Gillibrand targets elder fraud

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November 3, 2009

By MEGAN MUNROE The Press Republican Wed Nov 04, 2009, 12:55 AM EST

PLATTSBURGH — In the North Country alone, an estimated 14,000 seniors have fallen victim to fraud and lost more than $4.5 million, says Sen. Kirsten Gillibrand.

Based on 2008 census data, the Federal Trade Commission estimates that of 11,101 seniors in Clinton County, more than 2,000 have been victims of fraud, losing approximately $768,189, she said in a recent teleconference interview.

Educational workshops are just one of several steps in Gillibrand's larger plan to reduce financial fraud against seniors and punish scam artists who have already swindled approximately $180 million from 500,000 New York seniors, according to Federal Trade Commission estimates. Financial literacy workshops are being held around the state in cooperation with such organizations as AARP to "help empower and protect more seniors," she said. "There is a misleading label called 'senior designation' often used to lure seniors into fraudulent investment opportunities."

These unscrupulous financial advisers aren't regulated by the state and use such meaningless titles to fool clients and gain their trust, she noted.

Gillibrand (D-N.Y.) has proposed the Senior Investment Protection Act, which she said would aid states in combating fraud by providing grants to hire staff, train law-enforcement officers and distribute educational materials.

The act would essentially give states incentive to adopt regulations set by the North American Securities Administrators Association and the National Association of Insurance Commissioners, Gillibrand said. Both organizations have created guidelines to protect seniors from investment fraud, and states gain access to the resources necessary to enact changes by agreeing to follow these rules.

Gillibrand also aims to crack down on phony salespeople and financial advisers who swindle millions from seniors. The proposed act would "target those who commit securities violations against seniors, including selling products unsuitable for their age, failing to disclose fees, charging large penalty fees or switching the investment product actually sold from the one that was marketed (and) charge an additional $50,000 civil fine for each violation that is targeted or is committed against a senior," a press release said.

The senator is also co-sponsoring the Illegal Garnishment Prevention Act, which would keep creditors from illegally collecting Social Security and veterans benefits from debtors through a direct-deposit loophole.

Eighty percent of the 50-million U.S. seniors who receive Social Security benefits do so through direct deposit, Gillibrand said.

"Because it's direct deposit, there's no way to tell if a bank account has money that's Social Security or veterans benefits," she said. "So debt collection agencies force collection without identifying that these accounts have Social Security benefits."

Finally, the proposed Senior Empowerment Act would raise awareness on issues of abusive mail, telemarketing and Internet fraud against elders and sponsor a National Senior Fraud Awareness Week in May. It would also create a database with educational materials for seniors and listings of financial advisers and their credentials. The senator said such a resource would essentially be a "one-stop shop" for seniors who usually don't learn about fraud until after they've fallen prey to a scam artist. With more seniors using e-mail and the Internet, Gillibrand said, a database would also provide information about phishing and other Web scams.

"This will basically provide opportunities for training and information to get to our seniors about the kinds of practices they use on the Internet."

The Empowerment Act would authorize $20 million in spending, while the Senior Investment Protection Act would allocate a total of $8 million over five years, from 2010 through 2014.

The closest workshop for seniors to help protect themselves against fraud is scheduled for Nov. 10 in the main classroom of the Thompson Park Zoo in Watertown. Led by a panel of experts, the hour-long session will begin at 11 a.m. and include discussions on financial management, risk factors, senior-targeted financial exploitation and where to go for help, as well as a question and answer session.

For more information on how to protect seniors from fraud, contact Gillibrand's North Country office at (315) 376-6118 or visit www.gillibrand.senate.gov.