Washington, D.C.- Today Senator McCain addressed the U.S.Committee on Commerce, Science and Transportation and gave the following remarks: Mr. Chairman, I strongly commend the Committee for addressing the issue of consumer fraud which continues to prey upon innocent victims in my state of Arizona, particularly the elderly. Advancements in communications technology have ironically proven to be both a benefit and a liability to seniors. While new technologies have provided greater choices to consumers in the marketplace, they have also widened the options of scam operators in selecting a vehicle for cheating seniors out of their savings. I have worked on two telemarketing fraud bills, S. 2494, which was unanimously passed in the Senate in the fall of 1990, and S. 1392 which was again approved in the fall of 1991. This fraud has become increasingly more imperative as the practice becomes more and more sophisticated and less apparent even to the most alert consumer. The need for enacting federal legislation has never been greater. I have been particularly concerned about the growth in telemarketing fraud and the manner in which it targets the elderly. Many senior citizens must remain at home for health reasons and rely on the telephone for making transactions of all kinds, including purchases of goods and services. While many telemarketers sell quality products, there are many scam operators which specifically target senior citizens with products which make consumers lose their savings, and, in some cases their health. This makes the practice all the more odious. Telemarketing and consumer fraud costs American taxpayers tens of billions of dollars per year. Such fraud is often committed by individuals who escape legal action by dismantling their operation and relocating to begin the operation again. In the cases of these so-called "boiler room" scams, both the victims and the perpetrators are difficult to locate since the operations often consist of nothing more than phone banks which do not readily provide detailed evidence of illegal activity. The Federal Trade Commission (FTC) has been focusing its efforts on bringing cases against consumer fraud as it is perpetrated against the elderly for some time now. I testified before the FTC on March 16, 1988 on fraud against the elderly, highlighting the various issues affecting older Americans such as health care fraud, telemarketing fraud, and fraud in the life care industry. As a result of the hearing, the FTC in March 1990 endorsed the telemarketing and consumer fraud legislation I introduced with Senator Bryan. The scope of products sold via the telephone include vitamins and so-called health products which adversely affect every part of the population. For example, in April 1991, the FTC brought charges against the makers and marketers of the Arizona-based Amerdream Corporation which misrepresented its product, the so-called “Ultimate Solution Diet Program", falsely claiming that a Harvard study showed an ingredient in the "Ultimate Solution's Night Trim" diet tablets to be effective in achieving significant weight loss and reducing cholesterol levels and blood pressure. The program also promised consumers of the "Ultimate Solution" a 100 percent money-back guarantee and a $1,000 U.S. Treasury Bond just for buying and testing a two-month supply, which has now been found to be false. I wish this was an isolated case, but we all know they are not. Every segment of society is victimized by telemarketing fraud. The elderly are always targeted by scam operators peddling phony health care products, as are those who may not have a full command of the English language. Every consumer cries out for greater law enforcement protection. Congressional action is overdue, but I also believe that it is close in coming. I appreciate the efforts that have been made by the legitimate members of the telemarketing community and by the consumer advocacy groups, both of whom have worked together in a successful partnership to fight against fraud against the elderly. I welcome all of the witnesses here today, and look forward to hearing their testimony. # # #