Leaders of the Senate Special Committee on Aging criticized the federal government and Western Union for what they described as their poor response to the growing problem of grandparent phone scams.

With this crime, imposters typically pretend to be family members with legal or medical problem calling or e-mailing senior citizens asking for money to get out of their predicament.

The Federal Trade Commission put the number of imposter complaints at 127,000 last year, but most of the fraud is said to go unreported.

When Joseph Campbell, the FBI Criminal Investigative Division’s assistant director, could cite only one instance of federal prosecution of a grandparent phone scammer in the last three years at a committee hearing, Sen. Susan Collins, R-Maine, responded that there is not going to be real progress in reducing the number of victims until a lot of the perpetrators are put in jail.

Most of the scamsters ask the unsuspecting seniors to send the money by wire. But Committee Chairman Bill Nelson. D-Fla., said the two biggest money transfer businesses in the nation, Western Union and MoneyGram, have refused to have representatives testify what they are doing to combat the problem.

Nelson threatened to subpoena the companies to force them to testify.

While wire transfer is the preferred method of grandparent phone scammers because it is hard to trace, some crooks—they are often based overseas—have victims reload repaid debit cards remotely and then steal the money.

To combat this problems, one of the largest vendors of prepaid debit cards, GreenDot, is stopping the ability to have cards filled with money over the phone or via computer and now requires cardholders to do so in person.

At the committee session, an anonymous grandparent scam victim criticized GreenDot for putting a warning on its debit card in type too small to read. The warning states, “If anyone else asks you for your MoneyPak number or information from your receipt, it’s a scam and GreenDot is not responsible for paying you back.”

One of the ways some scamsters gain the trust of their victims is by using a caller ID phone number that appears to be from a trusted person, company or federal agency.

Kevin Rupy, United States Telecom Association, Law and Policy vice president, told the committee the industry is trying to develop ways to prevent fraudsters from creating phony caller ID numbers.

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