Gillibrand, Local Residents: Pass New Law To Protect Western New York Seniors From Financial Fraud
Estimates Show More Than 40,000 Western New York Seniors Fall Victim to Horrible Financial Scams Each Year, Costing More Than $15 Million Annually
Buffalo, NY – Standing inside the Cheektowaga Seniors Center, U.S. Senator Kirsten Gillibrand, a member of the Senate Special Committee on Aging, was joined by seniors and advocates today to urge the U.S. Senate to pass legislation aimed to help Western New York elderly protect their financial life savings. They called on the Senate to move forward on legislation authored by Senator Gillibrand that would help stop abusive mail, telemarketing and Internet fraud and educate local seniors about how to protect themselves from these types of scams. Three weeks ago, similar legislation passed the House of Representatives. A recent Gillibrand study estimates that more than 40,000 Western New York seniors fall victim to scams and lose more than $15 million each year. Senator Gillibrand announced that she would send a letter to Chairman Patrick Leahy requesting a hearing in the Judiciary Committee in the fall.
“Seniors have spent a lifetime saving and preparing for the golden years, and they deserve financial security and peace of mind,” Senator Gillibrand said. “But far too many are being lured into bad investments, and getting scammed by criminals out of their savings and benefits. Western New York seniors should have the resources they need to protect their investments against scam artists.”
According to estimates from the Federal Trade Commission (FTC), 1 out of 5 seniors fall victim to fraud. A report from Senator Gillibrand’s office shows approximately half a million New York seniors have fallen victim to consumer fraud – losing approximately $180 million.
Senator Gillibrand unveiled the following measures to combat this growing threat against seniors:
Stopping Abusive Mail, Telemarketing and Internet Fraud Against Seniors
Seniors are often targeted for fraud through the mail or over the phone – where they may be more inclined to trust a salesperson. In 2007 alone, postal inspectors investigated nearly 3,000 mail fraud cases nationwide and arrested more than 1,200 mail fraud suspects. As more seniors use e-mail and the Internet, criminals are also increasingly preying on seniors online– using "phishing," e-mail spamming and other Internet tactics to lure seniors into fraud.
The House passed legislation in July to stop abusive mail, telemarketing and Internet fraud against seniors and educate them about financial fraud. Senator Gillibrand introduced similar legislation in the Senate.
The Senior Financial Empowerment Act would:
- Direct the FTC to establish a one-stop-shop for consumer education on mail, telemarketing and Internet fraud against seniors;
- Establish a grant program to give states and local organizations resources they need to initiate local mail, telemarketing and Internet fraud prevention and education programs for seniors;
- Declare a "National Senior Fraud Awareness Week" in May – coordinated with Elder Abuse Awareness Month – to increase public awareness of the enormous impact that mail, telemarketing and Internet fraud have on senior citizens in the U.S.
Increase Penalties for People who Commit Fraud Against Seniors
Once seniors retire, they face the challenge of making their savings last their entire retirement. Since a large portion of their assets are investable, seniors are often offered complicated investment products. While these products can be valuable to certain senior investors, they are often sold and offered by corrupt and dishonest would-be criminals.
To protect more seniors from fraud, Senator Gillibrand introduced the Senior Investor Protections Enhancement Act – legislation that would:
- Target those who commit securities violations against seniors, including selling products unsuitable for their age, failing to disclose fees, charging large penalty fees, or switching the investment product actually sold from the one that was marketed;
- Charge an additional $50,000 civil fine for each violation that is targeted or is committed against a senior.
Cracking Down on “Senior Advisor” Scams
Senator Gillibrand also pointed to a provision signed into law as part of the Wall Street Reform and Consumer Protection Act which would combat scams against seniors involving financial advisors who use their misleading “senior designations” status to lure the elderly into fraudulent investment opportunities. The bill would establish a national grant program for states to adopt model rules to eliminate these misleading designations and help provide needed resources to prosecute cases of abuse, train law enforcement to prevent these scams, and educate seniors to help them avoid being lured into bad, fraudulent deals.
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