Consumers Beware: Increased Risks During the COVID-19 Pandemic (House Hearing)
Summary
The printed record of a virtual hearing of the Subcommittee on Consumer Protection and Commerce of the House Committee on Energy and Commerce, Consumers Beware: Increased Risks During the COVID-19 Pandemic, on July 9, 2020, Serial No. 116-119. Chairwoman Jan Schakowsky opens the remote hearing, with opening statements also listed for Cathy McMorris Rodgers, Frank Pallone, Jr. and Earl L. Carter. Witnesses were Sally Greenberg, Executive Director of the National Consumers League; Tom Quaadman, Executive Vice President of the Chamber Technology Engagement Center; and Kevin Anderson, Senior Deputy Attorney General of the North Carolina Department of Justice. A prepared statement in the record refers to the Combating Pandemic Scams Act and to the use of technology to combat scams and fraudulent activity.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
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“Consumers Beware: Increased Risks During the COVID-19 Pandemic (House Hearing).”
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[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
______
CONSUMERS BEWARE: INCREASED RISKS DURING THE COVID-19 PANDEMIC
=======================================================================
VIRTUAL HEARING
BEFORE THE
SUBCOMMITTEE ON CONSUMER PROTECTION AND COMMERCE
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
SECOND SESSION
__________
JULY 9, 2020
__________
Serial No. 116-119
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
govinfo.gov/committee/house-energy
energycommerce.house.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
55-506 WASHINGTON : 2024
COMMITTEE ON ENERGY AND COMMERCE
FRANK PALLONE, Jr., New Jersey
Chairman
BOBBY L. RUSH, Illinois GREG WALDEN, Oregon
ANNA G. ESHOO, California Ranking Member
ELIOT L. ENGEL, New York FRED UPTON, Michigan
DIANA DeGETTE, Colorado JOHN SHIMKUS, Illinois
MIKE DOYLE, Pennsylvania MICHAEL C. BURGESS, Texas
JAN SCHAKOWSKY, Illinois STEVE SCALISE, Louisiana
G. K. BUTTERFIELD, North Carolina ROBERT E. LATTA, Ohio
DORIS O. MATSUI, California CATHY McMORRIS RODGERS, Washington
KATHY CASTOR, Florida BRETT GUTHRIE, Kentucky
JOHN P. SARBANES, Maryland PETE OLSON, Texas
JERRY McNERNEY, California DAVID B. McKINLEY, West Virginia
PETER WELCH, Vermont ADAM KINZINGER, Illinois
BEN RAY LUJAN, New Mexico H. MORGAN GRIFFITH, Virginia
PAUL TONKO, New York GUS M. BILIRAKIS, Florida
YVETTE D. CLARKE, New York, Vice BILL JOHNSON, Ohio
Chair BILLY LONG, Missouri
DAVID LOEBSACK, Iowa LARRY BUCSHON, Indiana
KURT SCHRADER, Oregon BILL FLORES, Texas
JOSEPH P. KENNEDY III, SUSAN W. BROOKS, Indiana
Massachusetts MARKWAYNE MULLIN, Oklahoma
TONY CARDENAS, California RICHARD HUDSON, North Carolina
RAUL RUIZ, California TIM WALBERG, Michigan
SCOTT H. PETERS, California EARL L. ``BUDDY'' CARTER, Georgia
DEBBIE DINGELL, Michigan JEFF DUNCAN, South Carolina
MARC A. VEASEY, Texas GREG GIANFORTE, Montana
ANN M. KUSTER, New Hampshire
ROBIN L. KELLY, Illinois
NANETTE DIAZ BARRAGAN, California
A. DONALD McEACHIN, Virginia
LISA BLUNT ROCHESTER, Delaware
DARREN SOTO, Florida
TOM O'HALLERAN, Arizona
------
Professional Staff
JEFFREY C. CARROLL, Staff Director
TIFFANY GUARASCIO, Deputy Staff Director
MIKE BLOOMQUIST, Minority Staff Director
Subcommittee on Consumer Protection and Commerce
JAN SCHAKOWSKY, Illinois
Chairwoman
KATHY CASTOR, Florida CATHY McMORRIS RODGERS, Washington
MARC A. VEASEY, Texas Ranking Member
ROBIN L. KELLY, Illinois FRED UPTON, Michigan
TOM O'HALLERAN, Arizona MICHAEL C. BURGESS, Texas
BEN RAY LUJAN, New Mexico ROBERT E. LATTA, Ohio
TONY CARDENAS, California, Vice BRETT GUTHRIE, Kentucky
Chair LARRY BUCSHON, Indiana
LISA BLUNT ROCHESTER, Delaware RICHARD HUDSON, North Carolina
DARREN SOTO, Florida EARL L. ``BUDDY'' CARTER, Georgia
BOBBY L. RUSH, Illinois GREG GIANFORTE, Montana
DORIS O. MATSUI, California GREG WALDEN, Oregon (ex officio)
JERRY McNERNEY, California
DEBBIE DINGELL, Michigan
FRANK PALLONE, Jr., New Jersey (ex
officio)
C O N T E N T S
----------
Page
Hon. Jan Schakowsky, a Representative in Congress from the State
of Illinois, opening statement................................. 2
Prepared statement........................................... 3
Hon. Cathy McMorris Rodgers, a Representative in Congress from
the State of Washington, opening statement..................... 4
Prepared statement........................................... 5
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 7
Prepared statement........................................... 8
Hon. Earl L. Carter, a Representative in Congress from the State
of Georgia, opening statement.................................. 9
Prepared statement........................................... 10
Hon. Richard Hudson, a Representative in Congress from the State
of North Carolina, prepared statement.......................... 75
Witnesses
Sally Greenberg, Executive Director, National Consumers League... 12
Prepared statement............................................... 15
Tom Quaadman, Executive Vice President, Chamber Technology
Engagement Center.............................................. 25
Prepared statement............................................... 27
Answers to submitted questions............................... 107
Kevin Anderson, Senior Deputy Attorney General, Director,
Consumer Protection Division, North Carolina Department of
Justice........................................................ 40
Prepared statement............................................... 42
Answers to submitted questions............................... 110
Submitted Material
Article ``IA Members Company Efforts to Ensure Fair Pricing
During the Pandemic,'' Internet Association, submitted by Ms.
Schakowsky..................................................... 77
Article ``IA Members are Combating Counterfeit Goods, Internet
Association,'' submitted by Ms. Schakowsky..................... 78
Letter of July 8, 2020, to Ms. Schakowsky and Ms. McMorris
Rodgers, from Steve Pasierb, President and CEO, Toy
Association, submitted by Ms. Schakowsky....................... 79
Article ``University engineers, architects design 3D-printed
nasal swabs'' submitted by Ms. Schakowsky...................... 84
Article entitled, ``Robots delivering food to college campuses
this fall'' submitted by Ms. Schakowsky........................ 87
Article entitled, ``Researchers develop new technique to print
electronic sensors directly on organs'' submitted by Ms.
Schakowsky..................................................... 91
Article entitled, ``Researchers Are Tapping Blockchain Tools in
Fight Against Coronavirus'' submitted by Ms. Schakowsky........ 93
Article entitled, ``How Gig Economy Companies are Stepping Up to
Help Americans Amid the COVID-19 Pandemic'' submitted by Ms.
Schakowsky..................................................... 97
Article entitled, ``How AI protects people from online scams''
submitted by Ms. Schakowsky.................................... 101
Statement from AAFA, submitted by Ms. Schakowsky................. 105
CONSUMERS BEWARE: INCREASED RISKS DURING THE COVID-19 PANDEMIC
----------
THURSDAY, JULY 9, 2020
House of Representatives,
Subcommittee on Consumer Protection and Commerce,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 12:00 p.m., via
Webex, Hon. Jan Schakowsky (chairwoman of the subcommittee)
presiding.
Members present: Representatives Schakowsky, Castor, Kelly,
O'Halleran, Lujan, Cardenas, Blunt Rochester, Soto, Rush,
Matsui, McNerney, Dingell, Pallone (ex officio), Rodgers
(subcommittee ranking member), Upton, Burgess, Latta, Guthrie,
Bucshon, Hudson, Carter, and Gianforte.
Also present: Representative Walberg.
Staff present: Billy Benjamin, Systems Administrator;
Jeffrey C. Carroll, Staff Director; Sharon Davis, Chief Clerk;
Lisa Goldman, Senior Counsel; Waverly Gordon, Deputy Chief
Counsel; Tiffany Guarascio, Deputy Staff Director; Alex Hoehn-
Saric, Chief Counsel, Communications and Consumer Protection;
Joe Orlando, Staff Assistant; Kaitlyn Peel, Digital Director;
Tim Robinson, Chief Counsel; Chloe Rodriguez, Policy Analyst;
Sydney Terry, Policy Coordinator; Anna Yu, Professional Staff
Member; Mike Bloomquist, Minority Staff Director; William
Clutterbuck, Minority Staff Assistant; Theresa Gambo, Minority
Human Resources/Office Administrator; Tiffany Haverly, Minority
Communications Director; Peter Kielty, Minority General
Counsel; Bijan Koohmaraie, Minority Deputy Chief Counsel,
Consumer Protection and Commerce; Ryan Long, Minority Deputy
Staff Director; and Brannon Rains, Minority Policy Analyst.
Ms. Schakowsky. The Subcommittee on Consumer Protection and
Commerce will now come to order.
Today, we will be holding a hearing entitled ``Consumer
Beware: Increased Risk During the COVID-19 Pandemic.''
Due to the COVID-19 public health emergency, today's
hearing is being held remotely. All the members----
Mrs. Rodgers. Hey, Jan, we can't hear you. I don't know.
Are you muted?
Ms. Schakowsky. I am unmuted.
Mrs. Rodgers. I can't hear you, at least not yet.
Ms. Schakowsky. OK. Can you hear me now?
Mrs. Rodgers. Not yet.
Ms. Schakowsky. I think it must be on your end then.
Mr. Rush. You are coming in loud and clear here.
Ms. Schakowsky. OK. Can any Republicans hear me?
Mrs. Rodgers. Is it just me? I am not hearing anybody.
Mr. Gianforte. Yes, Jan. This is Greg Gianforte. I can hear
you fine.
Ms. Schakowsky. OK. I am going to continue while somebody
helps fix the silent person. OK.
Due to the COVID-19 public health emergency, today's
hearing is being held remotely. All of the members and
witnesses will be participating via videoconference.
As part of our hearing, microphones will be set on ``mute''
for the purpose of eliminating inadvertent background noise.
Members and witnesses, you will need to unmute yourself, unmute
your microphone each time that you wish to speak.
Additionally, members will need to be visible on screen in
order to be recognized. I messed up with that before and got
out of order for my chance to speak, so be sure that if you are
on that we see you.
Documents for the record can be sent to Chloe Rodriguez at
the email address that we provided to all of the staff. And all
documents will be entered into the record at the conclusion.
We are going to go to members' opening statements, but if I
could take a moment of personal privilege to welcome Anna Yu
back from maternity leave. She gave birth to Cassia, who is I
think about three months old now, who joins her sister, Sage,
as part of the family.
So welcome back to the staff, Anna.
And so let me begin, then, with my opening statement for 5
minutes.
OPENING STATEMENT OF HON. JAN SCHAKOWSKY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ILLINOIS
Good morning, and thank you all for joining us today for a
virtual hearing on consumer protection in the COVID era.
The COVID-19 pandemic has changed the lives of nearly every
American consumer. In so many ways, technology has made the
isolation that many Americans face far more bearable than, say,
the social isolation experienced by Americans doing--far less,
I should say, far less unbearable than it was in the 1918
pandemic.
Unfortunately, the Trump administration hasn't risen to the
moment and has instead dithered and reflexively deterring--I am
sorry--deferring to the private sector instead of leading.
Even before the pandemic, consumers reported a feeling of
helplessness with respect to the digital economy. Despite the
Trump administration's counting on the private sector to play a
key role in the response and recovery, Big Tech has allowed
fraud, fake news, fake reviews, counterfeit and stolen products
to get into the marketplace.
Price gouging has continued most unfettered on platforms
because of our weak and uneven Federal response. That is why I
initiated and introduced the Price Gouging Prevention Act,
along with Chairman Pallone. It was included in the HEROES Act,
which Senator McConnell has yet to take up.
The current crisis has also laid bare our platforms' need
to be doing more to protect consumers and ensuring they have
the same rights online as they have when they go shopping in
person.
And that is why I am proud to be introducing an updated
version of the Informed Consumers Act. I would like to thank
Senators Durbin and Cassidy in the Senate for being partners on
that. And this commonsense legislation would ensure that
consumers have information that they need when an online seller
fails to deliver the goods or services that they were promised.
And I hope our colleagues on both sides of the aisle would
join us in supporting this important bill and that it might be
favorably reported by this subcommittee.
I am looking for the clock. Almost out. OK.
Transparency alone is simply not enough. Agencies like the
Consumer Product Safety Commission must aggressively be
stopping dangerous products that can actually kill or harm
Americans from reaching consumers.
The administration, however, has continued to prioritize
corporate interests over the safety of the public. And nowhere
is this clearer than in the continued support for Nancy Beck. I
will get into that more later, but Nancy Beck is the nominee
for the Consumer Product Safety Commission Chair.
[The prepared statement of Ms. Schakowsky follows:]
Prepared Statement of Hon. Jan Schakowsky
Good morning and thank you all for joining us today for a
virtual hearing on consumer protection in the COVID era. The
COVID-19 pandemic has changed the lives of nearly every
American consumer. And in so many ways, technology has made the
isolation many Americans face far more bearable than, say, the
social isolation experienced by Americans during the 1918
pandemic.
Unfortunately, the Trump Administration hasn't risen to the
moment, and has instead dithered, reflexively deferring to the
private sector instead of leading. Even before the pandemic,
consumers reported a feeling of helplessness with respect to
the digital economy. Despite the Trump Administration counting
on the private sector to play a key role in the response and
recovery, Big Tech has allowed fraud, fake news, fake reviews,
and counterfeit and stolen products to thrive on their
platforms.
Price-gouging has continued, mostly unfettered, on
platforms, because of a weak and uneven Federal response.
That's why I introduced the Price Gouging Prevention Act with
Chairman Pallone. It was included in the HEROES Act, which
Senator McConnell has sat on for months.
The current crisis has also laid bare how online platforms
need to be doing more to protect consumers, and ensure they
have the same rights online as they do when they're shopping in
person. That's why I am proud to be introducing an updated
version of the INFORM Consumers Act with my friend Richard
Hudson. I would like to thank Senators Durbin and Cassidy for
their partnership on this important matter. This commonsense
legislation would ensure that consumers have the information
they need when an online seller fails to deliver the good or
service they promised. I hope our colleagues on both sides of
the aisle will join us in supporting the bill, and that it
might be favorably reported by this committee very soon.
But transparency alone is not enough. Agencies, like the
Consumer Product Safety Commission (CPSC) must aggressively
stop dangerous products that can kill or harm Americans from
reaching consumers. The Administration, however, continues to
prioritize corporate interests over safety and public health.
Nowhere is this clearer than its continued support for Nancy
Beck's nomination as Consumer Product Safety Commission Chair.
Her resume tells the story of a career defined by disdain for
consumers, whom she has exposed to toxic chemicals and left
vulnerable to COVID-19. However, her nomination hearing
featured a different narrative - that she was just middle
management and was merely executing directives from the real
decision-makers. Either way, she is wholly unfit to hold this
prestigious title. The Administration needs to withdraw her
nomination and put someone forward who will put consumers
first.
The next Chair of the Consumer Product Safety Commission
must be a transformative figure with a vision to bring the
agency into the 21st century. She or he must implement a
strategic enforcement strategy that ensures foreign
manufacturers don't have a leg up on their American
counterparts due to weak or non-enforcement at ports of entry
and ensures that consumers are purchasing safe goods online. I
look forward to hearing from our witnesses, and now recognize
my friend and colleague, Ranking Member Rodgers.
Ms. Schakowsky. And, at this point, I will stop and put the
rest of my opening statement in the record and recognize our
ranking member, Mrs. Rodgers, for an opening statement.
OPENING STATEMENT OF HON. CATHY RODGERS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF WASHINGTON
Mrs. Rodgers. Good morning, Madam Chair. And I am sorry for
the interruption earlier. It was on my end, I guess. I wasn't
hearing. But I appreciate you bringing us together today.
I want to thank the witnesses for participating today. I
look forward to the expert testimony of our panel, and I value
your insights.
However, this hearing should also include the relevant
agencies in our jurisdiction. That includes the FTC, the CPSC,
which are essential to our mission to protect consumers. This
administration has made it a priority to protect Americans
during this health and economic crisis, and hearing directly
from the Commissioners should have been a part of today's
discussion.
In addition, while the subject matter for this hearing is
broad, I believe that there is a striking omission from the
background memo. Data privacy is the most fundamental consumer
protection we could advance.
And we should right now be working together. We
enthusiastically participated in good-faith negotiations with
the majority which preceded the COVID-19 outbreak. Although the
pandemic broke the rhythm of our talks, it has made the need
for a strong national privacy standard more urgent.
There are plenty of proposals out there. Notably, our
subcommittee has developed the only bipartisan staff draft on
either side of the Hill. My hope was that this draft would
serve as a foundation for a strong, bipartisan bill that we
could introduce together, Chair Schakowsky and myself.
There are also targeted proposals that include protections
during the pandemic, including one from Chair Schakowsky and
Chair Eshoo. To protect people's privacy, I am open to a
targeted proposal, but the partisan process and the product has
done serious harm to our bipartisan talks on a broader bill.
Frankly, partisan proposals have no chance of being signed
into law. If the majority chooses to come back to the
negotiation table, I know we can still pass a comprehensive,
bipartisan bill in the House.
If the point of targeted bills is that we want consumer
protections during this crisis, why don't we find an agreement
on a broader bill now and put a sunset date on it for us to
revisit it later?
This is not my first choice to a solution, but if we don't
act now and work together, I fear a few more years will slip
away before we see real action. And the result will be a bigger
patchwork of laws, and it will be impossible for people to
trust how their privacy is protected.
It has never been more important that we set a national
standard. More Americans are spending their days online than
ever before. There are many data-driven proposals for contact
tracing that have raised privacy concerns. Small and medium-
size businesses, who are already struggling to survive, must
now worry about being crushed by CCPA enforcement and frivolous
lawsuits.
Chairman Pallone tweeted that he wanted to pass a
comprehensive privacy bill by the end of this Congress. Let's
get it done. With our bipartisan draft, no one else is better
positioned to do this. Let's see how it works for a set period
and then negotiate to extend it with the added hindsight. If we
succeed, Americans won't be left with uncertainty over how
their data is collected during this pandemic and in the future.
Another area where certainty is needed is in liability
protection. For our economy to boom again, we must address the
liability uncertainty hanging over the heads of every small-
business owner out there. If we strike the right balance
between protecting the safety of our workers and protecting
employers from frivolous lawsuits, people can get back to work
safely and have the opportunity again to build a better life.
To win the future, we should also be focusing on the
importance of emerging technologies that enhance consumer
protection.
Generally, and in relationship to the pandemic, the Trump
administration has been at the forefront of American leadership
in emerging tech. For example, the Office of Science and
Technology Policy is leading a public-private partnership that
leverages AI and quantum computing in our fight against the
virus.
Many of the problems we are talking about here today could
be solved with progress in advanced materials, blockchain, and
quantum computing. Not only will these technologies help us
fight scams, unsafe products, and misinformation directly, they
will help us ensure that we lead the world and beat China,
which is the greatest source of fake and unsafe products and
dangerous information.
I thank you again, and I look forward to the discussion.
[The prepared statement of Mrs. Rodgers follows:]
Prepared Statement of Hon. Cathy Rodgers
Thank you, Chair Schakowsky, and thank you to our witnesses
for participating today.
I'm looking forward to the expert testimony of our panel
and value their insights.
However, this hearing should also include the relevant
agencies in our jurisdiction.
That includes the FTC and CSPC, which are essential to our
mission to protect consumers.
This Administration has made it a priority to protect
Americans during this health and economic crisis and hearing
directly from the Commissioners should have been a part of
today's discussion.
In addition while the subject matter for this hearing is
broad, there is a striking omission from the Majority's
background memo.
Data Privacy is the most fundamental consumer protection we
could advance and should right now be working on together.
We enthusiastically participated in good faith negotiations
with the Majority, which preceded the COVID-19 outbreak.
Although the pandemic broke the rhythm of our talks, it has
made the need for a strong national privacy standard more
urgent.
There are plenty of proposals out there. Notably, our
subcommittee has developed the only bipartisan staff draft on
either side of the Hill.
My hope was that this draft would serve as a foundation for
a strong, bipartisan bill I could introduce with Chair
Schakowsky.
There are also targeted proposals that include protections
during this pandemic, including one from Chair Schakowsky and
Chair Eshoo.
To protect people's privacy, I'm open to a targeted
proposal but the partisan process and product from my
colleagues did serious harm to our bipartisan talks on a
broader bill.
Frankly, partisan proposals have no chance of being signed
into law.
If the Majority chooses to come back to the negotiation
table, I know we can still pass a comprehensive bipartisan bill
in the House.
If the point of targeted bills is that we want consumer
protections during this crisis, why don't we find agreement on
a broader bill now and put a sunset date on it for us to
revisit it later?
This is not my first choice for a solution, but if we don't
act now and work together, I fear a few more years will slip
away before we see real action.
The result will be a bigger patchwork of laws and it will
be impossible for people to trust how their privacy is
protected.
It has never been more important that we set a national
standard.
More Americans are spending their days online
than ever before.
There are many data driven proposals for contact
tracing that have raised privacy concerns.
Small and medium sized businesses-who are already
struggling to survive-must now worry about being crushed by
CCPA enforcement and frivolous lawsuits.
Chairman Pallone tweeted that he wanted to pass a
comprehensive privacy bill by the end of this Congress.
Let's get it done. With our bipartisan draft, no one else
is better positioned to do this.
Let's see how it works for a set period and then negotiate
to extend it with the added hindsight.
If we succeed, Americans won't be left with uncertainty
over how their data is collected during this pandemic and in
the future.
Another area where certainty is needed is in liability
protections.
For our economy to boom again, we must address the
liability uncertainty hanging over the head of every small
business owner out there.
If we strike the right balance between protecting the
safety of workers and protecting employers from frivolous
lawsuits, people can get back to work safely and have the
opportunity again to build a better life.
To win the future, we should also be focusing on the
importance of emerging technologies that enhance consumer
protection.
Generally, and in relation to the pandemic, the Trump
administration has been at the forefront of American leadership
in emerging tech.
For example, the Office of Science and Technology Policy is
leading a public-private partnership that leverages AI and
quantum computing in our fight against the virus.
Many of the problems we are talking about here today could
be solved with progress in advanced materials, blockchain and
quantum computing.
Not only will these technologies help us fight scams,
unsafe products, and misinformation directly, they will also
help ensure we lead the world and beat China, which is the
greatest global source of fake and unsafe products and
dangerous misinformation.
Thank you again and I look forward to the discussion.
Ms. Schakowsky. I want to thank the ranking member.
And let me just say before I call on Mr. Pallone, our
chairman of the full committee, that, absolutely, we need to
work together. It is definitely my intention to continue to
meet with you, to talk about both the short term, during this
pandemic, privacy issues and the long term. And I thank you for
raising that.
And now let me call on the chairman of the full committee
for his 5 minutes for an opening statement.
Mr. Pallone?
OPENING STATEMENT OF HON. FRANK PALLONE, Jr., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you, Chairwoman Schakowsky.
And today we are continuing your subcommittee's work of
protecting consumers by examining the increased risk that
consumers face from scams and unsafe products during the COVID-
19 pandemic.
And while the direct loss of life is the most terrible
consequence of the pandemic, its devastation extends beyond the
infection. Tens of millions of people have lost their jobs. And
the pandemic has also completely upended American life, forcing
Americans to dramatically change how they work, how they learn,
how they socialize.
In New Jersey, data shows people were spending 98 percent
of their time at home during the peak of the outbreak here in
April. And, now, with COVID-19 infections surging across the
country, this new normal looks like it is going to last a long
time.
The health experts tell us that we are safer at home, but
more time at home can also result in risks to consumers'
health, safety, and financial well-being. Young children, for
example, are particularly at risk to household threats, as
parents, struggling to juggle work and childcare, are more
likely to inadvertently leave their unsupervised, you know,
young person or children, and there is more potential for
injury from household dangers, for example. And for older
Americans and senior citizens, months on end with little
interpersonal contact and support has left them particularly
vulnerable to the fraudsters preying on their isolation.
So, in March, just before much of the country went on
lockdown, the subcommittee had a hearing to examine the
proliferation of fake and unsafe products in the online
marketplace. And while e-commerce has become something of a
lifeline for many Americans sheltering at home, it has also
laid bare the ubiquity of unsafe and counterfeit products, as
well as this truth that scammers abound, making what is already
a nightmare even worse.
And Americans have purchased bogus treatments and sham
testing kits from unscrupulous sellers that flood social media
sites. Even hospitals have fallen victim to inadvertently
purchasing counterfeit face masks that put the lives of our
frontline health workers at risk.
With widespread shortages and supply chain delays on key
medical equipment and household essentials, opportunistic
sellers are also price gouging consumers.
And I think we have made some job gains in the last few
months, but, still, nearly 18 million Americans are still
unemployed. Scammers are exploiting Americans struggling
financially, including by targeting their stimulus checks and
unemployment benefits. Scammers have come with new versions of
the old scams, posing as the government, fundraising for fake
charities, among other things.
And I think that the ongoing pandemic is no excuse to stop
our vigilance on these consumer-protection threats. So I am
proud to have joined you, Madam Chair, in introducing the
COVID-19 Price Gouging Prevention Act, which prohibits the sale
of consumer goods and services at unconscionably excessive
prices. This legislation was included in the HEROES Act, which
the House passed in May.
And social media platforms also need to do their part to
protect American consumers. Yesterday, along with Subcommittee
Chairs Schakowsky, Doyle, and DeGette, I sent a letter to
Facebook, Google, and Twitter requesting regular monthly
updates on their response to COVID-19 disinformation.
The troubling rise in COVID-19 disinformation is driving
fear and conspiracy theories and impairing consumers' ability
to make rational and informed purchasing decisions and pushing
consumers into the very traps of scammers peddling unproven and
unbranded or misbranded products.
So I look forward to this hearing. I have no doubt that
what you are doing, Jan, is more important than ever given the
COVID crisis, because, you know, I know that--I am in my
district office in Long Branch today. We are still closed; we
are still operating virtually. But we are getting all kinds of
calls from people talking about price gouging and scams. So
this is a particularly important hearing.
And I want to thank the witnesses as well.
I yield back.
[The prepared statement of Mr. Pallone follows:]
Prepared Statement of Hon. Frank Pallone, Jr.
Today we will continue this Subcommittee's work of
protecting consumers by examining the increased risks that
consumers face from scams and unsafe products during the COVID-
19 pandemic.
Each day, the pandemic seems to reach a new grim milestone
with more than 130,000 people in the United States killed and
cases skyrocketing all across the country.
While the direct loss of life is the most terrible
consequence of the pandemic, its devastation extends beyond the
infections. Tens of millions of people have lost their jobs.
The pandemic has also completely upended American life, forcing
Americans to dramatically change how they work, learn, and
socialize.
In my home state of New Jersey, data shows people were
spending 98 percent of their time at home during the peak of
the outbreak there in April. And now, with COVID-19 infections
surging across the country, this new normal looks like it will
last a long time.
The health experts tell us we are safer at home, but more
time at home can also result in risks to consumer health,
safety, and financial well-being.
Young children are particularly at risk to household
threats, as parents, struggling to juggle work and childcare,
are more likely to inadvertently leave them unsupervised
leading to more potential for injuries from household dangers.
For older Americans and senior citizens, months on end with
little interpersonal contact and support have left them
particularly vulnerable to fraudsters preying on their
isolation.
In March, just before much of the country went on lockdown,
this Subcommittee held a hearing examining the proliferation of
fake and unsafe products on online marketplaces. At that
hearing, we saw the uphill battle that consumers face against
the deceptive practices of unscrupulous sellers, especially
combined with the lax enforcement of policies of online
platforms.
While e-commerce has become something of a lifeline for
many Americans sheltering at home, it has also laid bare the
ubiquity of unsafe and counterfeit products, as well as the
stark truth that scammers abound--making what's already a
nightmare even worse.
Americans have purchased bogus treatments and sham testing
kits from unscrupulous sellers that flood social media sites.
Even hospitals have fallen victim, inadvertently purchasing
counterfeit face masks that put the lives of our frontline
health workers at risk. With widespread shortages and supply
chain delays on key medical equipment and household essentials,
opportunistic sellers are also price gouging consumers.
And while we've made some job gains, nearly 18 million
Americans are still unemployed. Scammers are exploiting
Americans struggling financially, including by targeting their
stimulus checks and unemployment benefits. Scammers have come
up with new versions of the old scams-posing as the government
and fundraising for fake charities, among others. The fear and
confusion brought about by the COVID-19 pandemic has given
their old schemes new potency.
The ongoing pandemic is no excuse to stop our vigilance on
these consumer protection threats. I am proud to have joined
Chair Schakowsky in introducing the COVID-19 Price Gouging
Prevention Act, which would prohibit the sale of consumer goods
and services at unconscionably excessive prices during a public
health emergency. This legislation was included in the Heroes
Act, which passed the House in May. This comprehensive
coronavirus response is still sitting in the--it's inexcusable
that nearly two months later Senate Majority Leader McConnell
has yet to act.
Social media platforms also need to do their part to
protect American consumers. Yesterday, along with Subcommittee
Chairs Schakowsky, Doyle, and DeGette, I sent a letter to
Facebook, Google and Twitter requesting regular, monthly
updates on their response to COVID-19 disinformation. The
troubling rise in COVID-19 disinformation is driving fear and
conspiracy theories, impairing consumer ability to make
rational and informed purchasing decisions and pushing
consumers into the very traps of scammers peddling unproven and
misbranded products.
I look forward to hearing from our expert witness panel on
the scope and scale of these consumer protection issues and how
we can protect ourselves from these threats.
Thank you, I yield back.
Ms. Schakowsky. The gentleman yields back.
And now the Chair recognizes, as I understand it, Mr.
Carter, who will be taking the place of the--right now as the
ranking member of the full committee for today.
So, Mr. Carter, you are recognized for 5 minutes for your
opening statement.
OPENING STATEMENT OF HON. EARL L. CARTER REPRESENTATIVE IN
CONGRESS FROM THE STATE OF GEORGIA
Mr. Carter. Madam Chair, did you say it was just for the
day? I thought it was permanently. Dadgum.
Madam Chair, thank you for holding today's hearing and for
the committee's efforts to highlight the issues facing
consumers during this pandemic.
Every day, we hear and see stories about people utilizing
this time to scam, defraud, and steal money from our fellow
citizens. We are living through unprecedented times and we are
seeing bad actors try to take advantage of Americans during
this pandemic.
I am pleased to see the Trump administration step up and
fight back. Earlier this year, President Trump signed an
Executive order on hoarding and price gouging, and we have seen
the Federal Trade Commission ramp up its efforts to both
educate consumers and pursue actions against bad actors.
Whether it is price gouging on personal protective
equipment or scamming money from senior citizens, there is a
continued need for agencies like the FTC to work with private-
sector partners to strengthen protections for Americans.
I think it is also important to look at the progress that
has been made by the FTC during this pandemic. They certainly
have met this challenge. Since January, there have been over
122,000 reports to the FTC regarding fraud and other
unsolicited activities. Of that number, 63,000 were for fraud,
for a total loss of $79 million.
The FTC has done a good job of fighting this behavior, but
they haven't done it alone. The private sector has taken a
proactive approach in protecting their customers and negating
these fraudulent actions. It is this continued partnership that
can ensure maximum effectiveness while addressing all aspects
of the problems we are seeing popping up across the country.
I have introduced bipartisan legislation, the Combating
Pandemic Scams Act, which is designed to strengthen the
partnership between Federal agencies overseeing these issues.
They would be required to disseminate that information to the
public, including how to spot and report these scams in a way
that is easily accessible and digestible and in a manner that
prioritizes senior citizens and people with infirmities and
disabilities.
I firmly believe that more action in this space will help
us, as a committee, address these actions across the country.
Americans around the U.S. should be able to protect themselves,
and one way to do that is by arming them with up-to-date
information on the practices to avoid. If they can spot this
and report it to the appropriate agencies, they can help to
protect their neighbors and communities.
I look forward to today's hearings and our efforts to
protect Americans against fraud, and I hope that we will be
able to continue bipartisan dialogue on solutions. I believe
this is an area where we can find common ground, and today's
hearing is a step in the right direction.
[The prepared statement of Mr. Carter follows:]
Prepared Statement of Hon. Earl L. Carter
Madame Chair, thank you for holding today's hearing and for
the committee's efforts to highlight the issues facing
consumers during this pandemic.
Everyday, we hear and see stories about people utilizing
this time to scam, defraud, and steal money from our fellow
citizens.We are living through unprecedented times and are
seeing bad actors try to take advantage of Americans during
this pandemic.
I am pleased to see the Trump Administration step up and
fight back. Earlier this year, President Trump signed an
Executive Order on hoarding and price gouging and we have seen
the Federal Trade Commission ramp up its efforts to both
educate consumers and pursue actions against bad actors.
Whether it's price gouging on personal protective equipment
or scamming money from senior citizens, there is a continued
need for agencies like the FTC to work with private sector
partners to strengthen protections for Americans.
I think it's also important to look at the progress that
has been made by the FTC during this pandemic--they certainly
have met this challenge.
Since January, there have been over 122,000 reports to the
FTC regarding fraud and other unsolicited activities.
Of that number, 63,000 were for fraud for a total loss of
$79 million.
The FTC has done a good job of fighting this behavior, but
they haven't done it alone.
The private sector has taken a proactive approach in
protecting their customers and negating these fraudulent
actions.
It is this continued partnership that can ensure maximum
effectiveness while addressing all aspects of the problems
we've seen popping up across the country.
I have introduced bipartisan legislation, the Combating
Pandemic Scams Act, which is designed to strengthen the
partnership between federal agencies overseeing these issues.
They would be required to disseminate that information to
the public, including how to spot and report these scams, in a
way that is easily accessible and digestible and in a manner
that prioritizes senior citizens and people with infirmities
and disabilities.
I firmly believe that more action in this space will help
us, as a committee, address these actions across the country.
Americans around the U.S. should be able to protect
themselves and one way to do that is arming them with up-to-
date information on the practices to avoid.
If they can spot this and report it to the appropriate
agencies, they can help to protect their neighbors and
communities.
I look forward to today's hearing and our efforts to
protect Americans against fraud, and I hope that we will be
able to continue bipartisan dialogue on solutions.
I believe this is an area where we can find common ground
and today's hearing is a step in the right direction.
With that, I want to yield my remaining time to my
colleague, Mr. Hudson of North Carolina.
Mr. Hudson. Thank you, Mr. Carter.
And thank you, Madam Chair.
Before I begin, let me first extend a very special welcome
to one of our witnesses, Kevin Anderson of the North Carolina
Department of Justice.
In North Carolina, we have seen pervasive attempts to
defraud consumers, especially among elderly populations. Last
month, over $310,000 was lost to COVID-related scams in our
State. Additionally, NCDOJ has received 4,908 reports of
illegal robocalls since the beginning of the COVID pandemic.
This is just a small slice of what is happening across the
country but illustrates the importance of addressing this
issue.
We appreciate you joining us today, Mr. Anderson, and we
look forward to your testimony.
For the past several months, the United States, along with
the rest of the world, has grappled with COVID-19 and its
impact on our health, safety, and way of life. But not only has
COVID-19 proven to be a daily disease, it has created an
environment for nefarious actors to take advantage of people.
During our hearing on misinformation in the digital age, I
discussed efforts I have taken to prevent the online sale and
abuse of opioids. I believe we must take a similar approach to
prevent the sale of deliberately misleading medications as it
relates to COVID-19.
I am proud to join Mr. Carter as an original cosponsor of
the Combating Pandemic Scams Act and am pleased to see how the
use of emerging technologies has not only allowed individuals
to stay connected during this historic pandemic but also
enabled us to leverage new resources to combat the scams and
fraudulent activity.
I am also thankful that there have been significant efforts
by President Trump's administration and the private businesses
taking action to eliminate deceptive behavior before they
negatively impact our consumers. Together, they have shown the
need for more public and private sector working together.
I look forward to working with my colleagues on both sides
of the aisle to stay ahead of the changing nature of these
scams.
And, with that, Madam Chair, I will yield back the
remaining 20 seconds of our time. Thank you.
Ms. Schakowsky. The gentlemen yield back.
And now the Chair would like to remind members that,
pursuant to committee rules, all Members' written opening
statements shall be made part of the record.
[The information appears at the conclusion of the hearing.]
Ms. Schakowsky. And now I have the pleasure to introduce
our witnesses for today's hearing.
Sally Greenberg is executive director of the National
Consumers League, which I understand is a well-over-100-years-
old organization.
Thomas Quaadman is executive vice president of the Center
for Capital Markets Competitiveness, the Chamber Technology
Engagement Center and the Global Innovation and Policy Center
at the U.S. Chamber of Commerce.
And Kevin Anderson, senior deputy attorney general and
director of the Consumer Protection Division at the North
Carolina Department of Justice.
We want to thank our witnesses for joining us today. We
look forward to your testimony.
And, Ms. Greenberg, you are now recognized for 5 minutes.
STATEMENTS OF SALLY GREENBERG, EXECUTIVE DIRECTOR, NATIONAL
CONSUMERS LEAGUE; THOMAS QUAADMAN, EXECUTIVE VICE PRESIDENT,
CENTER FOR CAPITAL MARKETS COMPETITIVENESS, CHAMBER TECHNOLOGY
ENGAGEMENT CENTER, GLOBAL INNOVATION POLICY CENTER, U.S.
CHAMBER OF COMMERCE; AND KEVIN ANDERSON, SENIOR DEPUTY ATTORNEY
GENERAL, DIRECTOR OF THE CONSUMER PROTECTION DIVISION, NORTH
CAROLINA DEPARTMENT OF JUSTICE
STATEMENT OF SALLY GREENBERG
Ms. Greenberg. Thank you so much. Good morning, or good
afternoon, depending on what time zone you are in, Chairwoman
Schakowsky, Ranking Member McMorris Rodgers, and members of the
subcommittee. And thanks to the tremendous staff work that has
gone into putting this very important hearing together.
My name is Sally Greenberg. I am executive director of the
National Consumers League. And, indeed, we have been around for
over 120 years. I so appreciate your giving the NCL the
opportunity to provide the subcommittee with our views on the
increased risk of consumer fraud stemming from the COVID-19
pandemic.
The COVID-19 pandemic has created an unprecedented tsunami
of scams. A combination of rampant fear and misinformation
about the virus combined with an economic catastrophe has made
consumers more vulnerable than ever.
Consumers are telling us about scammers stealing stimulus
or unemployment checks, price gouging for in-demand items such
as protective masks and gloves, sales of fake healthcare
products claiming to treat or cure or vaccinate against COVID-
19, and companies refusing consumer refunds for things like
concerts or sporting events that have been canceled. As one
headline put it about the COVID-19 pandemic, it has been pure
hell for far too many consumers.
The statistics about fraud linked to COVID-19 are sobering.
Since the beginning of 2020, the Federal Trade Commission has
received more than 122,000 complaints about scams, identify
theft, and other types of fraud linked to COVID-19. And the FTC
data is likely just the tip of the iceberg.
In April alone, Google announced that it was tracking more
than 18 million malware and phishing emails related to COVID-19
per day. The Secret Service recently testified over in the
Senate, in the Senate Judiciary Committee, that at least $30
billion will end up in the hands of criminals.
And the Department of Labor's inspector general has
estimated that there could be at least $26 billion in wasted
unemployment insurance funds paid out, with a large portion
attributable to fraud. And, in fact, in Washington State alone,
criminals reportedly collected as much as $650 million in such
unemployment benefits.
Fraud linked to COVID-19 is a threat to public health as
well. The pandemic has been a boon to scammers selling bogus
coronavirus cures, vaccines, testing kits, and CBD-infused,
immunity-boosting products. At best, those products are
ineffective; at worst, they can be dangerous or even deadly,
particularly if a consumer is relying on such quack medicines
instead of taking steps to reduce the risk of contracting the
virus or seeking treatment when symptoms appear.
Since March, the FDA has sent 80 warning letters to
purveyors of fraudulent COVID-19 treatment products, and the
Federal Trade Commission has warned more than 250 companies for
similar conduct.
The pandemic is also exacerbating the threat posed by
unsafe products in the home. As the subcommittee has noted,
since the beginning of the pandemic, child drownings, calls to
Poison Control, and other hazards related to in-home products
have all increased as we all shelter in place.
The CPSC's website currently features a prominent notice
warning consumers that remedies identified in its recall alerts
may not be available due to the pandemic. The pandemic has also
temporarily prevented some companies from accepting back
recalled items.
And while we are encouraged by the governmental approach to
fighting back against COVID-19 scams, more needs to be done, in
our view, to protect the public from the torrent of fraud and
unfair and deceptive marketplace practices that threaten to
overwhelm millions of consumers. The scourge of the coronavirus
will not be significantly reduced by enforcement and consumer
education alone. In particular, policy steps to address
scammers' reliance on vulnerable payment systems are needed to
augment enforcement and education.
For example, we have on the books the Electronic Fund
Transfer Act and the Fair Credit Billing Act, which provide
consumers with important liability protections when credit
cards and debit cards are involved and used fraudulently. And
we believe those kinds of protections should be extended to
other payment mechanisms that fraudsters use, such as wire
transfers, gift cards, and bank accounts.
At the NCL Fraud Center--we have the URL fraud.org, so we
know a lot about fraud--we are also receiving a steady stream
of reports of scammers using peer-to-peer payment services like
PayPal's Friends and Family, Venmo, Zelle, and CashApp to
defraud consumers. And we recently met with PayPal to discuss
how the users of their services could be better protected.
And while these initial meetings have been encouraging, we
urge members of this subcommittee to work with colleagues on
Financial Services and other committees of jurisdiction to
develop policies that better protect users of peer-to-peer
payment services from fraud of all kinds, particularly scams
linked to COVID.
Chairwoman Schakowsky, on behalf of the National Consumers
League, we thank you for your continuing work to protect the
public from scams and for including the consumer perspective as
you consider these important issues.
Thank you.
[The prepared statement of Ms. Greenberg follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Ms. Schakowsky. Well, thank you.
And now Mr. Quaadman is recognized for 5 minutes.
STATEMENT OF THOMAS QUAADMAN
Mr. Quaadman. Thank you, Chairwoman Schakowsky, Ranking
Member McMorris Rodgers, members of the subcommittee. I
appreciate the opportunity to testify before you today.
COVID-19 has had profound impacts on our society. It has
changed how people live, work, learn, and how they provide for
their daily needs. It has changed how businesses operate and
how they interact with their customers. It has also revealed
shortcomings in the digital ecosystem and both our private and
public ecosystems.
Addressing these issues will help everyday Americans get
through the crisis, assist in finding vaccines and treatments,
create the marketplace of the future, provide consumers with
more information, choices, and opportunities, and establish new
efficiencies in the private and public sectors while promoting
opportunities for economic recovery and job creation.
The business community and tech industry have been rising
to meet these challenges.
Splunk, TransUnion, and Salesforce have been leading a
data-driven approach to track COVID-19 and help businesses
reopen. HERE, SAS, SAP, and Facebook have systems helping with
mapping and tracking of COVID-19. IBM, Oracle, RELEX, SAP,
Google, and Microsoft are using databases, supercomputing,
cloud, and AI technology to help with medical research.
TransUnion is providing consumers with free weekly credit
reports as well as giving tools to help consumers to protect
their identity and credit. Amazon and 3M are fighting price
gouging. Amazon is removing counterfeit products from its
platforms.
AT&T, Charter, Comcast, and Verizon are keeping people
connected regardless of their ability to pay. Intel, AT&T, and
Charter are helping low-income students with distance learning.
Uber, Lyft, and Postmates are providing aid to their workers.
Instacart is in the process of or has hired 550,000 shoppers to
help with on-demand grocery delivery.
The Chamber, since mid-March, has convened almost 200,000
people to explore resolution of these issues, to help educate
businesses on reopening, as well as to help with relief
efforts.
Indeed, the Global Brands Council of our Global Innovation
Policy Center has developed and published a guide for consumers
on how they can identify and avoid counterfeit goods. Indeed,
the Global Brands Council has been working with DHS and other
government agencies to get counterfeit goods out of the
marketplace.
Other actions must be taken to assist consumers and spur
economic recovery and job creation. America needs a national
data privacy bill. Our counterparts have a unitary regulatory
system, whereas we have a patchwork of State and Federal
regulations. We need one system of regulation to provide
uniformity for consumers and businesses throughout the United
States. We also need to address the cost of implementation. The
California CCPA regulations will cost small businesses $50,000
each with implementation. We need to ensure that consumers have
the privacy protections that they need and that we can make
sure that the U.S. is competitive in a global economy.
Americans need connectivity to provide for families and to
be productive. Broadband deployment, including 5G, and the
resolution of remote learning issues are important steps
forward. The Chamber, in the last 10 days, has issued
principles on broadband deployment and closing the homework
gap. We must also develop strategies to ensure U.S. global tech
leadership, such as rational policies for AI, automated
vehicles, and UAS. These will all be important drivers of
economic growth.
While promoting technology leadership, industry and
Congress must work together to prevent scams amongst our most
vulnerable, ensuring consumers are getting the products they
were purchasing, and establishing safe work environments.
Businesses also need temporary, targeted, and timely liability
provisions in order to reopen and operate during the COVID
emergency.
Let me be clear: Bad actors must be held accountable and
prosecuted to the full extent of the law, but Congress must set
a floor to help create a uniform safe harbor in a federalist
system. This has been done in other COVID legislation. If
businesses are following the law or State guidelines, they
shouldn't be sued.
We look forward to working with the subcommittee on these
issues, and I am happy to take any questions you may have.
[The prepared statement of Mr. Quaadman follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Ms. Schakowsky. Thank you.
And now, Mr. Anderson, you are recognized for 5 minutes.
STATEMENT OF KEVIN ANDERSON
Mr. Anderson. Thank you. Good afternoon. It is good to be
here today.
I would like to thank the Chair and the ranking member and
the members of the subcommittee for the opportunity to appear
today and for the attention the subcommittee is paying to this
important issue.
I would like to thank Representative Hudson for the nice
words earlier. Good to see someone else from North Carolina,
Representative Hudson, and hope you are doing well.
Again, I am Kevin Anderson. I have been doing consumer-
protection work in our office in the North Carolina Department
of Justice for over 21 years. I have worked under three
different attorneys general, including the current attorney
general, Josh Stein, who is also the co-chair of the National
Association of Attorneys General's Consumer Protection
Committee. And thank you again for the opportunity to provide
our perspective today, or my perspective today.
COVID-19 scams are very damaging to the public and are
causing enormous harm during these difficult and challenging
times. Consumer-protection authorities know from experience
that, when a crisis hits, scammers emerge to deceive the
public, and this crisis has been no different. Of course, this
crisis has been of unusual and unprecedented impact and
duration, so the scams have been even more damaging here.
State attorneys general and consumer-protection divisions
are on the ground and on the front lines protecting consumers.
And there has been a tremendous amount of work going on all
across the country in efforts to educate consumers about scams
and stop scams and protect consumers from scams.
Each State is hearing different types of things from its
consumers. Some scams are nationwide in scope; others are more
localized. And I have provided a long list of examples in my
testimony about the types of things States are hearing about
from consumers. I won't repeat all of them in detail here in my
summary, but some of the ones that may be particularly
noteworthy are the stimulus check scams, the scams involving
COVID-19 testing and miracle cures, and some recent scams that
have emerged regarding contact tracing.
And then, of course, States, as others have mentioned, are
seeing price gouging and price gouging in connection with items
that we don't normally see in another type of state-of-
emergency situation, such as a hurricane. So some of the price-
gouging matters we are seeing are new to us here.
And there are different matters being investigated by
States all over the country. I have included some examples in
my testimony of some of the things that we have done in North
Carolina. We have a price-gouging case that is pending that we
have brought against a towing company that was charging
thousands and thousands of dollars, booting trucks that were
delivering needed supplies and goods in an early stage of the
crisis to stores, and charging amounts that were way out of
line with market rates for those tows. So we sued that company
in a price-gouging case.
There are a number of matters involving scams that we have
managed to stop and nip in the bud by acting quickly and
sending some letters out.
And one thing I want to note here is the, to use a
technical term, whack-a-mole nature of some of these scams,
where the true scammers don't want to be found, and they try to
hide themselves. They make it difficult to be located. And
then, once the scam has been enacted and they have struck, they
like to disappear quickly so that they can't be tracked down.
And that is just the reality of some of these outright
criminal-type scams that are going on.
One of the things I think that points out is the importance
of educating consumers here or trying to make consumers
informed, make them less likely to fall for the scams. If you
can prevent the scams from the outset and prevent the consumers
from sending their money away, especially via a form of
payment, such as a wire transfer or a bank transfer or a gift-
card exchange, where the money becomes very difficult to track
back once it has been sent out, it is really best to prevent
scams before they occur.
And one of the important things I think the subcommittee is
doing today is, by having hearings like this today, it is a
good way of shedding light on the scams and bringing them into
public eye. So I think that is very valuable.
States play an important role in fighting these matters. It
is a matter that really requires attention on all sorts of
fronts, State and Federal. I appreciate the opportunity to
provide the perspective of the States here, because the States
do play a very important role in consumer protection. And,
again, we are right on the ground; we hear directly from our
consumers almost every day. It is a never-ending battle,
fighting all of these scams.
I am happy to answer any questions you have, happy to be of
help in any way that I can to the subcommittee. And thank you
again for the opportunity to be here today.
[The prepared statement of Mr. Anderson follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Ms. Schakowsky. Well, thank you very much.
So we have now concluded witnesses' opening statements. At
this time, we will move to member questions. Each member will
have 5 minutes to ask a question of the witnesses. And I want
to remind you, please, to unmute when it is your turn.
And I am going to begin with my questions.
So the Federal Trade Commission has received a record
number of online shopping complaints in April and May. Some of
them are really important things for face masks and hand
sanitizers and toilet paper and found that they never received
those products. A surge of bogus treatments and substandard
masks, et cetera, have been delivered.
So, Mr. Anderson, as you said, you have been doing this for
more than two decades. How has e-commerce, including the new
pandemic-induced reliance on online shopping made it easier
than ever for scammers to get involved?
Mr. Anderson. Well, this is one of these things, I think,
where technology and when items are sold online, in some ways
it does make it easier for the scammers. If they are operating
remotely, if they are selling from overseas, if they are making
it difficult, you know, for consumers to really even figure out
who is actually making the sale, that can pose some obstacles
and challenges, no question. In some ways, it does increase the
opportunity for some of these scams.
We often try to encourage consumers, when they are buying
online, to do as much research as they can regarding the
companies that they are buying from to see if there is any
track record of problems there or if it is a reputable seller.
But there is no question that, when sales are occurring
online and, in particular, if it is difficult to determine and
track down who is actually making the sales and if they are
coming from overseas and from a seller that is new and maybe
not reputable, it can increase some of the opportunities for
fraud. It is one of those things where technology has many
benefits for consumers and all of us, but there can be dangers
as well.
And I would say, generally, scammers are always looking to
hide. I mean, back many years ago, scammers would pop up door-
to-door and try to sell things to people and just disappear.
And the more modern version of that is using technology and
disappearing via the internet.
So it is a good question, and I think that is what I would
say.
Ms. Schakowsky. Thank you.
You know, it seems like a major obstacle to bringing
successful actions is simply locating the scammer. And you
refer to that. I am working on legislation that would require
online marketplaces to verify and to disclose to consumers the
seller's name, business address, email address, and phone
number.
So let me ask Ms. Greenberg, how would such legislation
deter bad actors?
Ms. Greenberg. Well, first of all, we support your
legislative efforts in this whole area, because a fundamental
pillar of consumer protection is to know who you are buying
from and, if you have a problem with a product, to be able to
get in touch with the seller of that product.
So what you just described, to verify the name of the
business, where the business is located, how you reach out to
them if you have a problem--either you didn't get the product
or the product was defective when it came--those are absolutely
fundamental protections, and we support them for consumers.
Consumers are very trusting, you know. If they buy
something online at a platform like Amazon, they will believe
that that product came from a legitimate source, that they will
get the product that they are paying for. But they need to have
information so they can take action when the product they buy
online turns out to be counterfeit or defective.
So, yes, we support that, and we think it is a basic
consumer protection.
Ms. Schakowsky. Let me just conclude with this. I am very
concerned about the nomination of Dr. Beck to head up the
Consumer Product Safety Commission. And it seems to me this is
a critical time when we need somebody with the right
credentials.
And I wanted to ask you, Ms. Greenberg, what you think,
given her record at the EPA and her role at the CDC, if she is
the appropriate person.
Ms. Greenberg. Right. Well, we have joined 120 other
groups, consumer organizations and other advocacy
organizations, that believe that the CPSC needs a leader who
has a track record of pursuing stronger consumer-protection
regulations. And, unfortunately, Dr. Beck has spent much of her
career seeking to weaken such regulations, particularly as they
pertain to dangerous chemicals. We think that the CPSC needs a
leader who will strengthen consumer protections, not roll them
back.
And, as you know, your colleagues on the Senate side,
including Senator Capito and Senator Collins, have come out
opposing Dr. Beck's nomination as the wrong person to run a
consumer-protection agency.
Ms. Schakowsky. I thank you for that.
And now I recognize the ranking member for her 5 minutes of
questions.
Mrs. Rodgers. All right. Thank you, Madam Chair.
Before I begin my questions, I would like to ask unanimous
consent to offer an article for the record highlighting the
current use of AI to combat schemes.
Ms. Schakowsky. Yes. All documents will be put in the
record at the end of this hearing.
Mrs. Rodgers. Thank you.
Trial lawyers and special interest groups have stopped a
number of commonsense policies before this committee. In the
past year alone, we have seen the trial bar obstruct bills that
would have protected people from asbestos, prevented frivolous
medical malpractice lawsuits, ensured the U.S. lead in
autonomous vehicles, and give Americans strong privacy
protections across the country. I believe that we cannot afford
to allow them to stand in the way of America reopening and
getting workers back to work.
Mr. Quaadman, how important is it for Congress to address
liability uncertainty during this unprecedented time? And how
will that help America get back to full strength?
Mr. Quaadman. Thank you for that question, Ranking Member.
It is very critical, in order for the U.S. to reopen, that
we have liability relief. It needs to be temporary, targeted,
and timely. If companies are following State laws and
guidelines in reopening, they shouldn't be sued.
And this isn't only the business community that is being
impacted. It is educational facilities. It is not-for-profits.
There are actually State agencies that are having similar
problems.
I would also say, too, Congress has also recognized this
issue as well with COVID-19 legislation that has already
passed. There has been liability relief for medical volunteers
as well as those who are manufacturing ventilators.
So this is a very critical step in order for businesses and
America to reopen.
Mrs. Rodgers. Thank you.
We are living in unprecedented times that have forced
millions of Americans, at no fault of their own, to stay home
and rely on the internet to seek medical advice, connect with
loved ones, and educate their children. As more people turn to
online services, we need that national privacy framework, and
that need only increases.
Mr. Quaadman, I would like to ask if you agree that it is
critical that we pass a Federal privacy law that sets one
national standard to ensure consumer protections are the same
across the country.
Mr. Quaadman. We believe that is a very important step that
we need to take, as well as an important consumer-protection
step.
We currently have a State-based and federalist system, and
we have five different forms of privacy regimes that are
currently being developed within the States. Obviously, the
CCPA out in California is the best known. But if you take a
look at our international counterpart, they have only one
system of regulation.
So we are currently going down a path where neither
consumers nor businesses actually have the certainty that they
need to operate digitally. So we believe it is very important
for such legislation to pass.
And I would also say, too, there is a cost involved as
well. When you take a look at the CCPA regulations, those will
cost small businesses $50,000 to implement. So that is a very
tremendous cost, and we need to have one system to deal with
this.
Mrs. Rodgers. Thank you.
During this crisis, I think we have all heard so many
different stories of American ingenuity and American creativity
solving problems, and I think American innovation is so
important as we move forward. We must ensure that we do not
fall behind other countries as we emerge from this
unprecedented crisis.
We know China is moving full speed ahead. To beat China, we
must prioritize our industries and ensure that the U.S. remains
the global innovation leader around emerging technology.
We recently unveiled an emerging technology package that
includes important priorities brought forward by members of
this subcommittee to advance U.S. leadership on critical
technologies.
Mr. Quaadman, can you please speak to how vital it is for
America to emerge from this pandemic in a strong global
position on critical technologies?
Mr. Quaadman. To be clear, the nation that is going to lead
in technology is going to lead the global economy. So, first
off, I would like to thank you and your colleagues for their
work in coming up with an emerging technology agenda. We think
that is very important.
And America is still the leader in innovation. We see that
with artificial intelligence, we see that with automated
vehicles, with UAS. However, we are seeing where the European
Union is the leader in developing regulations around artificial
intelligence; we see the U.K. is the leader in terms of
developing regulations around financial technology. And that is
where the technology is going to migrate to.
So we are actually in danger of developing technologies
that others might take over, and that is going to impact our
economy and the ability of the United States to lead the global
economy in the future.
Mrs. Rodgers. Thank you.
I yield back.
Ms. Schakowsky. I was trying to get back to the ranking
member.
You had 30 seconds extra, because there was some problem
with the clock. Would you like to take that time?
Mrs. Rodgers. Oh. Well, I appreciate that. I will just let
it go right now. Thank you very much, though.
Ms. Schakowsky. OK.
The gentle lady yields back.
And now let me recognize Chairman Pallone of the full
committee for 5 minutes to ask his questions.
TheChairman. Thank you, Madam Chairwoman Schakowsky.
I wanted to follow up on what you said, that, you know, in
New Jersey, we are still seeing--and, even in my office, I
still hear a lot of people calling, complaining about price
gouging.
And, you know, this is, of course, many months after the
pandemic began, but it still seems to be that there are more
cases of businesses illegally hiking prices on things like
cleaning supplies and personal protective equipment and now,
you know, a lot of targeting of work-at-home supplies and
summer products--we are here at the Jersey shore--like
inflatable pools, because, you know, a lot of Americans are
looking for products that can allow them to stay home and not
have to go out.
So I just wanted to ask Mr. Anderson again, I know you
talked about price gouging increasing, and you mentioned
online, but just to drill down a little bit about what kind of
increases you have seen in price gouging online and what
challenges you see in pursuing bad actors who sell online. I
just want to focus online, if you would.
Mr. Anderson. Sure. And many of the items that we are
seeing being sold online where consumers have reported price
gouging involve personal-protective-type equipment, hand
sanitizer, masks. Things of those items are being sold online,
and we have heard some reports about those.
And, again, you know, the challenges sometimes are--and it
just really depend on who the seller is. It might depend on
what platform they are using, whether they are using a more
obscure type of online platform as opposed to one that
consumers are familiar with. But there can be a lot of
challenges just locating the seller, sometimes, when they are
selling online.
But those are the types of items that are being sold online
and some of the reports that we are hearing about. And we have
some investigations currently pending regarding some of those
items, types of items, that have been sold online.
TheChairman. Well, Chairwoman Schakowsky and I, she
mentioned that we introduced this COVID-19 Price Gouging
Prevention Act. I just would like you to comment on that. You
know, is that the type of legislation on price gouging that
would make it easier for State attorney generals to go after
bad actors and protect consumers, again, particularly online?
Mr. Anderson. Sure. And let me give a very quick caveat
before I answer that question, which I should have given
earlier, is that, even though I am here in my role as consumer
protection director of the North Carolina Department of
Justice, some of the views here I might express today are my
own. But I say that in an effort to be able to provide some
helpful answers to your questions.
So I have looked at that bill. I will make a couple of just
general observations here without taking an official position
on it or anything.
One, I think States are typically looking and at least I am
typically looking at a bill like that in terms of, does it
preempt States from acting? And that bill does not. So I would
say generally that is a positive thing, in that it doesn't
preempt States.
Another observation is that it gives States the ability to
enforce the law, which, again, I think, from a State
perspective, or my perspective, is a positive thing, because it
gives us another tool in our toolbox to use. And I think having
the ability to enforce a Federal law like that, even if a State
has its own price-gouging law, there is potential benefit in
that it might fill some gaps that the State law doesn't cover.
And, certainly, for a State that doesn't have a price-
gouging law at all--and you might want to talk directly to some
of those States to get their input on it. But, just
intuitively, if a State doesn't have a price-gouging law at all
and there is a new Federal law enacted that they can enforce,
that would certainly seem to provide that State with a new tool
that they don't currently have, and I would think that would be
a benefit to a State like that.
So those are just some general observations.RPTR
PANGBURNEDTR ZAMORA[12:57 p.m.]
The Chairman. Well, thank you, Chairwoman. Thank you, Jan.
I yield back.
Ms. Schakowsky. The gentleman yields back.
And I now recognize Mr. Latta for his questions for 5
minutes.
Mr. Latta. Thank you, Madam Chair, for having today's
hearing. Very important. And I want to also thank our witnesses
for being with us today. Really appreciate your time and--
because, again, it is an issue that we are all concerned with.
But, again, thank you, again, for holding today's important
hearing in protecting consumers from the risks that have been
amplified by the COVID-19 pandemic. I would also like to thank
our witnesses for reparticipate.
For the past five months, our Nation has been devastated by
the outbreak of COVID-19. Because of our evolving understanding
of the virus, Americans have been inundated with conflicting
information on how best to protect themselves and their
families, both physically and financially. Unfortunately, the
uncertainty generated by this crisis is providing new
opportunities for bad actors to try to take advantage of our
concerned citizens. That is why we need to redouble our efforts
to combat these scammers.
The pandemic has also inspired businesses and individuals
to innovate in order to meet the new challenges we are
experiencing. For example, during a visit to the campus of
Bowling Green State University in May, I saw how unmanned
delivery services, robots, are already being used to deliver
food and beverages in our community.
This kind of remarkable innovation is why I introduce H.R.
6943, the Advancing Unmanned Delivery Services Act, which will
work to evaluate the many benefits contactless delivery has for
various segments and sectors of our country.
And, again, Madam Chair, before I begin my questions, I
also have an article I would like to introduce for the record
from gearbrain.com that highlights how autonomous robots will
be used to deliver food on campus in the fall, including on the
campus of Bowling Green State University.
Mr. Quaadman, if I can start my questions with you. In your
written testimony, you state that companies are working to
provide solutions to consumers that are targeted by scams.
Would you state a few of these solutions and how is the
business community working to keep up with the scammers?
Mr. Quaadman. Thank you for that question, Mr. Latta. First
off, companies are using different tools such as artificial
intelligence and machine learning to try and stay a step ahead
of scammers. Unfortunately, we have seen fraudulent--online
fraudulent activity increase by about ten percent since COVID-
19 has taken place.
There have also been--the business community has been
trying to work with other agencies to try and deal with these
issues as well. And we hope, as I said, in trying to develop
that counterfeit guide that I talked about, that we can also
inform consumers. Because an informed consumer is a protected
consumer. So we think some of the legislation that has also
been discussed here, but also I know has been introduced by Mr.
Carter and Ms. Rochester, are going to help provide consumers
with more information as well, which we think is helpful also.
Mr. Latta. OK. Thank you. You know, on the innovation
front, you stated that delivery industry is evolving to meet
consumer needs. And how have businesses that rely on delivery
services been impacted by COVID-19? And do current regulations
or lack thereof impede the expansion of unmanned autonomous
technologies?
Mr. Quaadman. So first off, Mr. Latta, I would like to
thank you for your leadership with unmanned delivery services
as well as with automated vehicles. Just give you a couple of
stories, one is we have seen an automated vehicle startup
called Beep in Jacksonville, Florida, where they have been
working with the Jacksonville Transportation Authority to
deliver medical goods to the Mayo Clinic there.
And we are seeing how UPS and CVS are using drones to
actually deliver prescription drugs to consumers. So that is, I
think, a glimpse into the future. We do think it is very
important, one, for Congress to pass legislation and to help
put pressure to ensure that we are going to have regulations
around automated vehicles.
We think it is very important for the National Highway
Traffic Safety Administration to accelerate its efforts here.
We also think with drones it is very important for the FAA to
finish up its rulemakings as well, because this will, again,
allow for the guardrails for how these important transportation
facilities are going to be able to operate and are going to
make actually the lives of consumers much easier.
Mr. Latta. Well, I appreciate that because, again, when you
are thinking about, especially with autonomous vehicles, you
know, it came out of our committee unanimously, passed the
House by a voice vote in the last Congress, but just what we
can be doing with autonomous vehicles right now. So many people
that don't want to be out right now or have somebody else pick
them up that, you know, they would have the ability to be in a
vehicle that they feel a lot more safe.
Madam Chair, I see my time has expired, and I thank you
very much for today's hearing. I yield back.
Ms. Schakowsky. Thank you.
And next, I recognize Congresswoman Castor for 5 minutes.
Ms. Castor. Well, thank you very much, Chair Schakowsky.
And thanks to our witnesses for being here today.
I have to tell you, I just got some very disturbing news
here in Florida related to COVID that was just announced, that
Florida just set an unfortunate record. We have had 120 deaths
in just a 24-hour period. That far exceeds any number we had
seen before. The positivity rate for testing is well over 18
percent.
And I will tell you, I was checking around with hospital
leaders here in the Tampa Bay area yesterday, and I am
completely dismayed to hear there are still significant
shortages in testing materials, the reagents, the personal
protective equipment, staffing. We have an extreme shortage of
Remdesivir.
Of a little bit of good news, the Coronavirus Task Force
last night, CDC and Dr. Birx, said that they are going to send
an emergency supply here to Florida on Friday. But I am
completely frustrated with the Trump administration, after we
have provided bipartisan direction and funds to get a handle on
supplies and PPE and to boost the supply chains. It is just not
there.
And I want to ask our witnesses, what is your sense about
the absence of the national testing strategy and a strategy on
supply chains for critical equipment? Has that helped fuel
these scam artists? My hospitals tell me they can't count on
the Feds right now. Can you believe that? And that they have to
go and still work other lines.
But maybe I will start with Mr. Anderson. What is your
sense of the lack of leadership there and the lack of a
national strategy and what that has done to fuel scam artists
and price gouging?
Mr. Anderson. Well, I will just say, generally, that scam
artists are usually looking to fill some sort of need that
consumers have or desperately want. And so in this time, you
know, obviously consumers would really love to have a cure for
COVID-19. So scam artists are going to move in and try to fill
that desire and need by promoting scam cures. And I think it is
the same with testing, that if there aren't tests out there or
if consumers are confused about tests. I mean, scammers will
try to make whatever they can out of any confusing situation,
any situation where consumers, you know, feel like their needs
aren't being met.
So I would just kind of make that general comment, and we
should never underestimate how clever and sophisticated some of
these scams are. The scam artists are looking for every
opportunity to get in and rip people off. And so that is part
of what is happening here. So that is just what I would say
generally.
Ms. Castor. Mr. Quaadman, what do you say?
Mr. Quaadman. Thank you for that question. I am sorry to
hear of the pain that is going on in Florida.
First off, we have worked with various different agencies,
as I have talked about, to ensure that those bad actors are
going to be prosecuted. We have also been working with Congress
and with others to ensure that medical supplies are--and that
companies that are delivering them and developing them are
going to be able to get them out there as quickly as possible.
And lastly, some of the activities I was talking about
before in terms of supercomputing and things that are going on,
those things are actually shaving off months, if not years, in
terms of research in trying to develop--
Ms. Castor. But where is the national strategy on this? It
is entirely frustrating. This has been bipartisan direction
from the Congress to this administration to get a handle on
this, and yet--and yet they still, our hospitals and health
systems are still scraping for supplies.
Ms. Greenberg, can you shed any light on this for us?
Ms. Greenberg. Sure, yes. I think there has been a void in
national leadership, national direction. And as a result,
States are forced to compete with one another and have raised
this issue over and over again.
We have to do much better. We have failed, I think, on a
national level dramatically to get a handle on this pandemic
and create a national strategy which has States working
together which delivers products which are high quality.
And we know that some States bought lots of equipment that
turned out to be defective, and spent millions of dollars. This
could never happen again. We need a much stronger national
program, bipartisan.
And we, you know, are so sad to hear about events in
Florida, and we are committed to doing much better when it
comes to testing, personal PPE equipment to provide to your
hospitals. We despair as well.
Ms. Castor. Thank you very much.
Ms. Schakowsky. The gentlewoman yields back.
And now I recognize Congressman Guthrie for his 5 minutes
of questions.
Mr. Guthrie. Thanks, Madam Chair. And before I begin my
questions, I would like to offer an article for the record
highlighting how blockchain can be used in our fight against
the coronavirus. I think it has been distributed prior, so I
would like to offer that for the record.
Ms. Schakowsky. That will be added to the record at the end
of the hearing.
Mr. Guthrie. Thank you. Thank you.
I believe that emerging technology has the potential to be
a useful tool in putting a stop to the bad actors that take
advantage of COVID-19 pandemic. That is why I recently
introduced two bills, the Advancing Blockchain Act, working
with my good friend Doris Matsui, and the Countering Online
Harms Act.
The Advancing Blockchain Act would direct the Department of
Commerce and FTC to study potential applications of blockchain
technology. The Countering Online Harms Act would direct the
Federal Trade Commission to study how artificial intelligence
may be used to identify and remove deceptive and fraudulent
content that is intended to scam or do harm.
So I would like to get to questions now. For Mr. Quaadman,
you talk about emerging technologies being used to help combat
the COVID-19 crisis on multiple fronts, including in therapy
development and tracking the spread of the virus. My question
is, how important would you say AI, blockchain, and other
emerging technologies have been in our fight against COVID-19,
and do you see any obstacles in further deploying these
technologies?
Mr. Quaadman. These emerging technologies have been
critical in the fight against COVID. So as I mentioned, you are
seeing how IBM, Google, Microsoft, and others are using open
databases that, let's say, relics opened up where they are
actually able to look now using artificial intelligence through
tens of thousands of articles and research studies to start to
pinpoint possible treatments and vaccines.
So as an example, BenevolentAI, which is an AI firm in the
U.K., used AI, and they were able to discover that a rheumatoid
arthritis drug from Eli Lilly is a potential candidate. That is
now going through clinical treatments.
So we think it is important--and this is just from, you
know, taking it from a larger point of view. We do think it is
very important for NIST to come up with standards for AI. We
also think it is critical for OMB to finish up its guidance
regarding AI, because that will allow AI to be deployed more
fully, but it will also set the United States up to have the
certainty needed to be the continued leader in this space.
Mr. Guthrie. OK. Thank you.
And I would like to go to Mr. Anderson for a question.
During this public health crisis, the Federal Trade Commission
has continued its work protecting consumers, providing guidance
to businesses, and protecting competition in the marketplace
throughout the pandemic, in addition to the work that States
are doing to protect consumers from scams.
Mr. Anderson, in addition to protecting Americans' privacy,
are there any recommendations you believe that we need to
consider as we prepare for a possible second wave of COVID-19?
Mr. Anderson. Well, I do think we need to give serious
thought to bringing all tools that we can bear to protect
consumers here. I mean, I was interested in some of your
comments you made earlier about using technology in whatever
way possible to protect consumers, and there may be a place for
looking at algorithms that detect patterns of fraud. So I think
those types of things, using technology as a means of
protection, are worth exploring.
Just to give an example in the robocall area, which I know
is an area that you all probably hear about all the time. It is
a huge source of complaints for us. The world changed there a
while back where all the calls started coming from overseas.
Scammers were using technology to spoof the calls. And part of
the solution going forward, I think, has to be a technological
solution, at least in part, which is why our office was not
satisfied with some of the progress being made on that front.
We spearheaded an effort with other States to work with
telecom companies to come up with better tools to block and
identify robocalls, give consumers some tools. So I think this
idea of looking at technology is a good one. I think looking at
ways in which information and education best reaches the public
and is most easily understood by the public to help them
prevent some scams--I am just sort of brainstorming here in
response to your question--is a good thing to look at. So I
think looking at all sorts of possibilities and taking a very
broad-minded approach to it is a good way to go.
Mr. Guthrie. OK. OK. Thank you very much. I only have 15
seconds left, so it is hard to ask another question. So I will
yield back, and thank you for your answers today. I appreciate
it. And thank you for being here.
Ms. Schakowsky. And now--the gentleman yields back.
And now, Representative and my friend from Illinois,
Congresswoman Robin Kelly.
Ms. Kelly. Thank you, Madam Chair, and thank you for
putting this hearing together.
Until a vaccine or effective treatment is available for
COVID-19, successful management of the pandemic will rely on
tried and true public health measures like contact tracing to
keep our communities safe. Effective contact tracing will allow
health officials to not only document the spread of the virus,
but also alert those who may have been exposed to the virus.
Unfortunately, scammers pretending to be contact tracers
from public health departments have been targeting seniors and
those less tech savvy, duping them into turning over sensitive,
personal, and financial information or tricking them into
downloading a malicious software.
Mr. Anderson, what effect do these scams have on the public
health efforts to do legitimate contact tracing to combat
COVID-19, and how can consumers tell if the tech call or email
is even legitimate? And who can the consumers call if they feel
like they have been duped? Who should they contact?
Mr. Anderson. So I think that is a great and timely
question, because we are just starting to see a number of
different contact tracing type scams emerge. And one example,
which I think you alluded to, is a situation where a consumer
will receive a call from a--it is a scammer, but they are
saying that the consumer has come in contact with someone who
had COVID-19, and to begin the start of the contact tracing
process the consumer needs to immediately provide some sort of
payment to the caller, and that is just a scam. And a big red
flag there is that--my understanding, is that no one from a
legitimate health department or anyone operating a legitimate
contact tracing operation will ask for payment like that and
directly call the consumer and ask for a payment.
And that is a standard type of scam that we see in many
different forms where a sense of urgency is created in response
to something of the moment and there is a demand for an
immediate payment, and especially if they are asking for a
payment via a wire transfer or a gift card, all those things
are big red flags. So, you know, we have been trying to warn
consumers about those types of scams.
Another scam we have seen is a job-related contact tracing
scam where there are jobs out there for people to be employed
and help with the contact tracing process, but we have,
unfortunately, seen some phony job postings that we have
checked with our public health authorities that aren't
legitimate and we are trying to stop those, put an end to
those, and we warn the public about those as well. So that is a
very timely topic and worth warning people about.
Ms. Kelly. And what more do you think the FTC could be
doing to assist in your efforts in North Carolina in helping
consumers? And if you could be brief, because I wanted to ask
Ms. Greenberg if she had anything else to add. So, Mr.
Anderson.
Mr. Anderson. Sure. And we share information, work with the
FTC. We welcome sharing information with them, welcome them as
a partner. I always think, just in my personal view, we could
bring more joint enforcement actions together with the Federal
Trade Commission in addition to just sharing information.
So I know you wanted me to be brief, so I will stop there,
but I am happy to talk further with you offline about that if
you want.
Ms. Kelly. Sounds good.
Ms. Greenberg, do you have anything else to add that the
Federal Government can be doing to help stop these scams and
help consumers?
Ms. Greenberg. Yes. Well, we need to ramp up this whole
area of contact tracing. And consumers are already having--or
health officials are already having trouble reaching consumers
about contact tracing. This is an unprecedented situation. You
don't usually have people calling you and say we need to get
your information, we need to track this down. And, of course,
the scammers go in, they fill these voids always in time of
national crisis. They are going to come in in tornadoes and
floods and this pandemic has just unleashed a torrent of scams.
So what Mr. Anderson said about money upfront, that is a
red flag always. There are also just phishing scams where they
are just trying to get your information. And so what I would
say is, get the caller's phone number, address, who they are
attached to, what their email address is. We always advise
consumers, trust but verify, and this is an unprecedented
situation with contact tracing. But there are ways to verify
this information.
So especially for seniors, if they are home alone, they
need to have another adult who is taking care of them, a family
member to verify all this information so they are not giving
their Social Security away, their bank account information
away. That is really the threat that we are seeing out there.
Ms. Kelly. Thank you so much. Time is up.
I yield back.
Ms. Schakowsky. I just want to remind people, if anybody is
there that is not actually on the screen, you will not be
called on to speak, and, of course, to unmute yourselves.
Next is Representative Gianforte.
Mr. Gianforte. Thank you, Chair Schakowsky and Republican
leader McMorris Rogers, for the opportunity to speak on the
important issues preventing COVID scams.
COVID-19 has put our communities into uncertain times. At
the height of the pandemic, 100,000 Montanans were out of work.
Unfortunately, where normal human beings see hardship and react
with compassion, scammers seek to further destroy the
livelihoods of hardworking Montanans. One of the scammers'
favorite tools is still the robocall. Now it is easier than
ever for scammers to impersonate medical professionals or
government representatives from Medicare or Medicaid to push
misleading information or to swindle vulnerable Montanans out
of their savings. While the committee has worked hard to
address the scourge of robocalls, there is still work to be
done.
In April, I sent a letter to FCC Chairman, Ajit Pai, and
Attorney General Barr, expressing the need to begin
implementation of the TRACED Act and aggressively pursue
illegal robocallers. Not 2 days later, the FCC took new
enforcement measures against telecom companies that facilitate
robocalls from overseas.
It is important that this committee continue to work in a
bipartisan manner to provide law enforcement the tools they
need to crack down on scammers and protect hardworking
Montanans.
In this pandemic, however, it is also important that we
provide businesses with the tools they need to get our economy
going and get Montanans back to work. There is an opportunity
to foster growth in emerging technologies to strengthen our
economy. I introduced the Advancing Gig Economy Act to conduct
a study on the impact of the gig economy on U.S. businesses
conducting interstate commerce. The study will provide States
with greater clarity around the gig economy and better inform
future legislation to grow the gig economy.
It is important that America remains a global leader in
fostering and growing emerging technology. As a tech,
entrepreneur, and executive, I know how important American
leadership is in emerging tech. It is critical for the Federal
Government to promote innovation and growth by securing supply
chains, safeguarding consumers, and using a light-touch
regulatory environment.
Now, Mr. Quaadman, in your testimony, you identified how
delivery services in the gig economy has stepped up to provide
important assistance to local restaurants, health workers, and
food banks. Moving forward, what role do you see the gig
economy playing as our Nation recovers from the economic shock
of COVID-19?
Mr. Quaadman. Thank you very much for that question,
Congressman. And you are right, I mean, the gig economy has
been an important lifeline not only for consumers, but for some
very hard-hit industries such as the restaurant industry, as we
have discussed.
We recently had an event at the Chamber where the CEO of
Emphasis actually was talking about this issue. And as he was
discussing it, he said that 5 percent of the current workforce
could be characterized as being gig workers. This is probably
going to go up to somewhere to 20 to 25 percent over the next,
you know, 10 years or so. That means we are--those workers are
going to have to go through career long learning because they
are going to be doing many different jobs, sometimes
simultaneously, and it is going to create some challenges.
Now, there is some advantages that gig workers will have
too, right, in terms of being able to control their schedules
and all, but, you know, we are seeing a work business
relationship that is going to be different than what it has
been in the past, and it is going to create some policies that
are going to have to be addressed such as with their education.
Mr. Gianforte. OK. Thank you, Mr. Quaadman. Just to get
that correct, you said the percentage of gig workers will go
from 5 percent to 25 percent, of what universe is that?
Mr. Quaadman. Of the workforce.
Mr. Gianforte. Of the entire workforce?
Mr. Quaadman. Yes.
Mr. Gianforte. So you are predicting a 5X increase in the
number of workers that are actually in the gig economy?
Mr. Quaadman. Yes.
Mr. Gianforte. OK. Thank you very much for those insights.
And, Madam Chair, before I yield back, I would like to
offer this article from the U.S. Chamber of Commerce on how gig
economy companies are helping Americans during this pandemic
for the record.
Ms. Schakowsky. It will be entered into the record at the
end of the hearing.
Mr. Gianforte. OK. I would like to thank you, Madam Chair,
and the Republican leader for this important hearing. And I
yield back the remainder of my time.
Ms. Schakowsky. The gentleman yields back.
And now, I recognize Representative Ben Ray Lujan for 5
minutes.
Mr. Lujan. Thank you, Madam Chair and ranking members, for
organizing this important hearing on how we can protect our
constituents from COVID-19 scams.
This is a difficult moment for our country. We have lost
more than 130,000 Americans due to COVID-19. We are now at 3
million cases. The national unemployment rate is at 11.1
percent.
Ms. Greenberg, I was struck by some of the numbers you
shared in your testimony. Since the start of 2020, the Federal
Trade Commission reports it has received more than 120,000
consumer complaints related to COVID-19, and we know that these
numbers dramatically understate the problem, as most people
across the country don't know how to report or if to report to
the FTC.
Google is tracking 18 million COVID-19 malware and phishing
emails every day, and an estimated 30 billion of stimulus funds
may end up in criminal hands because of fraud. These numbers
represent real suffering and loss. That is why I plan to
introduce the Stopping COVID Scams Act of 2020, which would
allow the FTC to levy civil penalties on COVID-19 scammers.
Ms. Greenberg, do you believe that consumers would benefit
if Congress gave the FTC, the Federal Trade Commission,
stronger enforcement tools to hold COVID-19 scammers
accountable?
Ms. Greenberg. Yes, Congressman. We do believe that the FTC
needs stronger civil enforcement power. We would support
legislation. The stopping COVID scams bill that you are talking
about, I think, would be a very effective tool. As Mr. Anderson
has said, we need to expand the tools that law enforcement has
during this terrible crisis.
So a stronger FTC with civil penalty authority would
provide stronger consumer protections, even if we weren't
currently facing this tsunami of COVID-19 scams. And at the
very least, we think the FTC should have the tools it needs to
go after scammers who are taking advantage of the moment to
defraud millions of consumers.
So we would be proud to support your bill once it gets
introduced, Congressman Lujan. And we thank you for your
leadership in helping to protect consumers.
Mr. Lujan. And, Mr. Anderson, the legislation would also
allow attorney generals to impose civil penalties on scammers.
As you mentioned in your testimony, State attorneys general
often work with the Federal Trade Commission. Can you briefly
describe how State attorney general partner with the FTC to
protect consumers?
Mr. Anderson. Sure. It happens in several different ways.
One is the sharing of information I alluded to earlier where we
have calls or other mechanisms for sharing information with
each other. Many States, such as North Carolina, are plugged in
to the FTC's consumer sentinel database and we are able to see
the complaints that the FTC receives in North Carolina and
elsewhere. And we also put our own North Carolina State
complaints in that database. I believe we were the first State
to do that, because we believe mutual sharing of information
like that is valuable, both for our office and for Federal
authorities like the FTC.
So their information sharing mechanisms like that, which I
think are very helpful. And we have brought some joint
enforcement cases with the FTC, which I think are--and U.S. DOJ
and other Federal authorities, and I think it is useful for
Federal authorities to partner with the States, as I alluded to
earlier.
I would like to see more of that in some ways. I think that
a lot of times there are people high up in Federal agencies
that want to see the agency partner with States, but it doesn't
always work its way down to the staff attorneys at some of
those agencies building the cases. So I would really like to
see us bring some more joint enforcement efforts together. And
we have done that and been successful, and I think they are
good things for us to do. I think we just need to do more of
it.
Mr. Lujan. I appreciate that very much.
Since the beginning of this crisis, e-commerce spending has
significantly increased. Earlier this week, I was proud to have
FTC Commissioner Chopra join me with my weekly Congress from My
Casa Facebook live townhall to discuss how New Mexicans can
protect themselves during this crisis.
He shared with me that he had significant concerns that
online platforms are not doing enough to stop fake counterfeit
goods, including PPE and disinfecting products from being sold
on their platforms. In addition, he is worried that these
platforms allow goods and products to falsely claim that they
are made in the USA.
Ms. Greenberg, yes or no, are honest country of origin
disclosures important to consumer shopping online?
Ms. Greenberg. Yes. We are strong supporters of consumers
having information about where the product is made, and there
is a lot of fraud around made in American claims. Some of our--
--
Mr. Lujan. Thank you, Ms. Greenberg.
Ms. Greenberg. Yes.
Mr. Lujan. And, Mr. Anderson, same question, yes or no?
Mr. Anderson. Briefly, it is a concern, I think, and it is
important to look at misrepresentations being made along those
lines about where products are made, yes.
Mr. Lujan. I appreciate that.
Madam Chair, we have some other questions we will be
submitting for the record, but we thank you, all of our
colleagues, for this important hearing. And I yield back.
Ms. Schakowsky. The gentleman yields back.
And now, I recognize Mr. Carter for 5 minutes.
Mr. Carter. Thank you, Madam Chair. And thank all the
witnesses for being here. This is a very important subject,
particularly for our senior citizens. We all need to work
diligently on this.
Mr. Quaadman, I want to thank you for--also for testifying
and for your representation of the Chamber. It is important
that we utilize the private sector. I mean, we can--obviously,
we need to pressure and to make sure that the agencies are
doing their part, but we need the assistance of the private
sector in this as well. And I wanted to ask you, have any of
your member companies, how are they utilizing their technology
to protect especially older citizens, older American citizens?
Have you got any examples of how they have used technology this
way?
Mr. Quaadman. Yes. Thank you, Mr. Carter. So companies are
using machine learning AI algorithms to be able to understand
transaction histories and the like and to be able to try and
spot fraud early on. You know, and this is true not only for
older Americans, but for all customers.
So they are trying to deploy all those tools that were
actually fairly successful before COVID in bringing down some
of the incidents in terms of identity theft and the like. And
also, additionally, as I mentioned, we have, as I mentioned,
TransUnion offering free tools, and there are others that doing
this as well, to try and give tools to consumers to protect
themselves.
And finally, I would just say, we have been working with
other agencies, such as, let's say, with the Consumer Financial
Protection Bureau, to ensure that firms can stay in close touch
with their consumers to be able to spot fraud, and if they do
spot something, to address it with the consumer and make sure
that they can resolve an issue quickly.
Mr. Carter. Have you had any specific incidents that you
can remember that this worked?
Mr. Quaadman. Yes. So we have actually been working, as I
mentioned, pretty closely with the Department of Homeland
Security regarding counterfeit goods. Believe it or not, there
are such things as counterfeit toilet paper and things like
that. So we have actually been fairly successful trying to get
those products out of the marketplace for many of the reasons
that we have all been talking about today as well. So
enforcement is also very important here.
Mr. Carter. OK. I wanted to tell all the panelists that on
the onset of this pandemic, I introduced bipartisan legislation
called Combating Pandemic Scams Act, and this legislation was
actually to help all Americans, but particularly older
Americans, to help them with the government response. And it
really called for all the agencies, multiple agencies, to come
together with the FTC as the lead so that we could get the
information. We had examples of scams so they could submit
those examples and have a website where they could actually go
and look at examples of where people had tried to pull off
scams like this.
And I wanted to ask you, Mr. Quaadman, have any of your--
you mentioned that some of your companies have been working
with some of the agencies. Any of them working with FTC as
well?
Mr. Quaadman. Yes. I believe those discussions are ongoing.
And, in fact, we are reviewing your legislation. We are also
reviewing Ms. Rochester's legislation, because providing
information to consumers is important for them to protect
themselves. And I will just say as well, some of the examples
that Ms. Greenberg and Mr. Anderson have raised as to what
consumers should be looking for are very important. And public
education is a very key component for consumer protection here.
Mr. Carter. Good.
Mr. Anderson, I would imagine that in North Carolina, this
is a particular problem, and I appreciate all of your work that
you are doing in this. And, again, I want to mention my bill,
the Combating Pandemic Scams Act, that requires the FTC and the
other partners to make publicly available information on how to
spot and report scams, along with making sure that it is
accessible and user friendly.
I wanted to ask you, would this help you in your position
and to help the citizens in North Carolina?
Mr. Anderson. I do think, generally, that looking, taking a
very serious look at what can be done to help seniors is very
important. As you point out, they are particular targets of
scams. And I think looking at the best way to get information
out to that population and try to help them avoid scams is a
good thing to really be giving serious thought to. And I think
having experts and people at agencies that are involved in
consumer protection and sharing information, really looking at
the best way to help give seniors the tools to not fall for
these scams is, in general, a good thing to be looking at.
Mr. Carter. Good. Well, again, thank all of you. This is
very important work.
And thank you, Madam Chair. And I yield back.
Ms. Schakowsky. The gentleman yields back.
And now, I recognize the vice chair of the committee,
Representative Tony Cardenas.
Mr. Cardenas. Thank you, Madam Chairwoman. Can you hear me?
Ms. Schakowsky. Yes.
Mr. Cardenas. OK. Thank you so much. Appreciate it to the
ranking member of the full committee and the subcommittee and
all the support that we have to come together like this before
the public and to dialogue about how important it is that their
hard-earned dollars are protected and their livelihoods,
especially when it comes to seniors and the most vulnerable.
The Federal Trade Commission is the Nation's premier agency
for economywide civil endorsement of laws that protect the
American people. From July 2018 to today, the FTC has helped
return a little more than $10 billion back to families'
pockets. It is critical, therefore, that the FTC have the power
to defend consumer interests, including the power to ensure
that ripped-off consumers can get their money back.
We gave the FTC the authority in Section 13(b) of the FTC
Act, as courts have recognized for the past three decades, but,
unfortunately, lately, that authority has been undercut by some
judicial assaults.
Last year, a couple of Federal appeals court decisions
limited the FTC's ability to get money back for our consumers,
for American consumers, who have been harmed by scams and other
frauds.
Ms. Greenberg, do you agree that Congress should do what is
necessary to ensure the FTC can continue to return money to
victims?
Ms. Greenberg. Yes. We think it is a very important
function of the Federal Trade Commission to get money back for
victims who have been defrauded by companies who have stolen
their hard-earned dollars. And yes, we do support that.
Mr. Cardenas. OK. Thank you. Do you have a rough estimate
of how much money in dollar amounts has been lost or taken away
from consumers since the start of this pandemic?
Ms. Greenberg. I think the estimate is in the $180 million
that has been lost through scams from the pandemic--from the
start of the pandemic.
Mr. Cardenas. OK. And that is from the start of the
pandemic, but at the same time, is that an uptick or is that
just a par for the course?
Ms. Greenberg. It is certainly an uptick, according both to
State law enforcement and Federal law enforcement agencies.
Mr. Cardenas. OK. What are your thoughts on the
consequences of this authority being fully eliminated?
Ms. Greenberg. Being fully eliminated?
Mr. Cardenas. Yes.
Ms. Greenberg. That would be devastating, I think, to the
effort to protect consumers and to restore funds that were--
ill-gotten gains entitled to get that back and we need law
enforcement agencies to have the power to get that money back
to consumers.
Mr. Cardenas. So if this were fully eliminated, that means
that crime would very likely pay with these bad actors,
correct?
Ms. Greenberg. Most certainly, if bad actors know that they
will not be held accountable for taking consumers' money, they
will double down on those efforts.
Mr. Cardenas. Mr. Anderson, when it comes to your work, do
you value--or are you able to do your work over at the attorney
general's office better because you have partners like the FTC
or could you do it on your own?
Mr. Anderson. We certainly like having partners like the
FTC and other partners. I mean, I think there is so much work
to be done in the consumer protection area that we certainly
devote all of the time and resources that we have to bear to
protect North Carolina consumers, but there is a lot going on
out there, and I think the more civil enforcement cops on the
beat, if you will, that are protecting consumers, the better.
So it really does take, I think, an effort on all fronts to try
to bring maximum protection for consumers.
Mr. Cardenas. Thank you. I have taken the opportunity to
personally discuss 13(b) with the chair of the FTC, and he is
definitely in favor of making sure that we, Congress, enhances
that clarity of their authority; that we believe, Congress
believes, I think overall, that that authority has been given,
unfortunately, had some, in my personal opinion, some rogue
judges that have grossly misinterpreted the intent and the
13(b) set by Congress.
So I am going to give the last 30 seconds I have a softball
question to the Republican witness, Mr. Quaadman. Mr. Quaadman,
do you agree that about 99 percent of American businesses are
good actors?
Mr. Quaadman. Yes, sir.
Mr. Cardenas. OK. Thank you for your brief answer, because
I do agree, as a former business owner myself, when you are out
there in the field trying to do business, it really breaks your
heart to see bad actors out there, and they make everybody look
bad and they hurt the public, they hurt industries, and they
just hurt everybody.
And one last thing I would like to say is I am very proud
of the American businesses and the kind of overall 99.9 percent
of following the rules and following the laws and respecting
business. But, unfortunately, we do need enforcement for those
few bad actors in an economy and the trillions of dollars that
really, really hurt too many people, to the tune of millions
and millions of families, and devastate them in some cases. So
thank you so much.
I apologize for going over my time. Madam Chairwoman, I
yield back.
Ms. Schakowsky. The gentleman yields back.
And now I recognize Mr. Burgess for 5 minutes.
Mr. Burgess. Did I unmute?
Ms. Schakowsky. I can hear you now.
Mr. Burgess. All right. Good deal.
Mr. Quaadman--well, thanks to all of our witnesses for
being here today.
Mr. Quaadman, I particularly was enthusiastic about in your
testimony where you talked about the collaboration of the
private sector with the government and the creation of that
national data set and the incorporation of the artificial
intelligence to be able to sift through large volumes of
information. I will tell you--I am sorry?
Ms. Schakowsky. I apologize. I was not muted. Sorry.
Mr. Burgess. Are we good?
Mr. Cardenas. It is a little blurry, but we can hear you.
Mr. Burgess. Everything is sharp here. I don't know what is
the matter on your end, Tony.
Mr. Cardenas. But we can hear you. We can see you and hear
you; it is a little bit blurry.
Mr. Burgess. All right.
Again, Mr. Quaadman, your testimony about how the private
sector has stepped up in this and the creation of that open
research data set, I think, just can't emphasize how important
that is in allowing our researchers, both public and private,
to sift through just vast amounts of information, and now to be
able to actually incorporate some artificial intelligence and
machine learning, to be able to really hone in on some things.
Are you able to share with us any areas where that has
produced a significant deliverable?
Mr. Quaadman. Well, I raised one example before, but just
to reemphasize it. Through the use of AI and that open data
set, BenevolentAI was able to go through thousands and tens of
thousands of studies and the like and were able to identify a
rheumatoid arthritis drug that Eli Lilly had developed years
ago and that that was a possible drug treatment for COVID-19.
Similarly, there have been some other--there have been some
other treatments as well that have been targeted in a very
similar way and are going through the clinical process as well.
So as I was mentioning, this has actually shaved off
months, if not years, in development and treatments of
vaccines, and that is something that has never happened before
and it is only because of where we are technologically today.
Mr. Burgess. And, you know, I agree. American innovation is
what is going to get us out of this crisis, and to the extent
that you facilitated innovation with that open data set, that
is incredibly important. And I actually have wondered, the
amount of data that is now collected on the vast numbers of
patients who have been treated, yes, it does seem like we
should be able to come to some conclusions, recognizing
randomized clinical trials take time, but observational studies
are useful. And some of those look-back studies, I think, can
help us identify therapies or things we shouldn't be doing,
things that therapeutically are not useful. And this is just
such a significant part of what they are contributing.
I did want to highlight that, and it is different. I was
here when we had Ebola, I was here when we had Zika. I was here
when we had swine flu. I don't recall the collaboration between
the public and private sectors like we are seeing right now,
warp speed. We are going to have a hearing on some of the
vaccine developers later on in the month; that is a good thing.
But this is, in my experience, this is unprecedented. And,
again, it is going to produce a deliverable far quicker than
anyone thought possible.
Mr. Quaadman. Agreed. Agreed. And this is something that,
you know, we expect to continue, and we hope to see things come
to market hopefully relatively soon.
Mr. Burgess. Yes. It can't be soon enough.
Now, just another issue--I can't see the clock from where I
sit, so, Chairwoman, you will just have to interrupt me if I go
over--but I did want to ask you about the liability issue that
you brought up, Mr. Quaadman. My Senator over on the Senate
side, Senator Cornyn, of course, is working on pretty broad
legislation dealing with some of the liability questions that
you brought up.
You point out in your testimony timely, temporary, and
targeted. So we have had some experience with other national
crises where this type of timely, targeted, and temporary
liability protection has been useful. Is that something that
you have explored at the U.S. Chamber?
Mr. Quaadman. Yes. I mean, this is something that has
happened before and it has been successful before. One of the
points I want to mention as well is just how broad-based the
coalition is here that is looking for liability relief. It is
the business community, it is not-for-profits, it is education,
it is government agencies that are looking for this. And we
have actually seen some States implement this, as well as
Congress, in other areas.
So we think this is very important where businesses are
looking for uniformity across the line in order to be able to
comply, particularly if they are operating over State lines,
and that is why congressional action is so important here.
Mr. Burgess. They are looking forward for certainty as
well.
Mr. Quaadman. Yes.
Mr. Burgess. When we come to the question of opening the
schools up in the fall and the CDC guidelines, I agree with you
that if someone is following those guidelines, there should be
a measure of liability protection. Some of the difficulty
occurs in that sometimes the guidelines change, and that change
may happen relatively suddenly, which is another reason that
that liability protection is just so critical to being able to
provide those services.
Mr. Quaadman. Agree.
Mr. Burgess. In whatever time I have left, Mr. Anderson, I
so appreciated your testimony on the payment mechanisms, and
certainly, that should be a red flag to some, that certain
types of mechanisms are not--they are so far outside the
mainstream, so far outside the norm that red flags----
Ms. Schakowsky. We are way----
Mr. Burgess. So I just so appreciate you bringing that to
our attention today. I think that is an important part.
And I will yield back.
Ms. Schakowsky. The gentleman yields back.
And now, I recognize Congressman Bobby Rush, my colleague
from Illinois.
You there, Bob?
Mr. Rush. All right. Thank you, Madam Chair.
Ms. Schakowsky. There you go.
Mr. Rush. All right.
Ms. Greenberg, in your testimony, you discuss how
consumers' vulnerability to unfair and deceptive practices has
been exacerbated by COVID-19. One of the potential
vulnerabilities resides in the FTC's Funeral Rule. That was
updated in 1994. The Funeral Rule does not account for the way
our economy focuses today, especially knowing the COVID
pandemic. That is why last month I, along with nine of my
colleagues on the committee, sent a letter to the FTC asking
them, among other things, to require funeral homes to post
their prices online and to provide them in a standardized
format.
In your opinion, is this something you believe the FTC
should require, and if so why? And if not, why not?
Ms. Greenberg. Thank you for the question, Congressman
Rush. Yes, this has been a long-standing consumer position.
Certainly, our organizations and sister organizations, we do
believe that there should be a requirement that funeral homes
post their prices online. We know that that information would
certainly benefit consumers. The funeral industry has, over the
years, had a reputation for inflating prices, for changing the
rules with families who are encountering and are in the middle
of very vulnerable situations where they have lost a loved one.
So at a time when consumers should be focused on grieving,
they should not have to deal with getting the runaround from
unscrupulous funeral directors. So clear information up front
we think will help families. We couldn't agree more with the
position you took in the letter. Let's post that information.
Give it to consumers so they can compare prices.
Mr. Rush. Ms. Greenberg, COVID-19 has revealed for all
Americans to see the deep fault lines that exist in our society
as it relates to healthcare, law enforcement, unemployment, and
various other issues. Are there any similar fault lines that
exist in the consumer protection area of our society?
Ms. Greenberg. Well, I think you are absolutely right that
COVID has revealed the disparities. Communities of color are
paying a higher price than any other, particularly the African
American community, during this COVID crisis. So one of the
things that we noted is that The New York Times was trying to
publish some of this information about disparities and they
actually had to sue the CDC to obtain data on the disparities
affecting communities of color.
So it is really a--revealed this chasm of treatment. We
have got issues of access to healthcare. We have got States
that--13 States that have failed to expand Medicaid. We have
Cobra that is in the--Cobra coverage that is in the HEROES Act
that the Senate has not taken up and needs to, in our opinion.
So we think it is really an insult to communities of color
who have faced the brunt of losses from this pandemic.
Mr. Rush. Now, on the landscape of consumer protection
organization, would you be supportive of a consumer protection
organization and that really speaks directly and speaks
directly for minorities and communities of color?
Ms. Greenberg. Yes, we certainly would. And we think that
there needs to be much more focus on the disparities that this
pandemic has created. So the answer is, yes, we will work with
you on that.
Mr. Rush. All right.
Mr. Anderson, thank you for highlighting the plight of our
Nation's seniors. In my district and across the country, too
many seniors have been subject to unscrupulous assisted living
facilities trying to steal residents' stimulus checks under the
guise of payments the facility is entitled to. That is why I
was glad to see the FTC highlight this problem in May and why I
sent a letter to CMS to see what they were doing to stop this
practice. Unfortunately, CMS has limited jurisdiction in these
situations.
My question is, other than increasing awareness, what can
be done to prevent this malfeasance?
Mr. Anderson. Well, certainly, if consumers and seniors
have that practice happen to them, I would encourage them to
report it to, you know--in North Carolina, they can report it
to our office, we will get it in the right hands. And if we
hear of something inappropriate happening, we will follow up on
it and take appropriate action on it or we will refer it to the
right entity. It might be a Medicaid fraud-type entity. But it
is something. If it happens to consumers, they should report it
to the authorities for possible enforcement action, you know.
We certainly don't want that type of activity to be occurring.
Mr. Rush. Thank you.
I yield back, Madam Chair.
Ms. Schakowsky. OK. The gentleman yields back.
And I am going with, next, with everyone that is on the
committee before we get to people who have waived on. And I
call--I now ask my friend, Doris Matsui, to do her 5 minutes.
Ms. Matsui. Thank you very much, Madam Chair, for this
very, very important hearing. It is really something that is
really necessary today. And I thank the witnesses for being
here with us also.
I want to follow up more on older Americans. According to
AARP, before the coronavirus, one in four older adults were
socially isolated. Now we know that number is much higher today
because they are doing their part to limit their risk to the
exposure to the virus by staying at home. At the same time,
they are spending more time online, at an increased risk of
being targeted by COVID-19 scam activity. Now, not all older
adults are emailing or texting, but I suspect most are
receiving robocalls from COVID fraudsters.
Ms. Greenberg and Mr. Anderson, what is the best way to
reach older adults offline about the scams we are discussing
here today?
Ms. Greenberg. Yes. Older adults are besieged by robocalls
and even calls on their mobile or their landlines, and it has
been exacerbated terribly by the pandemic. Education for family
members, ensuring that your family member, your older family
member is not by themselves or doesn't make any financial
decisions without checking with another family member.
Also, we talked about, I think Mr. Anderson and others
asked about, how about letting us know what the scams are. A
lot of people don't understand how a scam works. We have got
grandparent scams, we have got romance scams, and the scammers
are very clever. So we need to expose people to how a scam
looks, what the anatomy is of a scam. And there is lots of
education to do, but yes.
Ms. Matsui. OK.
What role can nonprofits and NGOs play in spreading
information about common COVID frauds and scams?
Ms. Greenberg. We have a fraud.org site. We have a fraud
newsletter that goes out very broadly. We work with State
attorneys general. We work with the FTC and a lot of companies.
The kinds of companies Mr. Quaadman mentioned can play a very
important role in spreading this information, what are the red
flags of scams.
Ms. Matsui. All right. Thank you very much.
During this crisis, it is imperative that everyone feels
comfortable reaching out for help when they need it. For this
to happen, we need our government at all levels to accommodate
as many languages as possible.
In California, we have a significant Spanish-speaking
population, and I believe it is important that they have
options available to them to discuss testing, healthcare, and
product-safety complaints in Spanish.
Mr. Anderson, can you describe your efforts in North
Carolina to ensure Spanish speakers have options to lodge
complaints? And are there other steps you have taken to expand
options for consumers when filing complaints?
Mr. Anderson. Yes, we agree that that is important, and we
try to make it as easy as possible for Spanish-speaking
populations to lodge complaints with us.
We have employees on staff that speak Spanish so that, when
calls come in, they can speak in Spanish to those consumers
over the phone. We have our consumer complaint form in Spanish
on our website. When we put out alerts and other consumer
information, we often try to put that information out in
Spanish. We reach out to some of the news media publications
that Spanish-speaking populations subscribe to and pay
attention to to try to help the get word out.
You know, I think there are lots of things that can be done
there, and I agree it is important. In the consumer-protection
world, you want everyone possible to know about these things,
and sometimes that means communicating in the language that
people are going to understand.
Ms. Matsui. And I also believe that it is important to
reach out to other groups that work with the Spanish-speaking
population, whether it be churches or other groups. I know
there are many available, and I think that they would be very,
very willing to help out also.
Now, you know, while the FTC, DOJ, and FTR have roles to
play in cracking down on fraudulent or ineffective products,
markets, and consumers, we also need enforcement efforts in web
platforms and social media companies.
Ms. Greenberg, do you believe these companies are devoting
sufficient resources to adequately protect consumers from
seeing fraudulent acts?
Ms. Greenberg. We think there is a lot more room for
improvement. Some of them have done very good work in reaching
out, but, as we know, Facebook published ads that Consumer
Reports, the magazine, offered them with false information, and
they did not check the ads, and they published those
advertisements with, you know, deceptive advertising at
consumers.
So that exposed a gap. So we are asking these companies,
you have got to step up, you have got to do much better. And
some are better than others, but I think there is a role for
Congress to play here, and we would love to work with you on
this.
Ms. Matsui. All right. Well, thank you very much.
And I see my time is gone. I yield back. Thank you.
Ms. Schakowsky. The gentlewoman yields back.
And now I recognize for his questions for 5 minutes
Congressman McNerney.
Mr. McNerney. Well, I thank the Chair and the ranking
member.
And I thank the witnesses. This is an important hearing,
and it has a lot of impact on my district and my communities.
But before I start with questions, I would like to make a
comment.
Mr. Quaadman, in your testimony, you mentioned the
importance of broadband connectivity. In my district, 34
percent of my constituents don't have broadband service at
home. And that is why I am proud that the House passed H.R. 2,
which would ensure that all Americans are able to have
broadband.
This legislation included the Digital Equity Act that I
authored, along with Representatives Clarke and Lujan, which
would provide Federal funding to address gaps in broadband
adoption and to promote digital literacy. If we want to fully
unleash economic opportunities in our Nation, we need
significant investments in our communities' infrastructure. And
deregulation alone will not bridge the digital divide in
districts like mine.
Ms. Greenberg, in your written testimony, you noted that,
since the beginning of 2020--and this quote has been followed
up by myself and Mr. Lujan, and you gave it during your
testimony--the FTC has received more than 120,000 complaints
about scams, identity theft, and other types of fraud linked to
COVID-19. Of those complaints, nearly half indicated a monetary
loss of $78 million.
How much do you think the number of the FTC complaints and
monetary losses compares to the actual number of monetary
losses and cases that have gone unreported?
Ms. Greenberg. What we know is that most people will not
report a loss and will not reach out to Federal agencies. They
either don't know that there is a Federal agency or a State
agency, they don't know how to reach those or they even exist
to provide remedies. And people are embarrassed because maybe
they got scammed, so they are not going to report them.
Mr. McNerney. Sure.
Ms. Greenberg. So I would say that the number is probably
tenfold higher, from our experience, and maybe even worse than
that. You know, we are just estimating. But very underreported.
Mr. McNerney. Sure. That makes sense.
Mr. Anderson, is there any additional insight on unreported
losses that you might have?
Mr. Anderson. Not in terms of numbers, but I would
generally say that it has always been our feeling that, even
though we receive a lot of complaints from the public, it is
typically just the tip of the iceberg.
In North Carolina, we typically receive each year between
10,000 and 20,000 complaints, consumer-related, from North
Carolina consumers. But, again, we believe that is just the tip
of the iceberg, that people don't report for various reasons.
You know, one message that I think it is important to get
out there to consumers that Ms. Greenberg brought up is that
consumers shouldn't be embarrassed to report things when they
have been victimized by scams.
Mr. McNerney. Right.
Mr. Anderson. I mean, everyone in our society--I mean, I am
not going to mention names, but I have seen Ph.D.S be, you
know, subjected to scams. I have seen high-ranking government
officials--these scams are very ingenious. And we want people
to report them. We need the information in order to get the
information and protect other people.
So people shouldn't be embarrassed about reporting them.
And I hope we can kind of continue to try to get that message
out and encourage consumers to report these things and try to
help out their fellow citizens from falling prey to them.
Mr. McNerney. OK. Thank you for that.
Ms. Greenberg, in 2016, the FTC--and, you know, we always
feel the FTC is underresourced. But they found that Black and
Latino communities tend to be subject to fraud at higher rates
and tend to underreport cases to the FTC.
So, while the consumer education alone is not enough, do
you think that it would be helpful for the FTC to increase
outreach to these communities about how to protect themselves
against scams and steps they should be taking?
Ms. Greenberg. We would like to see the FTC to have the
resources to reach out--go to townhalls, work with your office,
do meetings in the various congressional districts, talk to
people in churches, in community gathering places, community
centers. The more people know about fraud, the better they are
at recognizing it. And it is a very effective tool, but you
have to know what a fraud looks like.
Like Mr. Anderson said, I have had very sophisticated
friends and family members fall for frauds, because the
fraudsters are very good at what they do. They read people
well, and they know what a scam looks like. And so no one
should be embarrassed about coming forward.
But knowing what they look like and how to recognize them
is important. So, yes, I do support the FTC being much more
pervasive in communities across the country.
Mr. McNerney. OK.
And I am almost out of time, so I don't expect an answer,
but I would like to understand a little bit better about peer-
to-peer scams, peer-to-peer financing scams. So maybe we can
have a question for the record on that.
And I yield back.
Ms. Schakowsky. The gentleman yields back.
And now I recognize for 5 minutes Congresswoman Lisa Blunt
Rochester.
Ms. Blunt Rochester. Thank you, Madam Chairwoman.
And thank you also to the witnesses.
Amid a global pandemic that is creating unprecedented
social, economic upheaval, the last thing anybody needs, the
last thing any American needs is to have to worry about
scammers.
And I am hearing reports, really awful reports, of
practices where people are acting as imposters, as hospitals or
doctors, demanding of my constituents payment for the medical
debts that they or their loved ones may have incurred due to
being treated for COVID-19.
And with staggering unemployment, people are struggling to
find a job, and that is making them susceptible to work-at-home
scams that offer a way out of economic woes but only after they
provide a downpayment, often via a wire transfer.
But I think the most egregious, to me, some of the worst
examples, are scammers that target seniors in nursing homes,
preying on their isolation borne from this public health
emergency. And we have heard a lot of members on this call talk
about the impacts on seniors.
I have a bipartisan bill with Mr. Walberg and also our
subcommittee's own Mr. Hudson, the Stop Senior Scams Act, that
would bring stakeholders together to proactively stop senior
scams. In fact, the Senate companion just passed the Senate in
June, and we have 13 endorsing organizations, including the
National Consumers League and AARP.
And I urge my colleagues on the committee, if you are not
already a sponsor or a cosponsor, please join us and please
support this bipartisan bill.
To the panel, can you tell the committee why you support
this bill and, you know, what specifically you are seeing that
are happening to seniors right now?
And I know, Mr. Quaadman, I actually heard you reference
our bill a couple of times as well.
So I am going to start with Ms. Greenberg, and then if I
could ask Mr. Anderson and Mr. Quaadman.
Ms. Greenberg. Yes. Thank you, Congresswoman.
And, yes, this is an opportunity to support and protect our
seniors. They are extremely vulnerable during this pandemic,
and we think your bill is so needed right now, the Stop Senior
Scams.
It is great that it is a bipartisan bill. Delighted that it
passed in the Senate. And my fellow consumer advocates and I
are so pleased that you introduced it, and we want to work with
you on getting it into law.
Ms. Blunt Rochester. Great. Thank you so much.
Mr. Anderson?
Mr. Anderson. Yes. I think it is important. I have looked
at the bill, and, without taking an official position on it or
anything, I had a positive reaction to what the bill is trying
to do. I think, again, these scams that are targeting seniors
are very important to go after and look at.
I think taking a very close look, which I understand is
part of the intent of the bill, at how seniors are navigating
marketing and scams in the digital world and how the world has
changed with technology and different things that can be done
to share information and make educating scams better for
consumers, I think that what the bill is trying to do is all
very positive, I think. I think it looks like it is doing good
things, to me.
Ms. Blunt Rochester. Thank you, Mr. Anderson.
And, Mr. Quaadman, if you have any comments?
Mr. Quaadman. Sure. Ms. Rochester, first off, I agree, as
well, that increased information is important for customers to
protect themselves. Public education is obviously a very
important step in doing so as well.
In looking at your bill, in terms of the hearing,
obviously, that is what your bill is trying to do. We are
currently reviewing it, and we will be happy to have further
discussions with you on it.
Ms. Blunt Rochester. Thank you so much.
And for any of you, if you could just share what else you
think we need to do in Congress to protect seniors.
We can start with Ms. Greenberg again.
Ms. Greenberg. When you do your townhalls, we need to
reinforce with our federal agencies and our state agencies,
don't allow seniors to be isolated and make financial decisions
that could cost them or their families a lot of money. So it is
really important that they stay connected, that they have
somebody that they can call.
There are some things you can do to protect the finances of
seniors. You know, they are alone, they are socially isolated,
and they may make some decisions that are not in their best
financial interest. So Congress can, I think, do a lot to shine
a light on how we use our Federal agencies to inform seniors
and their family members about better and stronger protections
and to make sure they are not socially isolated.
Ms. Blunt Rochester. Thank you.
I have run out of time. And thank you, Madam Chairwoman. I
yield back.
Ms. Schakowsky. Thank you.
Mr. Walberg, you have been very patient, waiting, and I am
very happy to now recognize you for 5 minutes.
Mr. Walberg. Thank you. Can you hear me?
Ms. Schakowsky. Yes.
Mr. Walberg. Can you hear me?
Ms. Schakowsky. Yes.
Mr. Walberg. We just dropped three of our Chicago grandkids
off. And I now realize I am a senior. So this is a perfect
hearing for today. I guess I don't realize it. It was just
reconfirmed.
But thank you for this hearing. Thanks for allowing me to
wave on.
And I guess Lisa Blunt Rochester asked some of my
questions. I think that is why we have cosponsored the
legislation together, because of our concerns that are going
on. We know that, in the digital age, scammers are out there.
Seniors are there with their hard-earned money, the savings, et
cetera, and so we know that they are going after them.
Let me ask one question that I don't believe has been asked
yet today, and that I would like to ask Mr. Anderson and Mr.
Quaadman.
If you could expand upon, talk about what companies can do
to prevent frauds, scams against seniors, some specifics more
towards seniors than anyone else? Because that really is a
population that is challenged right now. I know how many phone
calls I get every day, some of which I know are scams.
So talk to us, Mr. Anderson and Mr. Quaadman, about
specifics that you have seen or could expect companies to do to
help out.
Mr. Anderson. So one thing I will say that I think is worth
exploring is, are there more things that financial institutions
or banks could do to stop seniors from sending out large
transfers of money when they have been subjected to one of
these telemarketing scams.
And there are some things that they are already doing, but
I think part of the intent of the bill is to look at what can
be done there--training that can occur at the banks and
education that banks can do before a senior wires, you know,
hundreds of thousands of dollars of their life savings off to a
scammer. So I think that is one thing worth exploring.
I think maybe exploring some things involving the payment
processing, whether it is wire transfers, gift cards, and if
there are ways to, you know, prevent seniors from sending out
large sums of money via scams and those payment processing
mechanisms is something worth exploring and thinking about.
We could spend a lot of time talking about these things,
but those are some things that come to mind. And I will turn it
over to the other panelist.
Mr. Walberg. OK. Thank you.
Mr. Quaadman?
Mr. Quaadman. Sure. Thank you, Mr. Walberg.
As I mentioned before, there is a lot of work that goes on
behind the scenes with companies in terms of algorithms and AI
to look at transactions and to try and spot them and get in
touch with consumers quickly.
There are also a number of different tools that I
mentioned, as well, that companies do make available for
consumers to protect themselves and to be more aware of what we
should be doing. There is probably a better public education
that can happen to make seniors aware of what those tools are
and how they can use them.
So, again, I think there is a bit of a partnership that we
can have between the industry as well as with government that
can help educate on that and to help the further deployment of
tools.
Mr. Walberg. Well, I appreciate that.
And I would also encourage my colleagues on Energy and
Commerce, specifically on this committee, if you haven't signed
on as a cosponsor of our bill, the Stop Senior Scams Act, we
certainly would appreciate it. We want to see it move forward
and help seniors, myself included.
Thanks, Madam Chairwoman, and I will yield back.
Ms. Schakowsky. Thank you. Yes, I think there is a few of
us on the committee who could benefit from that, at least
according to age.
And I thank all of the witnesses for your participation
today. I think this was a very, very useful hearing for us. I
am sure we will be taking measures and keep that in mind as we
move forward.
I understand there are some documents for the record, and,
subsequent to that, we will adjourn the hearing, but, you know,
anyone who doesn't want to hear the documents--or does want to,
that is next.
We have a document from the Internet Association on fair
pricing; a document from the Internet Association on
counterfeit goods; a letter from the Toy Association; an
article entitled ``University Engineers, Architects Design 3D-
Printed Nasal Swabs''; an article entitled ``Robots Delivering
Food to College Campuses this Fall''; an article entitled
``Researchers Develop New Technique to Print Electronic Sensors
Directly on Organs''; and an article entitled ``Researchers Are
Tapping Blockchain Tools in Fight Against Coronavirus.''
There is more: an article entitled ``How Gig Economy
Companies are Stepping Up to Help Americans Amid the COVID-19
Pandemic''; an article entitled ``How AI Protects People from
Online Scams''; and a statement from the AAFA.
Is that it?
OK. And that is that. And, without objection, those will be
entered into the record.
[The information appears at the conclusion of the hearing.]
Ms. Schakowsky. And I remind Members that, pursuant to
committee rules, they have ten business days to submit
additional questions for the record to be answered by the
witnesses who have appeared.
I am asking the witnesses, if you are still there, to
respond promptly to any questions that you may have.
Ms. Schakowsky. And, at this time, with my homemade gavel,
the subcommittee is adjourned. Thank you so much, everybody.
[Whereupon, at 2:18 p.m., the subcommittee was adjourned.]
Prepared Statement of Hon. Richard Hudson
Thank you, Mr. Carter and thank you Madame Chair. Before I
begin, let me first extend a special welcome to one of our
witnesses, Kevin Anderson of the North Carolina Department of
Justice. In North Carolina, we have seen pervasive attempts to
defraud consumers especially among elderly populations. Last
month over $310,000 was lost to COVID related scams in our
state. Additionally, NCDOJ has received 4,908 reports of
illegal robocalls since the beginning of the COVID-19 pandemic.
This is just a small slice of what's happening across the
country but illustrates the importance of addressing this
issue. We appreciate you joining us today and look forward to
your testimony.
For the past several months, the United States along with
the rest of the world has grappled with COVID-19 and its impact
on our health, safety, and way of life. Not only has COVID-19
proven to be a deadly disease, but it has also created an
environment where nefarious actors seek to take advantage of
people's fears and the unknown for their own personal profit.
To date we have seen a variety of fraudulent activity
ranging from identity theft and financial scams to false claims
about small business loans and medical treatments.
During our hearing on misinformation in the digital age, I
discussed efforts I have taken to prevent the online sale and
abuse of opioids. I believe we must take a similar approach to
prevent the sale of deliberately misleading medications as it
relates to COVID-19.
Thankfully, there have also been significant efforts to
address these issues ranging from FTC enforcement to businesses
taking actions to find and eliminate deceptive behavior before
they negatively impact consumers. Together they have shown
theneed for both the public and private sectors to work
together on these important issues.
I am proud to have joined Mr. Carter as an original
cosponsor of the Combating Pandemic Scams Act and am pleased to
see how the use of emerging technology has not only allowed
individuals to stay connected during this historic pandemic but
also enabled us to leverage new resources to combat scams and
fraudulent activity.
I look forward to working with my colleagues on both sides
of the aisle to stay ahead of the changing nature of these
scams and yield back the remainder of my time.
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