The U.S. Senate Committee on Commerce, Science, and Transportation announces the following Consumer Protection, Product Safety, and Insurance Subcommittee hearing on The Economy and Fraud: Protecting Consumers During Downward Economic Times.
John D. Rockefeller, IVSenatorThis hearing could not come at a more critical moment as we continue to grapple with an economic crisis of immense proportions. Amidst the worst recession in decades, families remain unsure if they’ll lose their health insurance, find new jobs, and be able to pay next month’s bills.We made a decision in the federal government to respond aggressively to this crisis and passed a recovery plan aimed at providing some direct relief to families, businesses and communities on the brink. It was deeply important for us to take action — and quickly.But we also know that there is much more work to do, not only to build a framework to move from recovery to long-term growth, but also to make sure people are protected right now.The reality is that with the economic challenges we face, families are more vulnerable than ever to financial scams, predatory marketing practices, and economic fraud. We all see the news every day about more layoffs, plant closings, soaring prices and more cutbacks in West Virginia and across the nation.That has meant more workers without a safety net looking for more ways to climb their way back from the edge and find income security.What many find instead are scam artists — criminals ready to pounce and easily exploit vulnerable consumers already struggling with unemployment, debt, or foreclosure.We know there will always be fraudsters trying to take advantage of the least fortunate among us. But as reports have already shown, and our witnesses will discuss today, during an economic crisis of this magnitude, economic fraud has grown more aggressive and more dangerous.Even as it happens with greater and greater frequency, the consequences are devastating every time:
- The consumer who invested tens of thousands of dollars in an empty work-at-home promise, only to make little or no money in return for his or her efforts.
- The unemployed worker lured in by a bogus job opportunity, suddenly caught up in a check cashing scheme or an untenable advance-fee credit card with no recourse for thousands lost.
Consumer Sentinel, the FTC’s database recording claims of abuse and scams grows longer everyday. Earlier this month the Federal Trade Commission announced the launch of an important initiative, “Operation Short Change,” a law enforcement sweep focused on scams like fraudulent employment opportunities, government grants, and debt reduction. The Commission has also increased its education and outreach efforts.With this hearing, I hope we can learn more about the operation and ask what more must be done. Does the FTC have the resources and the authority to proactively protect consumers from such frauds and scams? And what role have the states played in this proactive effort?I want to welcome our witnesses and thank them for their work to protect the American public. I look forward to your testimony. And a special thanks to Subcommittee Chairman Pryor for presiding today and being such an outspoken advocate for the American consumer.No one deserves the potential ruin these schemes threaten. We have a responsibility to uncover them and provide consumers with the tools they need to avoid becoming victims of fraud and abuse.###
- Or the family attempting to modify their home loan and avoid foreclosure, paying exorbitant fees to a fraudulent third-party instead -- someone bearing no honest connection to their bank or the government whatsoever.
Witness Panel 1
Mr. David VladeckDirector, Bureau of Consumer ProtectionFederal Trade Commission
Mr. Chuck BellDirector of ProgramsConsumers Union
Ms. Sally GreenbergExecutive DirectorNational Consumers League
Mr. Timothy MurisFoundation Professor of Law, George Mason University School of LawOf Counsel O'Melveny & Myers LLP
The Honorable Chris KosterAttorney GeneralState of Missouri