
Ms. Greisman. Well, Senator, we do have a signature
education piece that is targeted at active seniors, and, in
fact, Ms. Barton referred to it. It is called Pass It On, and
it is constantly being updated with new information. The way it
is structured, it talks about various types of scams. So, for
example, charitable scams which are often initiated through
telemarketing, imposter scams, which is where the IRS scam
falls in. And the goal of Pass It On, the way it is structured
and it was based upon research in the field, is to empower
seniors to share the information that they gain from Pass It On
with others, to become visible in their communities as a go-to
person, if somebody receives a call and they are questioning,
does it sound right, is it good enough?
And that is a piece that, through your offices, we have
successfully disseminated throughout the country, and will
continue to do so.
Senator Donnelly. Thank you, Ms. Greisman. Thank you, Madam
Chair.
The Chairman. Thank you. Senator Casey.
Senator Casey. Thanks very much. I wanted to go back to an
issue we raised earlier, the Elder Abuse Protection and
Prosecution Act, which, in fact, passed the House last night by
voice vote. I wanted to ask Attorney General Shapiro about that
as well.
The legislation will, among other provisions, provide law
enforcement officials with prosecution tools to reduce crimes
against seniors and bring perpetrators to justice. I know how
important this is to you and to your work.
Just from a purely law enforcement perspective, how do you
think this will help you in your fight to curb both frauds and
scams in ways that would help this bill with your efforts at
the state level?
Mr. Shapiro. Thank you, Senator. I think this bill would be
very helpful to us in law enforcement. Look, I think we all
agree, we need to punish the criminals who scam our seniors,
and so this bill would give some added tools to us. It would
provide us with more resources and personal power, which, of
course, is always good in this effort.
In my experience, I think you see this dealing with the
heroin and opioid epidemic, which I know, Senator, you and
Chairman Collins and others have worked so diligently on.
Having greater collaboration in law enforcement between
federal, state, and local partners is really key, so this bill
would increase the possibility for that and increase the
information-sharing that is available.
I like, in the bill, that it increases training for federal
investigators and prosecutors, and it equips each judicial
district with someone specifically knowledgeable about the kind
of elder abuse cases that are out there. I would love to see
some of those dollars come to state prosecutors as well, so
that we can be part of that training.
I would also say that having the elder abuse coordinator, I
think it is called, within the FTC--I do not want to speak for
the FTC--but to me it seems like a very good idea.
So, overall, I think this is a really important piece of
legislation and I would urge its passage.
Senator Casey. Thanks very much. I wanted to move to Ms.
Barton with regard to the IRS impersonation scam problem. It is
the top scam reported to the Aging Committee fraud hotline in
the calendar year 2016. In an effort to prevent our loved ones
from being a victim, we have been saying that the IRS will
never call you about your taxes. Unfortunately, the IRS
recently contracted with private debt collectors--and this has
been mentioned already today but it bears repeating--to call
and collect from taxpayers, and scammers are onto this. The IRS
is warning consumers about a scam based on this program.
Has the new program changed the way that you message about
these IRS scams, and what do you think Congress can do to help
address any confusion that the new private debt collection may
cause?
Ms. Barton. Senator Casey, thank you for that question. We
share everyone's concern and we, too, have had to change our
messaging. We are getting it out. We have over 100 BBBs that
are in their local communities. They spend a lot of time with
seniors, in various parts of the community, and Meals on
Wheels, in senior centers. And we are all getting the message
out, they will never arrest you, they will never threaten you,
and here is where you send money. Do not ever use any method or
any payment except to the U.S. Treasury. Pay through the
portal.
What can you do to help? I really think that education,
with all due respect to the IRS, needs to be more robust. A
press release is not the same as a public service announcement,
as paid advertising, and the kind of outreach that we, the FTC,
and others, are doing. It is hard to message. We have gotten a
lot of media attention with our reports, both locally and
nationally. These are the kinds of things, they do not reach
everyone but they reach a lot more people.
Senator Casey. Thanks very much. In the interest of time I
will submit some more questions for the record.
Thank you, Madam Chair.
The Chairman. Thank you very much, Senator Casey.
Mr. Rupy, in June, a federal court issued an order imposing
a $280 million fine against DISH network, and that was the
largest penalty ever issued in a do-not-call case. According to
the court records, DISH network says its telemarketers made
tens of millions of calls, often robocalls.
So I mention this case because I think we expect robocalls
to come from the call center in India, or an international
criminal cartel. We do not expect it to come from a well-known
telecommunications company. What is your organization doing to
identify the source of illegal robocalls, and what if it
involves a member of your organization?
Mr. Rupy. Senator, thank you for that question. So in terms
of identifying the source of these illegal robocalls, that is a
principal focus of USTelecom's Industry Traceback Group. And as
I mentioned in my opening statement, that is a broad-based
coalition of companies that include traditional wire-line phone
companies, cable companies, wireless providers, wholesale
providers, working collaborative to trace back the origin of
these illegal phone calls. That is an effort that we have been
working through and conducting. We have active tracebacks
underway to identify the source of these calls.
One of the ways I explain it is that what we want to do, in
industry, if you think about it as a football field, the
traceback process as it currently stands is a very manual
process, and any given call can transit multiple networks. It
can transit anywhere from four to 10, if not more, networks as
it goes from its point of origin to its point of termination.
What we want to do in our industry group is basically move
that traceback, like a football, down the field, so that we can
get 80, 85 yards down the field until we hit a point where we
are dealing with what I call an intransigent carrier, a carrier
that will not provide the source of that call, where they got
that call from. And at that point we want to turn that
information over to federal enforcement officials so that they
can identify the source of those illegal calls.
And at the end of the day, that is our focus with the
Traceback Group, is to identify the source of these illegal
calls, whether they are originating from domestic or
international sources. I would note that the two of FCC's
recent enforcement actions, one dealing with fraudulent travel
schemes and the other dealing with health insurance, both of
those individuals named in the case--individual cases, were
domestic. One was in Florida. I believe the other was in North
Carolina. So at the end of the day, we want to root these out
and find the source of these illegal calls.
The Chairman. Ms. Greisman, we have noticed, on our
Committee Hotline, a change in some of the kinds of complaints
that we are getting. One is that there appears to be a new scam
where the person says, ``Are you there? Can you hear me?''
Could you tell us whether you are familiar with that scam?
Clearly the caller is after the word ``yes,'' and what are they
doing? I think this is one where we need more education.
Ms. Greisman. Yes, certainly. We are very much familiar
with it, and it is a bit of a conundrum to figure out what is
going on there. What we think is happening is that they are not
so much looking for the ``yes,'' which they might then later
use as authorization for some other good or service, because we
are just not seeing that. We are not seeing any unauthorized
billing. What we think is going on is that this is sort of a
filler. Instead of music it is--and rather than dead air, it is
a filler waiting for a live telemarketer to free up and
actually get on the call.
So that is our best take on it. It also, of course, is an
effort to figure out, is this a number that a true person will
pick up the phone, and they might be able to monetize that type
of call with that kind of information.
The Chairman. Mr. Rupy, another development that our
Committee's Fraud Hotline has noticed is an increasing trend in
complaints of unwanted robocalls that appear to originate from
the same area code and often sometimes the same prefix, the
three numbers following the area code. So it looks like a
neighbor is calling you. Are you familiar with this new
approach to robocalls, and could you give us your insights?
Mr. Rupy. Senator, thank you for that question, and as you
noted in your statement, it looks like a neighbor is calling,
and we have a name for it and it is called ``neighbor
spoofing.'' And what is happening there is the scammers are
essentially spoofing what is called the MPA NSX, which is the
first three numbers, the area code, the next three numbers, the
exchange. I have heard instances where they will spoof, you
know, the first two numbers of the final four numbers, and, you
know, change the last two digits, so it does look like a
neighbor is calling down the street.
My insight on that is that, as I think everyone here would
agree, the robocallers behind these calls are adaptive and they
are manipulative, and I think the primary reason that they are
doing neighbor spoofing is because it works. Because when
individuals see a phone number that looks like it might be from
somebody down the street, they are going to be more inclined to
pick up that call.
The Chairman. Exactly. Ms. Barton, you obviously have done
so much to help educate people about the dangers of these
scams, and you make a really important point about the
sophistication and the ever-changing nature of these con
artists' approach. If you are comfortable, would you share with
the Committee how you almost became a victim yourself, because
I think it is illustrative of the fact that even those of us
who pay a lot of attention to this issue can become a victim.
Ms. Barton. Thank you, Senator Collins. I am perfectly
happy to share it. One of the things we try to do is tell
people not to be embarrassed. So I will try to hide how
embarrassed I am.
[Laughter.]
Ms. Barton. And that is, I think I know a lot about
phishing, but my daughter had lost her credit card, and that
was the only one she had, and she was in St. Petersburg, where
she was at university, and she was evacuating to Atlanta. So we
urgently called and said, ``Can you overnight this?'' and they
were very good. They said, yes, they would. But I was worried
that she was not going to get it, so I texted her. Well, of
course, she is 22 so she did not answer.
I then got an e-mail saying, ``Did you receive your credit
card?'' and I thought, oh, my goodness, maybe she did not. And
then I got another one, saying, ``To confirm that you got your
credit card, please give us the numbers.'' And, of course, I
did not have them because it was hers. So I texted her again
and said, ``Urgently, I need these numbers.'' And as I did it,
I said, ``What am I thinking?'' And so I almost got caught, and
it was because, situationally--and I am a mother--I want my
daughter to have the card. I will do anything. And, of course,
that is how the grandparent scam works, that your grandson,
your granddaughter, they are in jail in Mexico, and that is the
biggest scam that seniors fall for. And when we care the most,
sometimes we think the least.
The Chairman. That is a very good way to put it, and how
extraordinary that you got that at the exact time that you were
seeking to get a new credit card for your daughter. I hope it
will make you feel better that I almost became a victim of
essentially the grandparent--but I am an aunt--the scam,
several years ago when I received an e-mail message that
appeared to be from my nephew, saying that he was traveling
overseas, that he had been robbed, that he needed money to get
back. Being hard-hearted, however, I referred him to the
American Embassy.
[Laughter.]
The Chairman. And then later I started thinking about it
and thought, I do not think Mark is overseas. I called his
father and, of course, he was not. But I do not know what my
response actually says about me, that I did not fall for it
because I thought he should go to the American Embassy for
help, rather than reaching out to his aunt. But it does happen
to everybody, and as you said, when you care about the well-
being of the person you try to help. And it was so
sophisticatedly done. It sounded just like my nephew. So I
think that is a real problem.
I appreciate very much the work that all of you are doing
on this issue. I just want to make a plea that we have got to
move forward, and I hope, when this technology is developed
fully and approved by the FCC, that it will be made available
at no cost to consumers. That is another thing that I am
worried about. If it is very expensive then consumers are not
going to be able to participate in it. So that is an issue that
I hope we can explore at some point.
Before I turn to Senator Casey to see if he has any closing
questions or statements he wants to make, I do want to
recognize that Senator Cortez Masto, who is a very active
member of this Committee--in fact, I do not think she has ever
missed a single hearing--is home in Nevada because of the
horrible acts of violence in Las Vegas. Otherwise, I am
confident that she would be here today, because I know, given
her background, that she has worked very hard to protect
seniors from scams as well.
Senator Casey, do you have any further questions or
comments you would like to make?
Senator Casey. Just briefly. Thank you for the hearing and
I want to thank the panel for your testimony. We have a long
way to go to get this right, but we heard a good bit today
about new tools and technologies on the horizon that will help,
and we have got to continue to work together, at all levels of
government, to stamp this out. But we are grateful for your
testimony, and I am especially grateful for Attorney General
Shapiro making the trip down from my home state. We are
grateful that everyone had an opportunity today to provide this
testimony. Thanks very much.
The Chairman. I too want to thank all of our witnesses
today, as well as our staff for working hard and continuing to
focus on this issue. One reason we have had so many hearings on
this is to try to elevate public awareness, and the attorney
general just gave me a thumbs-up on that, because I know that
has been a focus of his as well.
It is frustrating that despite the creation of the National
Do Not Call Registry 14 years ago, when we thought we solved
this problem--which we did for a very, very brief period of
time--that Americans, especially seniors, continue to be
inundated with these annoying and unwanted calls that can
produce very harmful results. I mean, it is not just the fact
that these calls are coming and interrupting the serenity and
privacy of our seniors. It is that they are scams and they
seeking to part seniors and others--and I was interested in
your comments, Ms. Barton, about the millennials--from their
money. Moreover, advancements in robo-technology has made it so
much easier and cheaper for con artists to target more
potential victims and to bilk them out of their hard-earned
savings.
So I am hopeful that continued education, more aggressive
law enforcement--we saw what happened with the IRS scam after
the call center in India was closed down, that there was a real
drop for a while--and advances in technology--and I am really
looking at the industry and the FCC to lead the way here--will
ultimately put an end to these unwanted and harassing calls.
Committee members will have until Friday, October 13th, to
submit questions for the record. Again, I want to thank each of
you for your personal commitment to ending this series of scams
that evolves by the day, and thank you for being here. Thank
you, Senator Casey, for your work.
This hearing is now adjourned.
[Whereupon, at 10:19 a.m., the committee was adjourned.]
=======================================================================
APPENDIX
=======================================================================
Prepared Witness Statements and Questions
for the Record
=======================================================================
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Prepared Statement of Kevin Rupy, Vice President,
Law and Policy, USTelecom, Washington, DC
Chairman Collins, Ranking Member Casey, Members of the Committee,
thank you for giving me the opportunity to appear before you today.
My name is Kevin Rupy, and I serve as Vice President of Law and
Policy at USTelecom. Over the last several years, USTelecom and our
member companies have been tremendously focused on the robocall issue,
and we share the Committee's concern about the problems associated with
phone-based impostor scams targeted at seniors. Calls using Voice-over-
Internet-Protocol (VoIP) technology when combined with Caller ID
spoofing can be used by scammers to mask their identity and location,
giving their target a false sense of confidence about who is calling.
In this ongoing battle against criminal robocallers, there have
been three important developments over the last year that are
particularly significant.
First, the industry-led, ecosystem-wide Robocall Strike Force
issued its report to the Federal Communications Commission on October
26, 2016. Comprehensive follow-up reports by the industry groups
continuing the work started by the Strike Force were delivered to the
FCC on April 28, 2017. These reports, taken together, catalogue
industry's substantial 8 month effort to advance the battle against
illegal robocalls. These reports hold a significant amount of good news
for consumers, including seniors. For example, the reports note that
the SHAKEN/STIR standards development for the next generation of
robocall mitigation tools that the industry had initiated prior to the
Robocall Strike Force, have been accelerated by 6 months. These
standards, which incorporate caller-ID authentication capabilities into
the network and consumer devices, have entered the industry testing
phase. Some of the initial testing of the SHAKEN standard is expected
to complete later this year, with additional potential deployments
anticipated as early as 2018. The reports also highlight the increasing
number of tools that are being developed and actively deployed to
consumers, by a growing number of national voice and device providers.
Finally, the reports detail the efforts of USTelecom's Industry
Traceback Group, which is comprised of a broad range of network
providers from the cable, wireline, wireless and wholesale industries,
who are working collaboratively in order to identify the origin of
these calls at their source. Industry's strong commitment to this
effort can be seen its significant growth over the last year, from just
3 carriers in July, 2016, to 22 providers as of today. The ultimate
goal of this group is to identify the source of the worst of these
illegal calls, and further enable enforcement actions by Federal
agencies. In this regard, we applaud the FCC's three recent enforcement
actions since June of this year that have resulted in more than $200
million in proposed fines targeting perpetrators of illegal
robocalling, as well as complementary enforcement actions by the FTC.
Second, the reports shows that USTelecom member companies,
independent application developers and a growing number of diverse
companies offer services today that can help older Americans reduce
unknown and potentially fraudulent calls. For example, AT&T has
launched its `Call Protect' service that allows customers with iPhones
and HD Voice enabled Android handsets to automatically block suspected
fraudulent calls. Verizon has been trialing a service that warns its
wireline customers about calls identified as suspicious, and on the
wireless side has deployed robocall mitigation features as part of its
Caller Name ID service. And various carriers have worked with NoMorobo
to facilitate their customers' ability to use that third-party blocking
service, such as Verizon's ``one click'' solution that simplifies
customers' ability to sign up for the service.
Third, the FCC recently published a Notice of Proposed Rulemaking
in which it proposes to clarify rules for when voice providers may
block certain types of calls. USTelecom supports the proposed rules and
has participated fully in the proceeding. One issue the FCC raises is
what protections legitimate callers should have if their calls are
blocked due to the inappropriate scoring of their call. That is an
important topic both for situations where voice providers block numbers
directly, and for blocking services that consumers may opt into in
order to block or filter potentially unwanted calls. It is an issue
USTelecom and its members, and other parts of the robocall labeling/
scoring ecosystem, have been wrestling with for years, and this fall we
are hosting a workshop aimed at helping develop ``best practices'' for
the scoring and labelling of calls.
All these recent developments further demonstrate the essential
commitment from a broad range of stakeholders that will be necessary to
effectively mitigate and defeat these scammers. Indispensable industry
stakeholders from a wide range of companies--including cable, wireline,
wireless, and wholesale providers, as well as standards organizations,
equipment manufacturers and apps developers--have advanced a concerted,
broad-based, effort focused on developing practices, technologies and
methods for mitigating phone-based attacks and scams. This coalition
has also expanded its cooperation with equally important stakeholders
within the Federal Government and with consumer groups. While our
partners in government play a crucial enforcement role, our partners in
consumer organizations are vital to raising awareness about the tools
available to consumer to help mitigate illegal robocalls.
Industry efforts to address the illegal robocall issue remain
ongoing and extremely energized. Importantly, these efforts are being
undertaken by the necessary broad range of industry stakeholders,
including representatives from the wireline, wireless, wholesale, cable
and app developer community, as well as critically important standards
organizations. The results of these comprehensive industry efforts are
detailed in the industry-led Strike Force report submitted to the
Federal Communications Commission in April of this year. The
collaborative efforts outlined in the report are highly detailed,
extremely comprehensive and warrant more than a brief summary. In order
for the Committee to gain a better and complete understanding of these
efforts, USTelecom is submitting the April Strike Force Report as an
addendum to this written testimony.
In closing, let me again thank the Committee for holding this
timely hearing. We share the Committee's concerns, and we look forward
to our continued work together to address this constantly evolving
challenge.
__________
Questions for the Record
To Kevin Rupy
From Ranking Member Bob Casey
Call Authentication
Telecommunications providers have created a plan that will allow for
calls to be authenticated before it reaches the recipient.
Question:
Are companies using this technology now and how will this help in the
fight against robocalls and spoofing? And, when should we expect this
technology to be activated on all of our phone lines?
USTelecom Response:
A broad range of industry stakeholders continue to move forward
with a framework for managing the deployment of secure telephone
identity technologies with the purpose of providing end-to-end
cryptographic authentication and verification of the telephone identity
and other information in an IP-based service provider voice network.
This framework is comprised of two separate standards and best-practice
implementations: (1) Signature-based Handling of Asserted Information
Using toKENs (SHAKEN); and (2) Secure Telephone Identity Revisited
(STIR). Adoption and deployment of these standards and best practices
can provide a much stronger assurance of identity than the legacy
telephone network provides today. This framework will become most
effective upon a full transition to IP-based communications networks, a
process that is well underway.
USTelecom and its member companies support industry-led efforts to
collaboratively develop and voluntarily deploy the SHAKEN and STIR
standards and best-practice implementations. USTelecom has long
maintained that the ability of scammers to easily spoof caller-ID
information is a key component of the illegal robocall scourge. For
that reason, the association's member companies continue their work
with both the Alliance for Telecommunications Industry Solutions (ATIS)
in partnership with the SIP Forum and the Internet Engineering Task
Force (IETF) to develop the SHAKEN and STIR standards and best-practice
implementations for secure call authentication.
As a result of the industry-led robocall Strike Force, the SHAKEN/
STIR standards development for the next generation of robocall
mitigation tools were accelerated by 6 months. These standards have
entered the industry testing phase. Some of the initial testing of the
SHAKEN standard is expected to complete later this year, with
additional potential deployments anticipated as early as 2018. In
addition to helping to improve the reliability of the nation's
communications system by better identifying legitimate traffic, SHAKEN
and STIR may also facilitate the ability of a variety of stakeholders
to identify illegal robocalls and the sources of untrustworthy
communications.
However, it should be noted that while advances have been made in
the development of the SHAKEN and STIR standards and best practices,
efforts are ongoing on a variety of key issues. For example, the
Federal Communications Commission (Commission) remains in the early
stages of an ongoing proceeding addressing efforts by ATIS and SIP
Forum to implement the ``Governance Model and Certificate Management
for the Trust Anchor'' (the ``Governance Framework''). The Governance
Framework describes the way in which entities will be granted the trust
necessary to vouch for call authenticity, and the organizational
structures needed to manage this process. In addition, ATIS and the SIP
Forum are also in the process of advancing the ``Call Validation
Display Framework'' that will develop standards for how to display
SHAKEN/STIR information to consumers. Both of these important
initiatives remain ongoing, with significant industry involvement.
In addition to helping to improve the reliability of the nation's
communications system by better identifying legitimate traffic, SHAKEN
and STIR may also facilitate the ability of a variety of stakeholders
to identify illegal robocalls and the sources of untrustworthy
communications. USTelecom believes that SHAKEN/STIR adoption will
likely be an evolutionary process, similar to the deployment of other
industry standards. These initiatives included ATIS's International
Mobile Subscriber Identity Oversight Council that led to international
roaming capabilities, as well as the Mobile Device Theft Prevention
working group, which ultimately evolved into an industry-led and widely
adopted voluntary commitment to improve handset security and deter
smartphone theft.
USTelecom has also long maintained that a broad-based, multifaceted
holistic approach will be necessary to effectively address the robocall
scourge. In addition to the development of the SHAKEN and STIR
standards and best-practice implementations, a broad range of
stakeholders are also moving across a variety of other fronts to fight
the robocall problem, including the deployment of various consumer
tools, effectuating robust traceback efforts and consumer education, to
name just a few. The rapid and ever-changing nature of the robocall
problem, however, makes the potential for a single ``silver bullet''
solution highly problematic and strongly inadvisable.
An open communications network is inherently vulnerable to abuse,
and the interdependent, interconnected and global nature of the
internet means that areas of vulnerability exist throughout the
network, and therefore cannot be realistically addressed by any single
stakeholder or mitigation technique. Given the rapid and ever-changing
nature of the robocall problem, multifaceted holistic approaches are
necessary--and indeed, beneficial--in order to mitigate the harms
resulting from such illegal calls.
Ranking Member Bob Casey
FTC Fight Against Robocalls
The FTC recently announced that it is now sharing consumer complaints
about robocalls with industry on a daily basis so that
telecommunications providers can quickly adapt to new techniques and
scams.
Question:
What are some examples of how industry is using this information? Now
that you are getting better and more up to date information, what can
we expect from you in the fight in these unwanted robocalls in the next
year? Earlier I mentioned the call my wife received, what can I tell my
wife that you're doing about this?
USTelecom Response:
The decision by the Federal Trade Commission (FTC) to release its
complaint data on a timelier daily basis is another example of how a
variety of stakeholders engaged in the fight against robocalls are
working collaboratively. As a key stakeholder in the battle against
robocalls, the FTC's decision to release such data reflects its
commitment and support of industry stakeholders who are also working to
mitigate robocalls. There are a broad range of stakeholders currently
engaged in mitigating the impact of robocalls, to include voice
providers, equipment manufacturers, government entities, scoring/
analytics companies and consumer groups. Many of these stakeholders
utilize their own data sets to better inform their robocall mitigation
activities.
For example, many scoring and analytics companies utilize so-called
`honeypots', which are servers that are configured to receive phone
calls. By analyzing calls made to the honeypot, companies can identify
robocall traffic in real-time to better inform their robocall
identification analytics. Similarly, other companies will often utilize
real-time call network analytics in order to identify and analyze
suspicious calling patterns. Finally, many companies often utilize
customer-generated complaints in order to identify illegal or unwanted
robocalls to better inform their call analytics. The FTC's data--
comprised of consumer complaint information submitted to the agency--
provides an additional data set that can further inform their
analytics.
Because robocallers often rapidly transition the spoofed numbers
they use to make calls, the FTC's quicker release of its data provides
a variety of industry stakeholders with more timely information with
which to inform its analytics. Moreover, the combination of a variety
of data sets (e.g., customer complaints, network analytics, etc.)
provides additional information to these stakeholders so that they can
better inform their respective analytics and mitigation efforts.
Finally, as highlighted in the industry-led Robocall Strike Force
reports of October 26, 2016, and April 28, 2017, there are multiple
fronts on which stakeholders are advancing the battle against illegal
robocalls. In the coming year, it is anticipated that these efforts
will continue along multiple fronts.
Ranking Member Bob Casey
Stopping Robocalls
There are a number of initiatives going on to help reduce robocalls.
There is the Strike Force, FCC rules, FTC actions, education campaigns
and other things. However, the number of robocalls seems to still be at
an all-time high.
Question:
What action do you believe would be most helpful to reducing the number
of unwanted robocalls?
USTelecom Response:
USTelecom shares the view of a broad range of industry, government
and consumer stakeholders that the rapid and ever-changing nature of
the robocall problem makes the potential for a single ``silver bullet''
both unlikely and inadvisable. An open communications network is
inherently vulnerable to abuse, and the interdependent, interconnected
and global nature of the internet means that areas of vulnerability
exist throughout the network, and therefore cannot be realistically
addressed by any single stakeholder or mitigation technique.
Given the rapid and ever-changing nature of the robocall problem,
multifaceted holistic approaches are necessary--and indeed,
beneficial--in order to mitigate the harms resulting from such illegal
calls. Much in the same way that remediation efforts in areas such as
spam or cybersecurity must continually evolve through a variety of
approaches, the same can be expected with respect to robocalls.
USTelecom supports the development of a variety of solutions to the
robocall problem by stakeholders throughout the internet ecosystem,
including through technological measures, increased industry
cooperation, heightened consumer education, and increased enforcement.
In the report issued earlier this year by the Industry-led robocall
strike force, the group noted that ``to mitigate the problem of illegal
robocalls, the industry is implementing a diverse multitude of evolving
mitigation tools and efforts so that it becomes too costly for illegal
robocalling campaigns to overcome the industry's dynamic mitigation
techniques.'' The Strike Force focused on the following areas: (1)
Authentication; (2) Empowering Consumer Choice; (3) Detection,
Assessment, Traceback and Mitigation; and (4) Regulatory Support.
As noted in USTelecom's written testimony, there have been a number
of important developments in each of these areas over the last several
months. For example, in the area of authentication, the SHAKEN/STIR
standards development for the next generation of robocall mitigation
tools that the industry had initiated prior to the Robocall Strike
Force, have been accelerated by 6 months. These standards, which
incorporate caller-ID authentication capabilities into the network and
consumer devices, have entered the industry testing phase. Some of the
initial testing of the SHAKEN standard is expected to complete later
this year, with additional potential deployments anticipated as early
as 2018.
In the area of Empowering Consumer Choice, there are an increasing
number of tools that are being developed and actively deployed to
consumers, by a growing number of national voice and device providers.
USTelecom member companies, independent application developers and a
growing number of diverse companies offer services today that can help
older Americans reduce unknown and potentially fraudulent calls.
For example, AT&T has launched its `Call Protect' service that
allows customers with iPhones and HD Voice enabled Android handsets to
automatically block suspected fraudulent calls. Verizon has been
trialing a service that warns its wireline customers about calls
identified as suspicious, and on the wireless side has deployed
robocall mitigation features as part of its Caller Name ID service. And
various carriers have worked with NoMorobo to facilitate their
customers' ability to use that third-party blocking service, such as
Verizon's ``one click'' solution that simplifies customers' ability to
sign up for the service. The website of the Federal Communications
Commission (FCC) was recently updated to provide information to
consumers on the growing number of tools available to them across a
variety of voice platforms to protect them from illegal or unwanted
calls. Equally empowering to consumers are the various education
efforts underway that play an important role in mitigating illegal
robocalls.
Regarding issues related to traceback and mitigation of robocalls,
USTelecom has been leading an effort to mitigate the impact of certain
robocalls, and identify their point of origin. Working with a broad
range of 23 voice providers (including cable, wireline, wireless and
wholesale providers), the Industry Traceback Group (ITB Group) shares
call detail information of certain calls, thereby enabling them to
quickly, efficiently and cooperatively identify the true source of
fraudulent, abusive or unlawful calls, including robocalls. In
instances where calls are traced to their point of origin, this often
enables investigating providers to work with the originating carrier to
cease such calls initiated by its customer.
Such efforts are also extremely valuable to law enforcement, since
the ITB Group's ability to trace calls through several networks can
substantially assist law enforcement personnel in subsequent
investigations. Robust enforcement actions are often the most effective
means for mitigating illegal robocalls, since they shut down the flow
of such calls at the source. For example, in June of this year, the FCC
initiated an enforcement action against one company that allegedly made
96 million spoofed robocalls during a 3-month period.
Finally, in the area of regulatory support, the FCC has moved
forward on important initiatives--some of which were recommended by the
industry-led Robocall Strike Force--that will further empower
stakeholders to engage in robocall mitigation efforts. For example, the
FCC recently adopted rules that permit voice service providers to
combat illegal robocalls by blocking them before they reach consumers'
phones. Specifically, the FCC adopted rules allowing providers to block
calls from phone numbers on a Do-Not-Originate list and those that
purport to be from invalid, unallocated, or unassigned numbers. The FCC
has also initiated an effort regarding the governance framework for the
SHAKEN and STIR standards and best practices. Finally--and perhaps most
importantly--the FCC recently initiated several enforcement actions
against illegal robocallers.
From Senator Sheldon Whitehouse
Question:
Last election cycle, there were several reports of robocalls being made
to voters falsely telling them their ballot would not be counted unless
they updated their voter registration status. How can robocalling
technology be used to suppress votes? What actions can Congress take to
address that threat
USTelecom Response:
Abuses of the telephony network by robocallers can take many forms.
These include telephony denial of service (TDOS) attacks that can
disable legitimate call centers, consumer fraud targeted toward taking
money (e.g., the IRS Scam), and consumer fraud targeted at obtaining
personal information. There are also reports that Illegal actors can
use robocalling platforms to suppress votes.
USTelecom agrees with the broad range of stakeholders from
government, industry and consumer groups which maintain that a broad,
multifaceted, holistic approach is best suited to addressing harms
resulting from illegal robocalls, regardless of their intended focus.
For example, providing consumers with the necessary tools to choose
which calls to block (including political robocalls) can empower
consumers in such an environment, and protect them against associated
harms. Short of banning all political robocalls, it will be imperative
for stakeholders to move forward with this holistic approach in order
to effectively address the impact of all harmful robocalls, including
those related to voter suppression.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Questions for the Record
To Genie Barton
From Ranking Member Bob Casey
Stopping Robocalls
There are a number of initiatives going on to help reduce robocalls.
There is the Strike Force, FCC rules, FTC actions, education campaigns
and other things. However, the number of robocalls seems to still be at
an all-time high.
Question:
What action do you believe would be most helpful to reducing the number
of unwanted robocalls?
Answer:
Ranking Member Casey, thank you for your question. BBBI believes
that in order to turn the tide on fraudulent and abusive robocalls, we
must all continue the efforts you described. While we have no ``silver
bullet'' to recommend, we suggest that a task force comprised of the
organizations represented at the hearing and other like-minded
organizations could be an effective next step. BBB is proud that we are
working closely with the FTC, the IRS, other national and local law
enforcement entities, State attorneys general, and industry in the
fight to protect consumers from fraudsters and that we are a recognized
leader among the not-for-profit sector in combatting robocalls through
consumer education and scam prevention. Our efforts include the BBB
Scam Tracker reporting and research tool, consumer tips, alerts on
trending telephone scams, and interviews on national media and local
affiliates by the more than 100 BBBs in the communities they serve
across North America. BBB would be happy to join a task force to work
with others across all sectors to strike back at fraudulent and abusive
robocallers with educational materials, unified messaging, and further
sharing of data with entities working to bring enforcement actions. As
industry continues to make technological advances, the task force could
make consumers aware of new weapons they can use against robocall
abuses.
From Senator Elizabeth Warren
In November 2015, Congress passed the Bipartisan Budget Act of
2015, which exempted robocalls calls ``made solely to collect a debt
owed to or guaranteed by the United States'' from the Telephone
Consumer Protection Act (TCPA)'s prior express consent requirement.\1\
The Bipartisan Budget Act of 2015 authorized the Federal Communications
Commission to adopt rules to ``restrict or limit the number and
duration'' of any wireless calls made to collect debts owed to or
guaranteed by the Federal Government, which included Federal student
loans.
---------------------------------------------------------------------------
\1\ Section 301 of Public Law 114-74 amending Section 227(b)(2) of
the Communications Act.
---------------------------------------------------------------------------
On August 11, 2016, the FCC released a Report and Order
implementing Section 301 of the Bipartisan Budget Act of 2015, which
limited the use of the exemption in several critical ways.\2\
---------------------------------------------------------------------------
\2\ ``Report and Order: Rules and Regulations Implementing the
Telephone Consumer Protection Act of 1991,'' Federal Communications
Commission, last reviewed on October 12, 2017 available at https://
apps.fcc.gov/edocs_public/attachmatch/FCC-16-99A1.pdf.
---------------------------------------------------------------------------
Genie Barton
Thank you for your questions, Senator Warren, which are restated
separately below.
BBB has two separate sources of data that may be pertinent to your
questions: consumer complaints (BBB Complaint data base) and consumer
scam reports (BBB Scam Tracker data base).\3\ We note that whenever a
legitimate company engages in debt collection activities, scammers will
often masquerade as the legitimate company. Accordingly, a number of
our data points relate to scammers posing as a real company. Sometimes
it is impossible to tell whether the company is merely a scam or an
actual business whose practices may be questionable.
---------------------------------------------------------------------------
\3\ We note that BBB Scam Tracker `is a crowdsourced online tool
that empowers the public to report scams and fraud and to explore
reports submitted by others on an interactive ``heat map.' '' See
generally Fletcher, Emma & Pessanha, Rubens, 2016 BBB Scam Tracker
Annual Risk Report: A New Paradigm for Understanding Scam Risk (2016)
available at https://www.bbb.org/globalassets/local-bbbs/council-113/
media/scam-tracker/risk-report/bbbscamtrackerannualreport-022517-
v3.pdf. We also note that the BBB Complaint system takes complaints
from consumers regarding any business, whether BBB accredited or not.
See generally Better Business Bureau, Learn About Our Complaint
Services, https://www.bbb.org/council/consumer-education/complaints/
(last visited Nov. 29, 2017).
---------------------------------------------------------------------------
While both the BBB Complaint and Scam Tracker data bases contain
useful data, each data base has certain limitations with respect to
providing accurate information that is responsive to the questions you
are asking, as we explain below.
Unfortunately, neither the BBB Scam Tracker reporting form nor the
BBB Complaint form asks the consumer whether the origination of the
scam/complaint was via robocall. Therefore, although we have used our
best efforts to make keyword searches to identify all robocalls, we may
be under-reporting.
We also note that neither of our forms requests that consumers
provide their specific age. The BBB Scam Report form asks consumers to
State to which of the following age groups they belong: 18-24, 25-34,
35-44, 45-54, 55-64, and 65+. However, the BBB Complaint form only asks
consumers to ``check a box'' if they are above the age of 65, and we
have found that very few people appear to use this box to self-identify
as over 65.
Additionally, we want to emphasize that because our data bases are
based on self-reporting, the information provided here may have
inherent limitations compared to data obtained through other research
methods.
Because we are unable to identify all the private collection
agencies authorized to collect debts owed to the Federal Government, we
focused on those private debt collectors employed by the Department of
Education to collect debts owed on Federal student loans.\4\
---------------------------------------------------------------------------
\4\ The list of private collection agencies we researched can be
found in the drop down menu on the Department of Education website at
https://studentaid.ed.gov/sa/about/data-center/business-info/contracts/
collection-agency#accountcontroltechnologyinc with the addition of
Sallie Mae/Navient, NelNet, Great Lakes and FedLoan.
---------------------------------------------------------------------------
Where the question appeared to have a broader scope than student
loans, we looked at complaints related to those same private collection
agencies identified as contractors of the Department of Education
above. Because we were not confident we could accurately differentiate
between debts owed to the Federal Government and other debts, our
responses to questions two and three include all complaints related to
these companies' debt collection practices.
With those caveats in mind, we hope that the information contained
in the attached spreadsheets will be useful. These spreadsheets, which
we have listed below for your reference under the section of this
document entitled ``Data Sets,'' include the best data we can provide
within the limitations we have noted.
In response to Question 1, we also draw your attention to the
attached Data Set 1--Text of BBB Complaints on All Debt-Related
Robocalls, and Data Set 3--Text of BBB Scam Tracker Reports about
Purported Department of Education Private Collection Agencies. Data Set
1 provides data from our BBB Complaint data base, including the
consumer's own description of his or her complaint about a private
collection agency employed by the Department of Education to collect on
a Federal student loan. Data Set 3 provides data from the BBB Scam
Tracker data base about consumer reports involving purported Department
of Education private collection agencies. We also draw your attention
to Data Set 4, which contains a list of BBB Complaints and BBB Scam
Tracker reports that, based on our analysis of the language of the
complaints and keyword searches, we infer are related to phone calls
made to seniors by debt collectors about student loan debt.
Senator Elizabeth Warren
Question:
Now that federally contracted private debt collectors are allowed to
robocall older Americans without their consent to collect Federal
student loans, please share any complaint data or aggregate reports the
Better Business Bureau Institute for Marketplace Trust has based on
complaints received from older Americans about robocalls from Federal
student loan debt collectors.
Answer:
Although, as noted above, neither the BBB Consumer Complaint data
base nor the BBB Scam Tracker data base yields data that meet all the
parameters of this question, we believe the five attached data sets
described below contain information relevant to the question.
Data Set 1_Text of BBB Complaints on All Debt-Related Robocalls
Timeframe: November 2014 to November 2017
Notations:
The complaints are derived from our BBB Complaint data
base.
Because the BBB Complaint system does not track the age
of individual complainants, the complaints shown below are not senior-
specific.
The complaints below were identified by search parameters
pertaining to robocalls (automated calls) regarding any loans/debts--
not necessarily student loans.
These data do not include reports that consumers filed
with the BBB Scam Tracker data base, which is primarily comprised of
reports addressing scams and fraudulent conduct.
Of the approximately 900 total complaints, 60 complaints
involve federally contracted debt collection companies that the
Department of Education lists on their website as their contractors for
the collection of Federal student loan debt.
Data Set 2_Tallies of BBB Complaints of Debt-Related Robocalls by Month
and Year
Timeframe: December 2014 to October 2017
Notations:
The complaints are derived from the BBB Complaint data
base. They may not include reports that consumers filed with the BBB
Scam Tracker data base, which is primarily comprised of reports
addressing scams and fraudulent conduct.
The complaints below were identified by search parameters
pertaining to robocalls regarding any loans/debts--not necessarily
student loans.
Because the BBB Complaint system does not track the
specific age of individual complainants, these data include complaints
from all consumers irrespective of age.
Data Set 3_Text of BBB Scam Tracker Reports about Purported Department
of Education Private Collection Agencies
Timeframe: February 2015 to November 2017
Notations:
This data set comes from the BBB Scam Tracker Data base,
as opposed to the BBB Complaint Data base.
This data set has not been filtered by relevance to any
particular type of debt collection, age of consumer, or other criteria.
This data set only includes Scam Tracker reports that
involve any of the federally contracted debt collection agencies we
identify in endnote 2.
Because the reports come from the BBB Scam Tracker data
base, it is very likely that the reports described here involve
fraudsters (e.g. criminal actors) representing themselves as legitimate
companies.
The BBB Scam Tracker program began beta testing in
February 2015, so we note that we do not have Scam Report data prior to
this month. We note that the first germane report was in May 2015.
Data Set 4_Complaints and Scam Reports Related to Seniors and Student
Loan Debt
Timeframe: November 2014 to November 2017
Notations:
This data base contains combined BBB Scam Tracker and BBB
Complaint data that we inferred to be related to debt collectors
contacting seniors about student debt through phone calls (not limited
to the use of robocall technology).
We note that the data here consist of reports and
complaints that address scenarios which are not limited to Federal
student loan debt.
Data Set 5_Sample Student Loan Complaints and Scam Reports
Timeframe: November 2014 to November 2017
Notations:
We believe these anecdotes illustrate, in consumers' own words,
some of the challenges they face when engaging with student loan debt
collectors or scammers who pose as such debt collectors.
Question:
Has the BBB Institute noticed any increases or other trends in
complaint volume from older Americans regarding Federal student loan-
related robocalls since Congress allowed Federal debt collectors to
robocall seniors without their consent?
Answer:
Unfortunately, because of the limitations explained above around
our current data-gathering processes and the limited number of
responses available, we are unable to provide data that would show
whether there has been an increase in the complaint volume from older
Americans related to student loan debt repayment or to provide relevant
insights on other possibly significant trends. Nonetheless, in case it
could be helpful, in Data Set 2 we created a chart showing aggregated
complaint data on all calls related to debt collection from December
2014 to October 2017. These data do not reveal any particular trends.
Because the BBB complaint data base does not track the specific age of
complainants, it is not possible to determine if older Americans as a
cohort were affected differently from other age groups.
Data Set 5--Sample Student Loan Complaints and Scam Reports--
provides sample narratives from consumers whom we were able to identify
with confidence as older Americans who provide, in their own words, a
complaint about a negative experience they suffered in connection with
a robocall-initiated call to collect a student loan debt or by a
robocall-initiated scam where the fraudster posed as a legitimate debt
collection agent seeking repayment for a student loan.
Question:
Please share any complaint data, complaint information, or
aggregate reports regarding complaints from older Americans about
robocalls made by debt collectors on behalf of the Federal Government
for any debts owed to or guaranteed by the United States.
Answer:
To answer this question, we searched both the BBB Consumer
Complaint data base and the BBB Scam Tracker data base, using
``robocall'' and ``student,'' ``debt,'' and similar terms, e.g.,
``autodial'' to find relevant data. We have attached the four Excel
spreadsheets which we have described above on pages 5-7 of this
document that the Committee may find useful in answering this question.
We have also attached a document, entitled Data Set 5--Sample Student
Loan Complaints and Scam Reports, which provides typical examples (in
the consumer's own words) of consumer complaints or scam reports. We
hope these narratives will provide insight into subpar behaviors of
private debt collection agencies or fraudsters imitating them.
From Senator Sheldon Whitehouse
Question:
Last election cycle, there were several reports of robocalls being made
to voters falsely telling them their ballot would not be counted unless
they updated their voter registration status. How can robocalling
technology be used to suppress votes? What actions can Congress take to
address that threat?
Answer:
Thank you for your question, Senator Whitehouse. BBB supports and
commends the efforts of consumer educators, law enforcement, and the
media to combat voter fraud. However, BBB does not have expertise in
robocall technology, so we do not know how to counter the use of
robocalling technology to prevent this from happening in the future.
Moreover, as a non-partisan organization that is focused on marketplace
trust and business self-regulation, voters do not contact BBB with
concerns about voter suppression activities.
=======================================================================
Additional Statements for the Record
=======================================================================
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]