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Protecting Consumers

Leading the Senate's panel on Consumer Protection, Claire has lifted the voices and stories of her Missouri constituents to force predatory companies and scam artists to answer for their fraudulent practices, and to enact policies to better protect families and consumers across the country. Claire has drawn upon tips and firsthand stories to launch Senate investigations aimed at schemes involving reverse mortgages, credit card companies, inaccuracies on credit reports, fraudulent robocalls, and scam artists known as "patent trolls" that threaten Missouri job and business opportunities.

Tips from Missourians

When Claire became Chairman of the Senate Subcommittee on Consumer Protection, she quickly launched an online tool on her website where Missourians could "submit their scam," and offer tips and stories for Claire to investigate.

Claire led a Senate hearing in which she highlighted the story of Brenda Campbell of Nixa, Mo. who spent years fighting to correct errors on her credit report, and was eventually forced to bring her case to trial. Claire used Brenda's story to illustrate the difficulty consumers often face in getting errors on credit reports fixed, and how common failures in the credit reporting industry result in millions of people every year paying more for or being denied credit, housing, and job opportunities. She grilled representatives of the Federal Trade Commission, the Consumer Financial Protection Bureau, and industry representatives, urging them to address the issue.

Spurred to begin another investigation by a letter from a Missouri doctor, Claire chaired an oversight hearing targeting aggressive sales and marketing tactics in the medical equipment industry. She led the hearing armed with information from her constituents, having collected stories over the course of several weeks from individuals dealing with aggressive telemarketing and letters pushing products such as diabetic testing equipment, CPAP machines, power mobility devices such as scooters, and back braces. Shortly thereafter, Claire issued subpoenas to compel executives of medical equipment companies to appear before her panel and answer for their behavior. She eventually referred 21 other such companies to the investigative unit within the Department of Health and Human Services.

Fraudulent Robocalls

Even ten years after the establishment of the popular Do Not Call Registry, robocalls still rank as a top consumer complaint received by government agencies, comprising the largest volume of complaints to the Missouri Attorney General's office, the Federal Trade Commission (FTC), and the Federal Communications Commission (FCC). The FTC alone receives over 200,000 complaints about robocalls per month. The FCC, meanwhile, has seen complaints about robocalls double between 2010 and 2012.

The Justice Department has estimated that consumers lose over $40 billion a year to fraudulent telemarketers.

With these numbers in mind, Claire set out to crack down on the elusive scams. She chaired a Senate hearing to examine how fraudulent robocalls harm consumers and what new preventative measures can stop these types of scams and protect the most vulnerable Americans. Claire, a tech leader in the Senate, used the hearing to call on U.S. telephone providers to explore implementing technological solutions to reduce robocalls received by consumers, calling the current robocall environment "a criminal sandbox."

Among those representing solutions was Aaron Foss, a freelance software developer for Nomorobo who shared part of a prize offered by the FTC for individuals attempting to develop technological solutions. Foss discussed his concept, which functions similarly to an email spam folder. Claire noted, "We have the capability of being as sophisticated in terms of technology as the bad guys-but currently our American carriers just aren't bothering to use it."

Following the hearing, Claire wrote to top telecom associations asking them to evaluate the feasibility of implementing technology to help filter out unwanted calls. Dissatisfied with their responses, Claire announced that she would draft legislation to crack down on illegal robocalls.

Credit Cardholders' Bill of Rights

Since arriving in the Senate, Claire has worked hard to crack down on credit card companies' abusive practices towards consumers. After seeing firsthand how credit card companies dealt with her mom and her college-age children, Claire understood how credit card companies often target consumers who can easily get in over their heads.

She joined with other Senate colleagues to introduce the Stop Unfair Practices in Credit Cards Act. Major provisions in that bill were included in the Credit CARD Act, which Congress passed and President Barack Obama signed into law in 2009. The bill requires credit card statements to be mailed 21 days before a bill is due, prohibits card holders from structuring payments to maximize interest charges, and puts limitations on card issuers' ability to change interest rates.

It was estimated in 2013 that the Credit CARD Act‘s fee reductions have saved U.S. consumers $20.8 billion per year.

Reverse Mortgages

Claire has been a champion of strengthening consumer protections and program integrity of the reverse mortgage program since chairing a 2007 Special Committee on Aging hearing on the matter.

Reverse mortgages allow borrowers 62 years old and older to tap into their home equity without having to move out or immediately repay the loan.

Although Claire recognizes that reverse mortgages can be helpful for many older Americans, reverse mortgages can also be risky for some borrowers because they are expensive and complicated. In practice, many seniors who lack financial guidance must rely on brokers and lenders for assistance. Unfortunately, the brokers and lenders have conflicting financial incentives, leading to marketing that rewards deals to boost lenders' profits, but increase costs to seniors. Furthermore, it has been reported that some seniors are being persuaded to put the proceeds of their reverse mortgages into expensive long-term care or annuity contracts that offer little or no benefit to the borrower while exhausting their home equity. Many now believe the reverse mortgage market resembles the subprime market, a market that substantially contributed to the financial disaster on Wall Street and the real estate collapse in 2008. Claire has conducted aggressive oversight of reverse mortgages in order to protect America's seniors, prevent more market turmoil and put a stop to abusive lending practices.

At the first hearing Claire chaired on reverse mortgages, she heard testimony about a woman whose home equity was drained after an agent used the proceeds of a reverse mortgage to buy deferred annuities, which ate up much of her home's equity in fees and tied up the remainder for decades. Claire worked to include protections against this kind of cross-selling of annuities into the Housing Economic Recovery Act. At another Committee on Aging hearing that she chaired, the Government Accountability Office testified that counseling - the single most important consumer protection - is inadequate.

Consequently, Claire backed legislation that will increase criminal penalties for fraud, strengthen counseling, and improve program integrity and enforcement activities in an effort to protect taxpayers, seniors and this program for those who must rely on their home equity for retirement.

Patent Trolls

In her ongoing effort to protect consumers, as well as Missouri jobs and businesses, Claire led a Senate investigation into demand letters used by patent trolls.

Formally known as patent assertion entities (PAEs), patent trolls are companies that purchase patents and monetize them by demanding licensing fees or settlements-usually under the threat of litigation-from unsuspecting businesses using similar technologies. Unlike some businesses that assert patent rights over patents that they own and use, PAEs do not produce any goods or services with their patents.
"We're not talking about legitimate folks trying to assert their patent when someone else is using it improperly-we're talking about bottom feeders, we're talking about scam artists," Claire said at a Senate hearing she chaired. "I think you can clearly see that these letters are scams."

Following the hearing, Claire announced she is drafting legislation to crack down on this deceptive practice.

Rules of the Road for Travelers

Claire led a Senate hearing in 2013 focused on bipartisan legislation that would ban car rental companies from renting out or selling vehicles that are under manufacturer recall. The Raechel and Jacqueline Houck Safe Rental Car Act was named after two sisters who were killed in 2004 while driving a rental car that had been recalled for a power-steering hose defect but had not been repaired. The car caught fire because of the defect while traveling on the highway, causing a loss of steering and a head-on collision with a semi-trailer truck. Claire's hearing included testimony from Cally Houck, the mother of the Raechel and Jacqueline, as well as individuals representing consumer safety groups, rental car companies, auto-manufacturers, auto dealers, and the National Highway Traffic Safety Administration.

Claire also scored a win for travelers in 2013 when she successfully urged the Federal Aviation Administration to scrap an outdated regulation that prohibited the use of portable electronic devices (PEDs) such as tablets and e-readers during the entirety of flight.

Under pressure from Claire to update the regulation, the FAA convened a technical committee to look at whether the rule put in place in the 1960s to prevent interference from electronic devices was still necessary given the advances in technology that have taken place since. The committee concluded that PEDs would pose no risk to the traveling public, and within a matter of weeks most domestic airlines had adopted policies to allow passengers to use PEDs in non-transmit mode for the entire duration of a flight.

And under sustained pressure from Claire and Republican Senator John Thune of South Dakota, the European Union reversed its efforts to impose a carbon charge on American air carriers operating flights in and out of Europe. Claire and Senator Thune had previously successfully passed bipartisan legislation to protect American consumers from the EU's illegal carbon tax on U.S. air travelers.

 

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