Economic Growth, Regulatory Relief, and Consumer Protection Act

Floor Speech

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Ms. COLLINS. Mr. President, I rise today to speak in support of the Senior$afe Act, which I am pleased is included in the Economic Growth, Regulatory Relief, and Consumer Protection Act. My good friend Senator Claire McCaskill and I have been working on Senior$afe for several years now. This bill originated with testimony offered by Maine Securities Administrator Judith Shaw in a hearing before the Senate Aging Committee in 2015. I am the chairman of that committee, and Senator McCaskill was the ranking member at that time. We introduced the bill that year, and reintroduced it in January of 2017. Today, the bill is cosponsored by almost a third of this body, balanced nearly evenly on both sides of the aisle.

I am disappointed to learn that my colleague Senator Warren has filed an amendment that would seriously undermine the Senior$afe Act by restricting its provisions just to liability that may arise under the Gramm-Leach-Bliley Act. If this amendment were to pass, financial service providers that report suspected frauds against seniors could still face liability under other laws or causes of action, which would discourage providers from making these critical reports. I understand that the proponent of this amendment contends that Senior$afe could somehow shield a financial service provider from its own fraud. That is simply not correct.

In order to receive the protections of the Senior$afe Act, financial service providers must train their employees to spot suspicious activity that may indicate fraud targeting seniors, and make good faith, reasonable reports of that suspicious activity to the proper authorities. The bill is clear that it only shields reporting a suspected fraud; there is no protection for committing a fraud.

Combating financial abuse of seniors requires consumers, regulators, law enforcement, and social service agencies at all levels of government to work collaboratively with the private sector. The stakes could not be higher. According to the GAO, financial fraud targeting older Americans is a growing epidemic that costs seniors an estimated $2.9 billion annually. Stopping this tsunami of fraud is one of the top priorities of the Aging Committee. Over the years, we have held numerous hearings exposing an endless variety of financial abuses targeting our Nation's seniors. These range from the notorious IRS phone scam that burst onto the scene in 2015, to the incredible ``drug mule'' scam, where trusting seniors have been tricked by international narcotics traffickers into unwittingly serving as drug couriers, and then find themselves arrested and locked up in foreign jails.

Just last week, our committee heard the story of Stephen and Rita Shiman from Saco, ME, who lost more than $1,200 in the notorious grandparent scam. In this scam, fraudsters call a senior pretending to be a family member, often a grandchild, and claim to be in urgent need of money to cover an emergency, medical care, or a legal problem.

Sadly, not all scammers are strangers to their victims--in too many cases, seniors are exploited by someone they know well. Sometimes, that abuse is perpetrated by ``friends'' or family members who are handling the victim's affairs informally. Other times, the abuse is committed under the color of a fiduciary relationship, such as a power of attorney or guardianship.

No matter the scheme, one factor is common to all: The fraudsters gain the trust and cooperation of their victims. Without this, their schemes would fail. The scammers also push their victims to act fast and not to tell anyone what they are doing.

Unfortunately, due to the ruthless cunning of the scam artists, many seniors do not see the red flags that signal fraud. Sometimes they are too trusting or are suffering from diminished capacity, but just as often, they miss the signs because the swindlers who prey on them are extremely crafty and know how to sound convincing. Whatever the reason, a warning sign that can slip by a victim might trigger a second look by financial service representatives trained to spot common scams, who know enough about a senior's habits to question a transaction that doesn't look right. In our work on the Aging Committee, we have heard of many instances where quick action by bank and credit union employees has stopped a fraud in progress, saving seniors untold thousands of dollars.

Let me give you an example. In 2016, an attorney in the small coastal city of Belfast, ME, was sentenced to 30 months in prison for bilking two elderly female clients out of nearly a half a million dollars over the course of several years.

The lawyer's brazen theft was uncovered when a teller at a local bank noticed that he was writing large checks to himself on his clients' accounts.

When confronted by authorities, he offered excuses that the prosecutor later described as ``breathtaking.'' He submitted bills for ``services,'' sometimes totaling $20,000 a month, including charging her $250 per hour for 6 to 7 hours to check on her house, even though his office was just a 1-minute drive down the road.

In another example, a senior citizen in Vassalboro, ME, was looking to wire funds from his account at Maine Savings Federal Credit Union to an out-of-State location, supposedly to bail out a relative who was in jail. Something about this transaction did not sound right to the credit union employee. She asked the customer, and he said he had received a call from an ``official'' at the jail, but that official had instructed him not to speak to anyone about this. The official, of course, turned out to be a con artist.

Fortunately, the credit union worker recognized this as a scam, and her quick thinking saved her customer from falling victim and losing his savings.

These stories demonstrate the critical nexus that financial institutions occupy between fraudsters and their victims. Their employees, if properly trained, can be the first line of defense protecting our seniors from these criminals. Regrettably, various Federal laws can inadvertently impede efforts to protect seniors because financial institutions that report suspected fraud can be exposed to litigation. The Senior$afe Act encourages financial institutions to train their employees and shields them from lawsuits when they make good-faith, reasonable reports of potential fraud to the proper authorities.

There is no doubt that financial fraud and scams targeting seniors is a growing problem. In 2016, the Aging Committee heard testimony from Jaye Martin, the executive director of Maine Legal Services for the Elderly, who told the committee that her organization had seen a 24- percent increase in reports of elder abuse in just 1 year. Many of these cases involve financial fraud.

In a letter describing her support for the Senior$afe Act, Ms. Martin said that:

In a landscape that includes family members who often wish to keep exploitation from coming to light because they are perpetrating the exploitation, the risk of facing potential nuisance or false complaints over privacy violations is all too real. This is a barrier that must be removed so that financial institutions will act immediately to report to the proper authorities upon forming a reasonable belief that exploitation is occurring. These professionals are on the front lines in the fight against elder financial exploitation and are often the only ones in a position to stop exploitation before it is too late.

Martin's letter be printed in the Record following my remarks.

Our bill is based on Maine's innovative Senior$afe program, a collaborative effort by Maine's regulators, financial institutions, and consumer and legal organizations to educate bank and credit union employees on how to identify and help stop financial exploitation of older Mainers. This program, pioneered by Maine Securities Administrator Judith Shaw, also serves as the template for model legislation developed for adoption at the State level by the North American Securities Administrators Association, or NASAA. The Senior$afe Act and NASAA's model State legislation are complementary efforts, and I am pleased that NASAA has endorsed our bill.

I am pleased that our bill has received bipartisan support in both houses of Congress. Besides receiving broad support in Congress, our bill has the support of a wide range of stakeholders, ranging from the State securities administrators and insurance commissioners to advocates for seniors, such as AARP.

The Senior$afe Act encourages financial institutions to train their employees and shields them from lawsuits when they make good-faith, reasonable reports of potential fraud to the proper authorities.

I am pleased the Senior$afe Act is included in the bill currently before the Senate, and I look forward to it finally becoming law.

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