Letter To Federal Trade Commission Chairman, Deborah Platt Majoras

Letter

By:  Barack Obama II
Date: May 21, 2007
Location: Washington, DC


Letter To Federal Trade Commission Chairman, Deborah Platt Majoras

U.S. Senator Barack Obama (D-IL) today sent a letter to Federal Trade Commission (FTC) Chairman Deborah Platt Majoras raising serious concerns about whether the FTC has adequately protected America's seniors from abusive telemarketing fraud schemes.

According to a report in Sunday's New York Times, millions of our nation's senior citizens are at risk of being robbed of their good credit standing, life savings and privacy. In the letter, Senator Obama says that while telemarketing may help seniors maintain access to products and services, seniors must be protected from exploitation, identity theft, and privacy violations. He calls on the FTC to aggressively enforce the law to ensure that the consumer protection challenges faced by vulnerable populations like seniors are addressed.

The full text of the letter is below:

The Honorable Deborah Platt Majoras
Chairman
Federal Trade Commission
600 Pennsylvania Avenue, N.W.,
Washington, D.C. 20580

Dear Chairman Majoras:

Yesterday, the New York Times published an investigation into telemarketing fraud schemes that exploit vulnerable American seniors, often robbing them of their dignity, their good credit, and even the life savings and financial resources they rely on to pay for food or medication. I am writing to express my concern that the Federal Trade Commission (FTC) is not doing more to deter such schemes and to protect elderly consumers from abusive and fraudulent telemarketing practices.

The New York Times story highlighted the ways in which scam artists purchase databases of names of elderly Americans. These lists include names of: "Elderly Opportunity Seekers" (seniors "looking for ways to make money"); "Suffering Seniors" (people with cancer or Alzheimer's disease); and "Oldies but Goodies" (gamblers over 55 years old). Armed with these lists, criminals are able to prey on vulnerable seniors - people like Iowan Richard Guthrie, a 92-year-old Army veteran, who lost $100,000 from scams.

There is no question that telemarketing and electronic commerce represent important ways for many seniors to participate in the economy as merchants and consumers. But there is also no question that remote transactions present new risks of privacy violations, identity theft, and exploitation of potentially vulnerable consumers.

The government must ensure that consumer protection and law enforcement authorities have the right priorities, tools, technologies, and resources to keep up with the evolving threats faced by American consumers. We cannot allow our elderly parents and grandparents to be so easily preyed upon by unscrupulous data brokers and others complicit in deceptive mailings, marketing scams, and outright fraud.

The FTC is charged with protecting consumers from fraud, deception, and unfair business practices. The Commission is responsible for enforcing our nation's consumer protection laws and developing rules and procedures to protect and educate consumers. Given this clear mandate, the widespread and sophisticated abuse of many seniors raises a number of questions:

* What if anything is the FTC doing to assess and address the particular consumer protection challenges faced by seniors or other groups of American consumers who may be especially vulnerable to abuse?

* In particular, what is the FTC doing to regulate the sale of telemarketing databases to companies that are under investigation or have been prosecuted for fraud?

* How have FTC resources been allocated to protect rising numbers of seniors who are conducting remote consumer transactions at increasing rates? Are additional resources necessary and for what priority purposes?

* What if any programs exist to assist seniors with questions or complaints about marketing practices of which they may have been victims? What are the utilization rates of these programs over the past ten years? Have these programs been evaluated, and with what results?

* Is there adequate coordination between the FTC, the Federal Reserve, and the Department of Justice to ensure effective prevention and prosecution of marketing abuse?
What if any multi-agency initiatives are currently underway or planned for the near future? Please give specific examples of enforcement actions that have been taken recently against data brokers, telemarketers, or enabling financial institutions.

* What if any changes to regulatory authority or direction are necessary to enable the FTC to fulfill its consumer protection mandate in light of evolving marketing, communication, and transaction technologies?

An FTC that is aggressively enforcing the law is critical to protecting American consumers in a vibrant, fast-paced economy. Please respond to the questions above by June 8, 2007. I look forward to working with your office to ensure that consumers of all ages can have confidence in their conversations with telemarketers and in all their consumer transactions.

Sincerely,

Barack Obama
United States Senator