▶ 0:13:50The committee will come to order. The chairman recognizes himself for five minutes for an opening statement. Good morning everyone. Uh, and welcome to today's legislative hearing. We are here today to consider a dozen bills aimed at strengthening consumer protections and ensuring the ftc and the consumer product safety commission have the tools they need to address challenges in today's economy.
▶ 0:14:18For decades, the ftc has served as our nation's primary consumer protection agency. Since its creation in 1914, the ftc has worked to combat unfair and deceptive practices and promote competition without unduly burdening legitimate business activity.
▶ 0:14:37From the ftc act itself to the fair credit reporting act and the more recent take it down act, the ftc has been a driving force in consumer protection issues by keeping americans safe in nearly every corner of our economy, the consumer product safety commission, or the cpsc, plays an equally important role by safeguarding the american
▶ 0:15:09Public from hazardous consumer products through education, strong safety standards, and enforcement. Uh. As online marketplaces continue to grow and imported products into the us in record numbers, it is critical that the cpsc is fully equipped to fight the wave of unsafe chinese products flooding the american market.
▶ 0:15:38Today, we will examine 12 bills that would strengthen these agencies ability to protect consumers. Several bills, including the pack act and the recycled materials attribution act, will improve transparency by addressing misleading recyclability claims while allowing for new innovations to improve recycling rates and assist job creators.
▶ 0:16:06Others, such as the terms act, would impose new transparency obligations on online platforms. We will also consider legislation such as the nitrous oxide safety act and stop the fraud act, which seeks to address unsafe products and strengthen enforcement against foreign companies that violate our consumer protection laws.
▶ 0:16:36Together, these proposals represent congress's continued effort to keep the ftc and the cpsc equipped to protect american consumers. Thank you, and I look forward to listening to the witnesses. So I want to welcome the witness witnesses. And now I'll yield five minutes to the ranking member, Mr. schakowsky, for her opening statement. Speaker 2: thank you, Mr. chairman. I appreciate.
▶ 0:17:03Um, I appreciate this opportunity. Um, but I want to tell you that, um, for many years. Speaker 3: for over a century. Speaker 2: for over a century right now, the. The, the federal trade commission has.
▶ 0:17:34Protected, has protected consumers and has moved forward. But right now what we're finding is. Trump has actually weakened the ability of consumers to get the best of all they need right now. And so, um, I want to.
▶ 0:17:58I wanted to yield at this point to representative trahan to talk about what we really need to do. Speaker 4: well, thank you, ranking member schakowsky. I also want to thank the chairman. Um, today I'm so glad to see h.r. 3209, the bipartisan app store freedom act, on today's agenda.
▶ 0:18:25And I'm grateful to my colleague, congresswoman kat cammack, for her tireless work on this bipartisan legislation. Smartphones are the front door to modern life, but apple and google control that door. Together, their operating systems power more than 99% of united states smartphones. Apple controls all native ios app distribution in this country, while google controls roughly 90% of android app distribution. That's not a competitive market.
▶ 0:18:54It's a duopoly. Apple and google can force developers into their payment systems, charge commissions of up to 30%, block customers from hearing about lower prices, and give their own apps an edge. That means consumers pay more for less choice and less innovation. A new economic analysis published this week quantifies the harm. Americans spend $52.3 billion annually through apple and google's app stores.
▶ 0:19:21If competition pushed down app store fees, consumers could save about $8.9 billion each year. The app store freedom act targets only the largest gatekeepers and offers a pro-market fix. It lets consumers choose alternative stores and default apps, install apps outside the dominant stores, and remove unwanted preloaded apps.
▶ 0:19:44It stops forced payment systems and gag rules, and it gives developers fair access to operating system features so they can compete on merit. Opponents say exclusivity is the price of security. It's not. They argue that opening app distribution and alternative app stores will invite malware scams and threats to children. And sure, alternative distribution can create risks if poorly managed.
▶ 0:20:11But the status quo is already unacceptable. Documented scams and unsafe apps like nudity apps routinely slip through apple and google's security reviews. The answer is strong safeguards, not permanent permanent monopoly control. So to be absolutely clear, nothing in this bill forces someone to use an alternative app store. Apple and google can keep operating and vetting their own stores.
▶ 0:20:37It does not require them to provide support for third party apps, and it preserves intellectual property and national security safeguards. We know openness and security can coexist. Google's play protect scans android apps from outside its store, and apple secures software outside the mac app store. Competition could also produce safe choices, including stores designed specifically for families and children.
▶ 0:21:04Security is an engineering challenge, not a monopoly entitlement. H.r. 3209 does not set prices or pick winners. It makes powerful gatekeepers compete so consumers, not corporations, decide which apps and services work best for them. Chairman. Guthrie. Chairman, bilirakis. Today is an important first step. I urge the committee to continue to work with congresswoman carmack and myself to break the duopoly and allow competition in the mobile app space.
▶ 0:21:34American consumers have waited long enough. Thank you, I yield back. Speaker 1: thank you. And I believe the ranking member yields back. Is that correct? Yes. Yes. Okay. Very good. I'll recognize the the chairman of the full committee, Mr. guthrie, for his five minutes. Opening statement. Speaker 5: thank you. Thank you, chairman bilirakis, and good morning to everyone. Welcome to the committee today.
▶ 0:21:56Today, the subcommittee will consider consumer protection legislation at a time when the us marketplace continues to change dramatically, new business practices and advancement in technology bring with them abundant new opportunities for consumers. American consumers have more choices than ever before. With just a few clicks, they can buy products and services from virtually anywhere in the world. But as the marketplace has evolved, so have the risks.
▶ 0:22:21Fraudsters have grown more sophisticated, unsafe products are making their way into american homes, and consumers are increasingly forced to navigate a marketplace that is more complex, more confusing, and harder to trust. Our existing consumer protection laws, including the federal trade commission act and the consumer product safety act, are often up for meeting these challenges.
▶ 0:22:45However, when clear when there are clear gaps in existing framework, congress has a responsibility to examine whether targeted legislative action is needed to protect american families from scams, unfair practices and dangerous products. The bills before us today address gaps in our consumer protection laws by strengthening anti-fraud efforts, keeping unsafe products imported by chinese companies out of the american marketplace, and providing consumers with clearer and more consistent information about recycling and product labeling.
▶ 0:23:15Many of the bills we are discussing today are bipartisan, and I applaud my colleagues for working across the aisle, regardless of where americans shop, consumers deserve confidence that the products they purchase are safe, the information they receive is accurate, and bad actors will be held accountable. I thank all the witnesses for being here today. I look forward to hearing your testimony, and I thank the chairman and I will yield back. Speaker 1: chairman. Yields back. I appreciate it very much. Now we have the the ranking member. You're recognized.
▶ 0:23:43Oh, okay. Miss dingell's pinch hitting for the ranking member today. So you're recognized, miss dingell, for your your five minute opening statement. Appreciate it. Speaker 6: thank you, Mr. chair. And thank you to our witnesses for being here today. I would like to read a prepared opening statement on behalf of ranking member pallone.
▶ 0:24:02Consumers are fed up with impossibly high ticket prices for sporting events and concerts, events that immediately sell out with little clarity about whether more tickets or dates will be offered, and a confusing resale market that leaves consumers unsure of who they can trust. Look no further than the fifa world cup.
▶ 0:24:24I, along with many of my colleagues, have been critical of fifa's opaque pricing, shifting rules and potentially deceptive practices that hurt everyday fans. Let me be clear this isn't a one time headache. These anti-fan tactics are rampant in the industry and will continue unless congress steps in to do something. That is why I'm glad that today we are considering a discussion draft of my boss and swift act, Mr.
▶ 0:24:53Boss and swift act of 2026, proposed in honor of his late friend and colleague and all of our late friend and colleague, rep bill pascrell, who championed fans and this bill for many years.
▶ 0:25:09The boston swift act will bring transparency and fairness to the event ticketing marketplace, including known problems like hidden fees, refund policies and practices, clarity about ticket inventory so consumers can make educated purchasing decisions prohibiting employees of primary and secondary exchanges from selling tickets at marked up prices and more.
▶ 0:25:31I look forward to working with stakeholders on this draft to ensure that fans receive the strongest possible protections when they spend their hard, in hard earned, money to buy event tickets. Thank you, Mr. chairman. I yield back on. Mr. speaker 1: thank you, thank you, I appreciate it. Thank you. Uh, now we'll hear from the witnesses. We have Mr. john hewitt, uh, senior vice president of the consumer brands association. Welcome.
▶ 0:26:00Uh, miss celia winslow, president and chief executive officer of the american financial services association. Welcome. We have Mr. john, uh. Vice president of the national consumers league. Welcome, sir. And then we have Mr. john castro, president of the information technology and innovation foundation. Welcome to all of you today. We appreciate it.
▶ 0:26:28And we'll start with Mr. hewitt. You're recognized for five minutes, sir. Speaker 7: good morning, chairman bilirakis, ranking member schakowsky, members of the committee on behalf of the recycling leadership council and the consumer brands association, thank you for the opportunity to discuss two truth in labeling consumer protection bills pending your committee's consideration.
▶ 0:26:51These bipartisan pieces of legislation are critical to addressing a conflicting patchwork that contributes to consumer confusion, discourages investment in recycling technologies, and ultimately affects the affordability of everyday consumer products. The recycling leadership council is a coalition committed to reducing plastic waste and advancing practical, bipartisan solutions to improve recycling outcomes and protect consumers across the country.
▶ 0:27:18Consumer brands association represents america's food, beverage, household cleaning, and personal care manufacturers, and we are the country's largest domestic manufacturing sector by employment, supporting more than 22 million jobs and 2.5 trillion in gdp. Both the rlc and consumer brands members products are intertwined in the lives of everyday americans. Consumer transparency, protection and safety are at the center of everything we do.
▶ 0:27:48Packaging is essential to provide safe, affordable, convenient products, and rlc and consumer brands. Members are aiming to achieve greater material circularity. Consumers want to recycle and want packaging to be made with recycled content, and companies are working to reach these goals.
▶ 0:28:07This alignment of consumer expectations with the manufacturing community's desire to meet them is the basis for our support of both the recycled materials distribution act and the packaging and claims acknowledged packaging and claims knowledge act. We applaud committee members on both sides of the aisle for their bipartisan support to strengthen consumer protections. Currently, environmental marketing claims are governed by overlapping and conflicting federal and state laws.
▶ 0:28:36The cumulative impacts are consumer confusion, unnecessary increase, consumer costs, regulatory uncertainty and stifled economic investment in domestic manufacturing. The rdma and pac act are complementary legislative solutions that will help remedy these problems. Rdma modernizes how recycling and recycled content are defined and attributed.
▶ 0:29:01The pac act addresses claims of recyclable or compostable and reusable that appear on the package. Going deeper, the rdma creates a uniform national framework for recycled content marketing claims, reduces complexity for consumers and businesses, and ensures recycling terms. Keep pace with innovation.
▶ 0:29:23Further, the rdma clarifies that innovative non-mechanical recycling technologies count as recycling as they are complementary to our existing mechanical recycling infrastructure. Collectively, these technologies greatly expand the types, formats and volume of packaging that can effectively be recycled.
▶ 0:29:45Rmas definitions are consistent consumer protection, while encouraging american innovation and domestic supply chain resilience. Similarly, the pac act is intended to reduce consumer confusion when it comes.
▶ 0:30:02When it comes to recyclable or compostable and reusable claims on consumer packaging, the pac act is limited in scope to these claims and establishes a single federal framework under ftc oversight that replaces today's confusing patchwork of conflicting state laws. This uniform framework will ensure consumers receive clear and truthful information, regardless of where the packaging was sold, while providing businesses with a harmonized labeling system across state lines. The result?
▶ 0:30:34Less consumer confusion, better end of life management of packaging, higher recycling rates and a stronger circular economy. Together, these bipartisan truth and labeling bills before you strengthen consumer protections against deceptive marketing claims, establish nationally consistent standards for businesses. Support investment in domestic recycling infrastructure, and improve the efficiency of interstate commerce.
▶ 0:31:00I ask for your support in passing these common sense, bipartisan pieces of legislation, which demonstrate that consumer protection can go hand in hand with supporting, with promoting affordability, supporting a circular economy, and investing in domestic manufacturing. Thank you very much. Speaker 1: thank you so much. Appreciate it. Now we have, miss winslow, you're recognized for five minutes. Speaker 8: good morning, Mr. chairman. Speaker 1: good morning. Speaker 8: and members of the subcommittee. There we go.
▶ 0:31:29Good morning, Mr. chairman. Ranking member schakowsky and members of the subcommittee, thank you for the opportunity to testify. Founded over 100 years ago to help americans access affordable loans, access the national trade association for the consumer credit industry. Our members have this in common. They succeed when their customers succeed. Lenders prosper when borrowers repay their loans and come back the next time they need credit.
▶ 0:31:53I'm here about an industry built on the opposite premise, one for which consumer protection laws are desperately needed for profit. Debt settlement is the only industry in the american economy that instructs its customers to stop paying their bills. In any other market, we would call this sabotage. In this industry. It's called the business plan. Debt settlement companies advertise themselves as the magic bullet, a way to reduce debt and an alternative to bankruptcy.
▶ 0:32:17Consumers enrolling with a settlement company are directed to stop making payments and communicating with their creditors. Instead, they're instructed to make payments to a new account, build up funds, and wait for the settlement company to negotiate a settlement with the creditor. In reality, these companies are misleading consumers into financial jeopardy accounts. Default balances swell with interest and late fees, credit scores, collapse collection calls and lawsuits follow.
▶ 0:32:42For this settlement, companies charge 15 to 25% of the consumer's debt. The industry's own report states that the average settlement takes more than 14 months to complete, and roughly 1 in 4 enrollees goes three years without settling an account. Consumer complaints reveal that some programs never settle, and it's not unusual for consumers to end up owing more to the debt settlement company than they did to the creditor. But that's not all. Settlement companies now lure people who are not in trouble.
▶ 0:33:11Transunion recently found that 53% of debt settlement enrollees were current on their bills the day they signed up. This isn't an industry rescuing desperate consumers. It's an industry that's taking advantage of them. I'll share some examples. A consumer in prior lake, minnesota had $37,000 in credit card debt after a house fire. In her words, they were telling me they were going to be making the payments, but it wasn't true. She learned the truth that none of her payments were going to the card company.
▶ 0:33:37Only when the creditor called her a michigan consumer paid $27,000 into a settlement program, then discovered that less than 6000 went to the creditor, a maryland college students credit score dropped 300 points, and he got sued by his creditor. A texas service member got a second opinion from a nonprofit credit counselor and learned what a settlement company didn't tell him the defaults it required could have cost him his security clearance. These problems aren't one offs. They span the country.
▶ 0:34:03Complaints from south carolina describe expensive fees from florida, broken promises from california settlement providers that simply stop communicating. The data confirmed these aren't exceptions. Transunion tested the industry's central promise that settlement is a better path than bankruptcy. The industry flunked it. Consumers who were current at enrollment saw their credit scores plunge almost 100 points. Bankruptcy filers only lost 20.
▶ 0:34:26The product sold to millions of americans as a responsible alternative to bankruptcy actually performs worse than bankruptcy. How is this happening? Consider the regulatory imbalance. Asps members operate under more than 20 federal financial laws, hundreds of state statutes, and even more regulations. The debt settlement industry, by its own associations account, answers to exactly one federal regulation, not law. The ftc's telemarketing sales rule, written in 2010.
▶ 0:34:52It is literally a telephone rule, a regulation written for the call centers of 2010 will. Critical cannot prevent all the harm that occurs today. The federal agencies and state ags have gone after a multitude of companies in this space, closing more than 400. But enforcement isn't enough. For example, the cfpb and seven states sued an enterprise that had set up a law firm as a workaround to the one federal regulation the industry is supposed to follow. They tried to collect $100 million consumers had paid in illegal fees, but the money was already gone.
▶ 0:35:22Creditors and consumer advocates, who are almost always on opposite sides, agree that there's a serious lack of consumer protection here. But congress can fix it. First, pass the debt settlement disclosures act, which prohibits deceptive ads and mandates, upfront disclosures and periodic statements. Consumers have filed more than 5000 debt settlement complaints with the cfpb. Their top issues are didn't provide services promise and confusing or misleading disclosures, broken promises and hidden terms.
▶ 0:35:49This bill addresses both with the same transparency rules that apply to virtually every other consumer financial product. Second, pass the strategic task force on scam prevention act, a coordinated federal, state and private sector strategy, is the right response to fraud that cost consumers billions each year. Consumers in distress have real lifelines already. They have hardship programs from their lenders and nonprofit credit counseling. The difference is real money. You can save thousands of dollars with nonprofit credit counselors.
▶ 0:36:18We encourage congress to act. The rapidly expanding debt settlement industry sells hope but delivers default, and congress can make honesty the price of doing business in this market. Thank you, and I look forward to your questions. Speaker 1: thank you. I appreciate it very much. I now have, uh, let's see. Mr. brown, you're recognized, sir. Speaker 9: chairman bilirakis, ranking member schakowsky and members of the subcommittee, thank you for inviting the national consumers league to testify at today's hearing.
▶ 0:36:46Founded in 1899, ncl is america's pioneering consumer advocacy organization. For over 125 years, we have worked to protect everyday americans from deceptive, predatory, and anti-competitive marketplace practices. Today, as you consider legislation shaping the ftc and cpsc, our message is simple consumers need strong independent enforcement agencies with the authority and clear statutory tools to hold corporate wrongdoers accountable.
▶ 0:37:14However, before addressing specific bills, I must voice our deep concern regarding ongoing threats to the structural independence of our consumer protection regulators. As you know, the legal landscape has shifted dramatically following rulings like amg capital management and trump v slaughter. These decisions have stripped vital enforcement tools from the ftc's toolbox and harmed agency operational capacity.
▶ 0:37:40When independent consumer protection agencies are hamstrung by political pressures, the ultimate casualties are everyday consumers and fair marketplace competition. Stripping these bodies of authority gives a flashing green light to bad actors who exploit regulatory vacuums, and legitimate small businesses suffer when dominant monopolies distort the economic playing field without fear of independent oversight. Court rulings like trump v slaughter do not have to mean the end of proper enforcement.
▶ 0:38:10If congress steps up to its constitutional role, we urge congress to proactively insulate the ftc and cpsc from political pressure condition, appropriations on agency autonomy, and exercise robust oversight to safeguard law enforcement independence. Turning to market reform now, ncl strongly urges congress to pass two critical ticketing bills the boss and swift act and the main event ticketing act.
▶ 0:38:39The boss and swift act is the gold standard for structural reform long championed by the late congressman bill pascrell. It mandates transparent all in pricing upfront. It requires primary sellers to disclose holdbacks before sales begin. It prevents primary monopolies like ticketmaster from restricting ticket resale. It regulates speculative ticket sales, and it prohibits scalping by connected insiders.
▶ 0:39:07Second, the main event ticketing act modernizes the 20 2016 bots act and closes dangerous enforcement loopholes. Look no further than the ftc's landmark live nation lawsuit against live nation and ticketmaster.
▶ 0:39:19As proof of why this bill is needed, the ftc's complaint exposed how ticketmaster monopoly actively profited from illegal scalper bots, colluding with brokers, and turning a blind eye as a matter of policy while triple dipping on primary fees, secondary listing fees and final resale markups. The main event ticketing act closes those exact operational loopholes and holds complicit platforms accountable.
▶ 0:39:47Consumers consumers support for common sense ticketing reforms like these is overwhelming. Recent survey data found that 87% of voters support mandating ticket transparency, and 94% want urgent federal action to stop scalper bots. We also want to express our strong support for hr 5967, the strategic task force scam prevention act.
▶ 0:40:12Fraud has reached epidemic levels, costing americans an estimated $195.9 billion in 2024 alone, according to the fcc. Again, $195.9 billion in 2024 alone by establishing a multi-agency task force that consults directly with consumer groups. This bill creates a unified national strategy to protect families from these devastating scams.
▶ 0:40:39Finally, we must urge you to reject two product claim bills h.r. 6832, the pac act sweepingly preempts strong state packaging laws like california's truth in labeling law without creating an effective federal standard. And h.r. 7502, the recycled materials attribution act legitimizes so-called mass balance accounting, a corporate trick that lets companies claim a bottle has 30% recycled content even when the actual item on the shelf may contain only zero.
▶ 0:41:09In closing, congress must empower our regulators and protect consumers from deceptive practices, whether in live event ticketing, fraud prevention, or product labeling. We urge you to pass meaningful reforms and reject legislation that undermines critical state safeguards. Thank you, and I look forward to your questions. Speaker 1: I thank the gentleman. Appreciate it very much. Now, we'll ask, uh, daniel castro, I apologize for calling you by the wrong first name.
▶ 0:41:39Uh, daniel, you're you're recognized. Please. Speaker 10: great. Thank you. Chairman bilirakis, ranking member schakowsky and members of the subcommittee. Uh, thank you again for the opportunity to testify here today. Online marketplaces have transformed commerce. They give americans access to more products, lower prices, and opportunities for millions of businesses to reach customers. Congress should preserve those benefits. But those benefits depend on trust.
▶ 0:42:05Consumers should have confidence that the products they purchase are authentic, safe, and accurately described, and that the businesses selling them are legitimate. Protecting consumers from dangerous goods, improving transparency and reducing fraud are essential to maintaining that trust. So, over the past year, my think tank has examined several major chinese online marketplaces serving us consumers.
▶ 0:42:26Our research found meaningful differences between these platforms and leading us marketplaces in terms of seller verification, counterfeit detection, marketplace transparency, and enforcement against repeat offenders. And those differences expose american consumers to greater risk from counterfeit products, unsafe goods, and frauds. Our research points to four conclusions.
▶ 0:42:50First, counterfeit products remain readily available across several major chinese online marketplaces, and many of those present real consumer safety risk. Our researchers purchased products that appeared suspicious and worked with manufacturers to determine whether they were authentic. We confirmed likely counterfeit products across apparel, cosmetics, toys, over-the-counter medicines, household goods, and pet products. One example stands out we purchased what appeared to be new chip roy dog treats that's a uk company.
▶ 0:43:19The packaging contained multiple spelling errors, the barcode matched an unrelated product, and the manufacturer confirmed that the product was counterfeit. The company also told us that they had previously received a report that a dog became seriously ill after consuming similar fake treats. We also purchased what appeared to be counterfeit theraflu cold medicine.
▶ 0:43:41Counterfeit medicines are particularly dangerous because consumers have no way of knowing whether they contain the correct ingredients, the proper dosage, harmful contaminants, or any active ingredients at all. These examples show that counterfeit goods are not simply an ip issue. They create direct risk for american consumers. Second, these risks reflect differences in the safeguards that online marketplaces have put in place. Leading us marketplaces have invested heavily in technologies that make online shopping safer.
▶ 0:44:10They verify sellers. They use ai to detect fraudulent listings. They identify counterfeit products, manage recalls, and maintain large trust and safety operations. These investments require significant resources, but they reduce fraud and improve consumer confidence. Our research found that several of these major chinese marketplaces have invested less heavily in these capabilities.
▶ 0:44:32Consumers shopping on these platforms often shoulder more responsibility for evaluating unfamiliar sellers, identifying counterfeit listings, and avoiding unsafe products when they receive them frequently, without realizing that the protections available to them on those platforms differ from leading us online marketplaces. Third, existing enforcement remains too reactive to change marketplace behavior.
▶ 0:44:54After we published our report, many of the specific counterfeit listings we identified were removed, but follow up research found additional counterfeit for example, over-the-counter medicine appearing on the same platform, sometimes listed under entirely different product categories. So removing individual listings is necessary, but does little if repeat offenders can quickly return. An independent evidence points to the same conclusion. After the consumer product safety commission warned consumers about hazardous products sold through online marketplaces.
▶ 0:45:23Leading us marketplaces remove those products several major chinese marketplaces, though, continued offering the same or substantially similar items. Likewise, testing commissioned by the toy association found that nearly 90% of toys purchased from two leading chinese marketplaces raised significant safety concerns, with more than 70% failing at least one laboratory safety test. Federal regulators have reached similar conclusions.
▶ 0:45:47Last year, the ftc penalized for violating the informed consumers act after determining that it had failed to adequately comply with requirements designed to protect consumers from stolen, counterfeit and unsafe unsafe goods. So, fourth, congress should expect every marketplace serving american consumers to do more to stop counterfeit products, dangerous goods and fraudulent sellers before reaching consumers. The us has one of the most open digital markets.
▶ 0:46:12Major chinese online marketplaces enjoy broad access to american consumers, but many leading us marketplaces have little or no comparable access to china's domestic market because of longstanding restrictions on foreign digital services. Open markets benefit consumers, but access to the us market should come with clear responsibilities. Companies that want to sell to american consumers should provide reasonable safeguards against counterfeit goods, dangerous products and fraud.
▶ 0:46:38Congress should therefore focus on creating stronger incentives for prevention, rather than primarily relying on enforcement after harm has already occurred. Better seller verification, stronger action against repeat offenders, greater transparency and closer cooperation with significantly address that. I want to thank you again for your attention to this issue and look forward to your questions. Speaker 1: thank you very much. We appreciate it very much. Thank all of you. All y'all did a great job with your testimony. We appreciate it very much. Learned a lot. Okay. Uh, Mr.
▶ 0:47:09Castro, uh, thank you for bringing attention to the true cost of chinese imports, which can be unacceptably high for americans who buy goods for their family with dangerous lead, uh, level, excuse me. Dangerous lead levels and toxic chemicals. The people's republic of china has long blocked american online platforms from selling into the chinese market.
▶ 0:47:35As you said, despite american companies having higher standards of governance than their chinese competitors, that's pretty obvious. By contrast, chinese platforms such as sheehan and tamu have open access to american consumers and often fail to meet basic U.S. consumer product safety standards.
▶ 0:47:57Uh, I'm pleased to see that a proposal from my fellow floridian here, uh, laurel lee, uh, would put an end to an unfair status quo that endangers american consumers. Can you share how the stop the fraud act would work in practice? And if you want to elaborate a little bit, you're welcome to. Speaker 10: absolutely. Thank you for the question. So the stop the fraud act, you know, really does two important things.
▶ 0:48:24One, it directs the consumer product safety commission to publish a list of these foreign adversary controlled online marketplaces that it develops with input from the, you know, various national security agencies in the united states. And then it would direct, um, you know, the importers sellers, um, you know, basically anyone distributing these products, um, to not do that if from any entity involved that's been designated on one of these lists.
▶ 0:48:51And that would have significant implications because again, if you look at the types of products that are coming in, this basically says, you can't do that anymore. You have to look and see where these products are coming from. If they're coming from one of these platforms that are known to be a significant source of these harmful, dangerous goods, you have to stop engaging in that activity. I think it's a very useful and important step, especially, again, given the lack of reciprocity that the us companies have to the chinese market. Speaker 1: I appreciate that very much. Thank you.
▶ 0:49:20Good explanation. I, uh, miss winslow, uh, the federal trade commission found that scams and fraud costed older, older americans $2.4 billion in 2024, a level four times higher than 2020. Can you discuss these trends and outline how the american financial services association and its members protect seniors from fraud and scams? Speaker 8: you're absolutely correct, Mr. chairman.
▶ 0:49:48Fraud is increasing at an alarming rate, and it's being driven, at least in part, by these influencers on social media who are preying on vulnerable americans, whether it's debt settlement scammers with false promises for a fake quick fix, or illegal hacks telling consumers they can clean their credit by filing fake credit disputes or false id theft complaints.
▶ 0:50:10So fca has been working with the federal trade commission to identify these fraudulent social media accounts and with congress on important legislation like the debt settlement disclosure act and the ending credit ending scam credit repair act.
▶ 0:50:23We think that this legislation and the important hearings that this committee is having, and the agencies like the federal trade commission and doj working together, we can we can cut down on the misinformation that's getting out and the scams that are taking advantage of our seniors here in this country. Speaker 1: all right. Thanks very much. I have a little more time left. Uh, Mr.
▶ 0:50:44Hewitt, businesses that manufacture and sell products nationwide are currently navigating different and sometimes conflicting state laws and standards governing recycled content claims. How does that patchwork affect investment, innovation and the ability of companies to increase their use of recycled material? Please. Speaker 7: thank you for the question, Mr. chairman.
▶ 0:51:13Currently, the patchworks that exist across the united states are providing uncertainty for businesses and consumers alike. Um, with respect to consumers, that uncertainty prevents them from recycling, uh, with respect to businesses, they have to navigate a multitude of different recycling rules requirements with respect to the marketing claims that, that correspond with them across the country.
▶ 0:51:36Ultimately, that creates inefficiencies in, in their operating, uh, as well as discourages domestic investments in the infrastructure that's needed to increase recycled content and ultimately reduce the amount of packaging that ends up in landfills. Speaker 1: a very good, good explanation. I my time has expired, so I'll yield five minutes to the ranking member of the subcommittee, miss schakowsky, for her questioning.
▶ 0:52:06Speaker 2: thank you so much, Mr. broyhill. What could happen to consumers after the supreme court decision? Speaker 9: congressman, thank you for the question.
▶ 0:52:20Uh, our concern about the impact on consumers and honest businesses, uh, stemming from the trump v slaughter decision is that agencies that were stood up to be independent of political considerations, uh, can no longer be so absent, uh, more, more engagement from congress. These are agencies that were created to be bipartisan in nature, to follow the law and enforce our statutes, regardless of who controlled the white house.
▶ 0:52:49And so our concern is that these agencies, particularly ones that are in light of the fact that many of them have already been seen, their staffing levels cut significantly under this administration, that in addition to those bandwidth considerations, they now have to look over their shoulder and consider the political implications of their decisions in ways that they hadn't didn't have to before.
▶ 0:53:10We think that that increases the risk that harms, uh, in the marketplace, that harm consumers, uh, both from product safety and deceptive practices will be exacerbated, not, uh, at a time when we need more, not less protection. Speaker 3: how do we fix the bills? How do we fixable. Have you fixed?
▶ 0:53:38Speaker 2: so what would be the, a way to talk about how we can improve the bills. Speaker 9: yes. Thank you. Um, in particular, we are, while we are strong supporters of the scam prevention act and we appreciate that it envisions, uh, helping consumers recover from these scams. In addition to focusing on prevention, we do think that more can and should be done. Uh, we know that consumers are frequently told when they've been victims of scams that there's no way to recover their money.
▶ 0:54:08Uh, we hear from consumers all the time that fraud org who are told you sent the money, uh, even though we all agree that there was fraud involved since you hit the button to send. There's nothing we can do. And now you're out. Uh, thousands and sometimes hundreds of thousands of dollars. These can be consumers entire life savings, and there's no way for them to recover that. So we would hope that bills like the scam prevention act would think about how federal policy can help.
▶ 0:54:32Those consumers can create incentives like we've seen in other countries, like in the uk, in australia, in singapore, that do look at how consumers can recover from these scams and be made whole at the end of the day, at the end of the day, that's what we want. Speaker 2: do you think we're doing our best to protect consumers right now? Speaker 9: I think there's much more that can be done. Uh, as, as my colleague to my right mentioned, the numbers on fraud keep getting worse. Every year we see more consumers being affected.
▶ 0:55:02We see more money being lost. I speculate that if I pulled all everybody in this room and asked, how many of you have a personal experience with fraud? I would have well over 80% of people raising their hands. This is a crime that is affecting millions of americans every year and goes underreported, and we need to do more.
▶ 0:55:19In particular, we need to put more responsibility on the businesses, the social media platforms, the financial services companies, the telcos who have the power and the resources to better protect consumers from these scams. We can't continue to rely on consumers to be on the front line of of reducing and avoiding scams when the scammers themselves are more organized and technologically savvy, with ai being used increasingly than they ever have been.
▶ 0:55:49Speaker 2: I couldn't agree more that we have to protect consumers. Number one, that's the most important thing. Yes. Thank you. Speaker 1: gentlelady yields back. I recognize the vice chairman of the subcommittee, Mr. falter, for his five minutes of questioning. Speaker 11: thank you, Mr. chairman.
▶ 0:56:09And I would just start by saying this issue or issue on the packaging was was brought to my attention, our office's attention through chobani, which is heavily impacted by as a function of, um, of this. And so we are still, still trying to, uh, to learn all the ramifications of it. But, um, Mr.
▶ 0:56:32Brill, I have a letter, uh, dated july 13th, 2026 from the teamsters of california. In fact, Mr. chairman, I request unanimous consent to enter that in the record. It's from teamsters of california. Speaker 1: without objection. So ordered. Speaker 11: thank you, Mr. chairman. Um, and in that letter it says our union was proud to support sb 54 in 2022.
▶ 0:56:59We represent thousands of sanitation recycling workers and have long championed source reduction and strong recycling infrastructure, protect public health, local recycling jobs. But now that regulations are finalized and the product producer responsibility organizations draft plan and fee schedule are public, we have heard from virtually every employer category. We represent the program as structured is unworkable. So that's from the teamsters letter.
▶ 0:57:27Cal cycles standard regulatory impact assessment estimated 21 billion in total implementation costs, with large producers paying roughly a $406,000 annually. The source reduction alone will cost one 15.4 billion. So there's there's obviously more to that. But, um, Mr.
▶ 0:57:47Brown, I would just ask, what's a greater threat to california's workers, consumers and businesses keeping sb 54 intact or getting rid of it? Speaker 9: well, uh, congressman, thank you for the question. Uh, I've not had an opportunity to review the letters that you mentioned. However, we do believe that states play a key role in truth and labeling laws.
▶ 0:58:14States like california particular, are ones that set the standard for the rest of the country. We know that when california takes action on a whole range of consumer safety and consumer protection issues, the rest of the country tends to follow. And so we really do look to them as a as as a bellwether for what industry can do. And certainly with regards to product, uh, product packaging and product labeling, we believe that their law can, can, and should continue to do that.
▶ 0:58:43And we're concerned about federal bills that may preempt the ability of states like california to continue to play the role they've historically played in terms of being laboratories of democracy in this area. Speaker 11: and how how is a supplier, how are users expected to be able to adhere to these costs that are unique for a particular state and not anywhere else? Speaker 9: well, I can't speak for producers.
▶ 0:59:09Uh, what I can say is that consumers believe that truth in labeling is a very important thing. And when they go to buy products in the marketplace, they want to make sure that what they see on the shelf is actually the claims made are accurate. Speaker 11: I can I can tell you that you'll have and you do have a lot of opposition in the producer world. And it's exactly why it's incredibly expensive and it's difficult to comply for one state. Mr.
▶ 0:59:36Hewitt, you represent the consumer brands association recycling leadership council, so you should be pretty familiar with recycling. And your opinion. Does sb 54 is that well intended or infeasible and cost prohibitive? Speaker 7: thank you, Mr. vice chair, for the question.
▶ 0:59:54Um, as someone who's personally who personally worked on sb 54 during the legislative process, I think that the, the intentions were everything was well intended, but I, but I think it's safe to say, as you noted from the teamsters letter, that the costs of implementation are exorbitant and they're even greater than what the state estimated during their initial economic assessment. Recent.
▶ 1:00:14A recent study that was published by californians for affordable packaging estimated that the actual cost is going to be somewhere between 56 and 78 billion, much higher than referenced in the teamsters letter. And what that equates to for the average california family is an increase in grocery costs of 683 to $948 per year for those respective households. The good news or the good?
▶ 1:00:40The good thing and and what we're here to support today on behalf of the recycling leadership council and the consumer brands association, is we have an opportunity to simplify the recycling process, reduce packaging that goes to landfills, um, and provide consumer protections through standardized definitions, um, that allow us to define terms like recyclable recycled content.
▶ 1:01:05Having these standardized federal definitions is going to establish a common regulatory framework across the country. That in turn provides consumers with a clear understanding with what recycling means and what can be recycled, and also provide companies with the certainty to invest in recycling infrastructure across the united states. Speaker 11: uh. Mr. thank you for that, and I appreciate your input there. Mr. chairman, I yield back. Speaker 1: I appreciate very much.
▶ 1:01:33And I'll recognize representative castor for her five minutes of questioning. Speaker 12: well, thank you, Mr. chairman and ranking member for calling this hearing. Thank you to our witnesses today, uh, the federal trade commission and the consumer product safety commission have very important responsibilities in protecting american consumers. They are the cops on the beat to stop fraudulent, unfair, and deceptive practices and ensure product safety.
▶ 1:01:56Uh, without the ftc and the cpsc, americans would constantly be at the mercy of scam artists. And, uh, and faulty, unsafe products. It's hard enough out there in the world today, uh, combating scams.
▶ 1:02:15And that's why it's been so disheartening watching what has been happening to the ftc and cpsc, uh, over the past 19 months, the administration has worked to actually gut these independent agencies, uh, professionals have been arbitrarily fired. Uh, many have taken their skills and expertise elsewhere. Uh, commissioners have been removed arbitrarily.
▶ 1:02:43Uh, they've, they've gutted so many of the, the fundamental roles of these, these independent agencies, there's congress directed that their independent and bipartisan. And Mr.
▶ 1:02:56Brown, I heard you loud and clear when you said, um, due to the recent trump versus slaughter, uh, ruling where the court said the president can remove leaders of independent agencies, you anticipate that these agencies will now be subject to more political pressure and kind of undermine their independence? That is in direct contradiction to what the to to pass a law to bolster the independent and bipartisan nature of these important consumer protection agencies?
▶ 1:03:28Uh, in the wake of the slaughter decision? Speaker 9: thank you, congressman, for the question. Yes, I do believe that there's an important role for congress to play to address the, uh, the, the gutting of these important consumer protection agencies and the reduction in their independence. Congress created these agencies, uh, in such a way because they wanted them to be independent. They wanted them to follow the law and to take on, uh, businesses that were harming consumers.
▶ 1:03:53When these agencies have to look over their shoulder and wonder whether they'll get fired for going after the wrong company, uh, then that will harm consumers. Not only will it harm consumers, it will harm the businesses that rely on a level playing field to compete effectively. And so I think that congress can and should seek to restore the independence of these agencies. In addition, there are other levers that congress has available to you.
▶ 1:04:20Oversight, for example, uh, control over the purse strings of these agencies through the appropriations process. Those are all tools that the trump be slaughter decision did nothing to erode. And I would encourage you and your colleagues here in congress to continue to use those levers to the greatest extent possible. Speaker 12: thank you very much. And, Mr. chairman, I think that, um, we need to we need to act to restore the independence, uh, in the power of these independent bipartisan agencies moving forward. I would think that would should be the top of the list.
▶ 1:04:50Uh, a lot of these bills are very good, but, but we're talking about the fundamental purpose of these agencies. We need to get back to that. Um, Mr. castor, I, I, I heard you also loud and clear about, um, uh, faulty products coming from china, uh, that are counterfeit and unsafe on chinese marketplaces.
▶ 1:05:12But I'm hearing from a lot of american businesses that are concerned about the american online marketplaces and the infiltration of unsafe and counterfeit products from china and other parts of the world. Uh, how do we tackle that problem? Speaker 10: it's a great question because, I mean, the reality is, of course, these counterfeiters are trying to sell on every platform they can. They want to get access to the american consumers.
▶ 1:05:39Um, I don't think any platform is going to have a perfect record in this space. Um, what I do think though, is that we want to continue to improve the accountability on these platforms. Because when you look at what's happening here, it's not just one random seller. These are often, you know, networks of individuals that are working to get these products out here. They're on multiple platforms.
▶ 1:06:01Um, there's a lot that we can be doing for responsible actors, for example, data sharing to say, you know, I found this seller and now I'm, I'm going to not only take them off my platform, I'm going to take them off other platforms by letting dhs have this information, dhs can validate it and then share it with the other american platforms. I think there's a lot that government and industry can do. Speaker 12: whose role would that be? Would you look to the consumer product safety commission? Sometimes it's it could be a safety issue, but it's also, uh, counterfeiting.
▶ 1:06:31Speaker 10: it has to be a, I think a combination. I mean, some of it's, you know, cbp and dhs that are receiving this information that could also stop some of this at the border. Some of it should be the consumer product safety commission. There's a lot of different angles to this. And so I think they all should be working together. Speaker 12: thank you. Speaker 3: I yield back. Speaker 11: thank you. The chair recognizes the chairman of the full committee, Mr. guthrie, kentucky, for five minutes. Speaker 5: thank you. I appreciate the for the recognition. I want to start by thanking my friend from texas, Mr.
▶ 1:06:59Weber, for his thoughtful leadership on the pack act, uh, which advances thoughtful approach to improving confidence in packaging, uh, the bill's reliance on independent accredited third party certification rather than allowing claims to resilient companies own representation is important, and the bill also appropriately places enforcement with the ftc, their long established consumer protection authority, while recognizing epa's technical expertise and advisory capacity. So I say all that to say. Mr.
▶ 1:07:25Hewitt, would you explain how those complementary roles create a credible and durable framework for ensuring truthful packaging claims, and why that approach strengthens consumer protection? Speaker 7: yes. Mr. chairman, thank you very much for the question. Um, first and foremost, the pack act as well as the recycled materials attribution act. Um does does two distinct things. One, it provides standardized definitions along with the third party verification to ensure consumer protection.
▶ 1:07:54Uh, whether it's the pack act or ma, those are two items that they both have in common, Mr. chairman. Um, although the green guides, which, uh, the ftc's green guides, which were last updated more than 12 years ago, have long served as the primary national framework for environmental marketing claims. Those guys are just that their guidance, uh, and in and of themselves don't resolve the conflicting state patchwork that's currently going on.
▶ 1:08:19So with respect to the pack act, when a consumer picks up a product and tries to make a decision here in washington, dc about whether or not it's recyclable or not, they want to have that certainty to know that that product is actually recyclable, and it comes with a third party verification that goes with it. They cross the river, go to their home, maybe in virginia or maryland.
▶ 1:08:41Again, they want to have the certainty that that claim that's being made and that instruction that's being provided, um, is, is, is in fact true in and of itself. Um, pack, act and ma, as I mentioned, both advance the ftc's longstanding consumer protection mission by providing statutory definitions, uh, that complement and not replace the existing ftc authority, uh, over deceptive marketing claims. Mr. chairman, thank you for. Speaker 5: thank you. So, Mr. castro, I'm gonna ask you this.
▶ 1:09:12As millions of americans shop online, they expect to have safe products.ty standards and has led the toy association. Given some platforms an f on the finding, 90% of the toys on these platforms fail to meet federal standards. We've seen attorney generals, uh, state attorney generals have brought suits against the actions against these platforms. So, Mr. castro, itif has done extensive research into the problem of dangerous products sold on chinese platforms. Why are these companies repeatedly failing to meet U.S.
▶ 1:09:40Product safety standards, and what should congress do to better protect consumers and bolster enforcement? Speaker 2: what we see is that it's a clear pattern. And it's not just a pattern. It's a strategy that these companies are using to gain global market share and take it away from american companies. The chinese government is intentionally allowing these companies to engage in creating the counterfeit, selling them and distributing them. This is part of their strategy.
▶ 1:10:06And this not only affects, of course, online marketplaces, but many of the online marketplaces in the united states. These are run by major american technology companies that are investing in ai. And the, you know, what's going to be the future of the american economy. So this is a significant impact. It goes well beyond just the counterfeits and the ip theft and then the harm to consumers. It really gets to fundamental issues of national security and economic security. So I think that's why they allow it. And it's a you know, it's a great way to attract consumers.
▶ 1:10:33If you say you're selling something for half the price or sometimes a 10th of the price. But the reality is the products that you receive are dangerous, unsafe, and not the authentic product. Speaker 8: that's nothing. Nothing. Zero. You couldn't sell a can of beans at a local grocery store in china without the government knowing what you're doing. So, uh, so, uh, so my next question for miss winslow, every, unfortunately, every member of this committee has had constituents with scams. Um, the fbi reported 1 million, 1 million reports of internet fraud, resulting in 20 billion in losses.
▶ 1:11:02So, miss winslow, how are your members helping to fight the fraud epidemic? And what more can congress do to help protect americans and hold bad actors accountable? Speaker 11: thank you very much. Ai accelerates fraud incredibly. And so we've been looking at various different ways that we can stop it. We need the ftc's help, for example, their database. You can submit a false claim of identity theft to the ftc very easily.
▶ 1:11:28And then your, uh, credit gets cleaned. So working with the ftc, and we'd love to work with congress and the ftc to make that process a little harder. We want to make sure that customers or consumers who really have their identity stolen can get help quickly and easily, but the number of fake disputes are making that harder. There's just piles, thousands of form letters that are being sent in, and that's covering up the real crime that's happening. Speaker 8: thank you.
▶ 1:11:57My time has expired and I'll yield back the time I don't have. Speaker 3: thank you. The chair now recognizes the gentleman from florida, Mr. soto, for five minutes. Speaker 13: thank you. Chairman. You know, everyone loves music. That's why I'm excited is being heard today. Obviously, it takes its name from famous artists like bruce springsteen and taylor swift. These tours were so popular, along with beyoncé's tour, that millions wanted to go so popular that it moved gdp.
▶ 1:12:25Uh, that is saying something. And what ensued for a lot of these folks, unfortunately, was a disaster for consumers. We saw some falling victim to ticket scams and websites that didn't even have access to the tickets. Others saw bots gobble up tickets. Others saw tickets surge in price through third party resales. It's a big business, too.
▶ 1:12:48When you look at, uh, online ticket sales, it was 12.7 billion in 2020 for the resale market is $2.85 billion. Florida is known for hosting a lot of these major events, especially some of those early concerts when it's cold everywhere else in the nation.
▶ 1:13:09Uh, so I was excited to see new transparency requirements in the boston swift act to ban fraudulent ticketing websites, crack down on bots that are buying all the tickets and raising prices for consumers. All this is going to be absolutely a critical part. Uh, Mr. braille, uh, it'd be great to get an understanding of, uh, how many of, uh, of these sites exist, uh, where you literally think you're buying a ticket, but they don't even have the ticket yet.
▶ 1:13:38They're going to try to buy it, uh, after you already give them your money. Uh, is this a common practice? E describing is called speculative ticketing. Uh, this is where, uh, sellers claim to have a ticket often before the tickets are even made available to the general public. They list them for sale on websites and on ticket marketplaces.
▶ 1:13:58And then consumers who buy them, they, uh, these sellers then go and try and buy the tickets later on and deliver them to you and then pocket whatever difference they can. We think that this is this is a widespread practice. It's one that's been widely reported. We think it's inherently deceptive. And we've supported legislation at both the federal and the state level that would ban it outright. Speaker 13: and then how do bots work? How do bots end up buying tickets?
▶ 1:14:25Speaker 12: well, we know that ticket resellers, uh, you will use sophisticated ticket buying bot software. These are software programs that can go out and scoop up thousands or millions of tickets in the blink of an eye, far faster than an average fan can. We think that, again, bots are the scourge of this industry and that they should also be outlawed. Uh. We were proud to be a supporter of the original bots act back in 2016.
▶ 1:14:49However, I think over the past ten years, history has shown that unscrupulous scalpers continue to employ them. And so we are urging congress to step in with bills like the main event ticketing act, and put a stop to them once and for all. Speaker 13: Mr. castro, you had mentioned your testimony that there are some third party sales that are positive. What would some of those examples of? Obviously, I bought tickets on resale before from like season ticket holders who didn't want to go to a game. An example. What are some examples of those? Speaker 2: yeah, it's a great question.
▶ 1:15:18And, you know, generally supportive of the goals of the bill. Um, I pointed out, for example, that, uh, the savannah bananas banana ball that people, you know, they've specifically tried to create a fan first experience where they're focused on how can they allow trading of tickets for someone that can't go. They, they don't impose the kind of restrictions that you see on these other platforms are not capturing, you know, double dipping on the fees. Um, it's really about making sure that people can get access to these tickets and that there's not scalpers raising up the price.
▶ 1:15:45So my legislation, you differentiate between the kind of pro-consumer pro-competitive offers that are out there with the unscrupulous ones, which I think we all want to get rid of. Speaker 13: sure. Uh, and, uh, miss winslow, you know, after law school, my dear friend, uh, who graduated with me from gw law and then ended up going to the florida national guard and wanted to buy a home, and he had done one of these, uh, debt settlement, uh, agreements a while ago before that, and was shocked to know that he couldn't buy a home for seven
▶ 1:16:16Years after that settlement would, uh, with debt settlement disclosure act disclose some of the consequences of, of debt settlement versus bankruptcy versus simply paying your bills if you're able to do so. Speaker 11: thank you so much.
▶ 1:16:31Yes, the debt settlement disclosure act would absolutely help service members and others like your friend who thought that they had an easier solution or a consumer friendly solution, and ended up being trapped that didn't realize their credit scores were going to drop, that they wouldn't be able to get future loans. And so something like this, it's an important disclosure mechanism. It's what every other everyone else in the industry does.
▶ 1:16:53You know, before you take out a loan, you get a disclosure right up front that tells you how much you're going to pay each month, what the interest rate is, etcetera. So just bringing some of those common sense things over to the debt settlement industry that now has 10 to 14 billion. Speaker 13: thanks so much. Thank you. I yield back. Speaker 1: thank you very much. I thank the gentleman. Now, recognize miss cammack, uh, from the great state of florida for her five minutes of questioning. Speaker 14: thank you, chairman guthrie. And go, gators.
▶ 1:17:21Um, and thank you, chairman bilirakis, for your leadership on this subcommittee. Um, particularly grateful today for, uh, placing h.r. 3209, uh, within the bills being discussed today. The app store freedom act. I am so proud to lead this bipartisan legislation alongside my friend and colleague, congresswoman lori trahan. Now, something that shouldn't need to be said, but we're going to say here today is that consumer protection begins with a simple principle common sense.
▶ 1:17:51If a company overcharges you, mistreats you, or stops earning your trust, you should be able to take your business elsewhere. In almost every market in america, you can, except on your smartphone. You can't. So apple and google's operating systems power more than 99% of smartphones in the united states. Apple controls app distribution through the iphone, and google controls roughly 90% of app distribution on android and apple and google. They don't just compete in the market, they control the market.
▶ 1:18:23They own the road. They own the storefront. They own the checkout counter. They write the rules, and then they charge everyone a toll just to pass through the gate. The developer builds the product and apple and google while they collect the toll. Meanwhile, american families and consumers are paying the price.
▶ 1:18:39An independent economic analysis estimate estimates that if real competition replaced the monopoly pricing, american consumers could save nearly $9 billion every year, and that's about $112 annually for a family of four using smartphones. And that may not matter in silicon valley, but it matters back home. $112 is ten weeks worth of school lunches for folks in my district, and this is just one of countless examples where the duopoly of apple and google are costing consumers real money.
▶ 1:19:10So, Mr. chairman, I ask unanimous consent to enter into the record. The study, entitled U.S. consumer benefits of unlocking competition in app distribution on smartphones. Speaker 1: without objection, so ordered. Speaker 6: thank you. Speaker 14: the app store freedom act restores consumer choice. It allows consumers to choose alternative app stores, install apps outside the dominant stores if they choose, select competing payment systems, and removes the gatekeepers ability to block competition before it ever reaches consumers.
▶ 1:19:38One of today's witnesses from itif, they're arguing that this bill, in their testimony would weaken privacy and security safeguards. This is the same organization that lists apple and google among the organizations contributing to their organization. $10,000 or more. And respectfully, I think they have it backwards in their own testimony. They acknowledge that the marketplace increasingly needs competition to protect the quality and the protections on the store. Exactly. And that's what our bill provides. It enables that.
▶ 1:20:09So today, apple and google prevent meaningful competition. They're the gatekeepers. They're the only game in town. And when their security systems fail and they do, consumers have nowhere else to go. That isn't security, that is captivity. So just days ago, san francisco city attorney sent apple and google cease and desist letters demanding that they remove 13 ai nudity and face swap apps allegedly allegedly used to facilitate non-consensual sexual images.
▶ 1:20:36The city further alleges that the platforms collected a cut of the in-app purchases while those apps remained available. Mr. chairman, I ask unanimous consent to enter into the record a title or an article titled apple and google ordered to purge new defi apps from their app stores. Speaker 1: without objection. So ordered. Speaker 14: thank you. Researchers also identified more than 200 fleece wear apps that generated over 1 billion downloads and hundreds of millions of dollars through deceptive subscriptions.
▶ 1:21:03After passing through these same app stores. Mr. chairman, I ask unanimous consent to enter into the record. The article, titled apple's tightly controlled app store, is teeming with scams. Speaker 1: without objection. So ordered. Speaker 14: thank you. And the security failures do not stop there. A recent investigation by the tech transparency project found that apple and google continue to distribute vpn applications from undisclosed ties to chinese companies, including the chinese military, according to the report.
▶ 1:21:32Many of these apps remain available even after apple and google were alerted to the risks. Mr. chairman, I ask unanimous consent to enter to the record. This report, entitled spot check. Apple and google still have a chinese vpn problem, and a forbes article from april 12th of this year titled the fbi issues a chinese app warning for smartphone users. Speaker 1: without objection. So ordered. Speaker 14: thank you. You can probably tell we come with receipts.
▶ 1:22:00Now these companies are telling congress that they alone can protect americans. Yet they have nowhere else to go. Our consumers. Apple isn't short on money. It's short on competitive pressure. When no one can leave, it has no incentive to improve. This bill does not eliminate the app store or google play, and it doesn't force anyone to use an alternative if apple builds the best app store. Consumers will choose it. If google offers the best security.
▶ 1:22:28Consumers will stay, but they should have to earn that business, not lock americans into it. The app store freedom act puts the principle of choice and competition into practice. Mr. chairman, I ask unanimous consent to enter into the record a final item, a coalition letter supporting h.r. 3209 from the little tech association. Speaker 1: without objection, so ordered. Speaker 14: thank you. This bill doesn't pick winners and losers. It lets consumers decide who they want to use, and it lets consumers choose.
▶ 1:22:58We can do that by passing this bill. Let's make apple and google compete for americans trust instead of assuming it. I respectfully urge the committee to place h.r. 3209 onto a markup agenda. This. Congress and I yield back. Speaker 1: thank you. Gentlelady. Yields back. Now recognize Mr. mullen for his five minutes of questioning. Speaker 8: thank you, Mr. chair. Thank you all for being here today. Thank you to the chair and ranking member for including my bill, h.r.
▶ 1:23:267945, the nitrous oxide safety act, in today's hearing. Nitrous oxide misuse is real and a growing problem. 14 million americans say they have misused the chemical. And fatalities have increased by 578% in the past decade. Even a single use can cause debilitating effects like blood clots and neurological damage.
▶ 1:23:55Despite these risks, nitrous oxide is being marketed as a party drug with names like miami magic and galaxy gas in brightly colored canisters and flavors. This is clearly targeting both kids and adults for recreational use. Companies claim it's merely for making whipped cream.
▶ 1:24:15I learned of how widespread this product is when a youth commissioner in my home county, san mateo county in california, which I am proud to represent, proposed a retail ban. I had also heard from constituents about this issue when I was serving in the california state assembly. But this is a national problem. To that end, my bill would direct the consumer product safety commission to make nitrous oxide a banned hazardous product.
▶ 1:24:42This would have the effect of prohibiting its sale for household and recreational use. The bill is carefully drafted to ensure legitimate uses would not be impacted, such as in dentists offices, commercial kitchens or automotive settings. Banning consumer sales through the cpsc would also ensure sellers cannot merely label a product. As for food.
▶ 1:25:05To get around it, this bill would also not affect the availability of integrated canisters of whipped cream and baking. Hobbyists have many other ways to whip cream that are cheaper and just as effective. Behind me are just a few of the people across the country who have died or been seriously injured from nitrous oxide. We're also seeing a growing number of nitrous related duis and people being killed by drivers using it behind the wheel.
▶ 1:25:34I want to recognize two families in the audience today, represented by julia and michael charleston and jerry gray benetti. Each has a loved one who has struggled with or has been sadly lost to nitrous oxide. I'm grateful for you being here.
▶ 1:25:56Thank you, julia and jerry for your tireless advocacy, channeling the tragedy that you have faced and organized hundreds of parents pushing to get nitrous off our shelves. I'm honored to partner with you on this work. In advance of this hearing, I've received more than a dozen letters from parents and other loved ones impacted by nitrous oxide misuse. I am submitting those for the record.
▶ 1:26:21One of my constituents in hillsborough, california, writes about her daughter who struggles with nitrous. Quote. There is no reason for anyone over the age of 21 to legally paralyze themselves with this substance because they suffer from the disease of addiction, and their drug of choice is legally available. We love our daughter deeply and are begging for reasonable assistance in getting this stuff off our streets.
▶ 1:26:46A parent in florida writes, quote, every day that nitrous oxide remains so easily accessible is another day that another family, son or daughter may begin a life threatening addiction with consequences they never imagined. A mom from oklahoma shares, nitrous oxide destroyed my life. Please keep americans safe and never make another mother bury their only child. I want to be clear that I do not take bans of any kind lightly. We should be sure of products.
▶ 1:27:16Benefit to society is outweighed by its harms. In my view, this bill is the right approach because of how dangerous nitrous oxide is. Regardless of the age of the user, the number of times they use it or the size of the canister. I urge this committee to advance the nitrous oxide safety act in the coming months. It is bipartisan. Lives are on the line. Thank you, and I yield back. Speaker 1: I thank the gentleman. Now recognize Mr.
▶ 1:27:45Bentz for his five minutes of questioning. Speaker 15: thank you, Mr. chair. And thank you for being here. As an attorney back in oregon for many, many years. I had occasion to work with folks in various debt settlement arrangements. And one of the things that came up repeatedly was their surprise when they learned that they were going to have to pay taxes on, on that, which was forgiven.
▶ 1:28:10I'm just curious if this is an issue that should be addressed in the bill we've been looking at to address these debt settlement challenges. Should should the tax exposure be something that's that's that's discussed? And I think the proper person to ask is, miss winslow, this question. So what's your thought? Speaker 11: yes, absolutely. Uh, the citizens in oregon are not alone there.
▶ 1:28:38There's often surprise at the end when consumers realize that they owe additional money that they didn't know was coming. And that should absolutely be part of the disclosures that consumers have up front. Speaker 15: yeah. I glanced through the bill, and I didn't it didn't jump out at me, but it seemed to me that that would be something you absolutely would have to disclose at the front end. Otherwise, it's easily ignored. And then suddenly, uh, it, if you, if you draw an audit in the, in that unlikely event.
▶ 1:29:05But even at some point it could become a problem. I want to shift to, uh, to strict liability in tort. And we had a number of opportunities back in my law practice to bring cases in, in that context. And it's a device, of course, that's, that's available when you are damaged by harm from some, uh, dangerous product.
▶ 1:29:30And it's there because there isn't necessarily going to be recourse in any other fashion. And it's there because there are dangerous products that make their way through this system that we put in place to try to catch all of those that aren't. Here was the problem. And when, when someone would come into my office and say, hey, we, we I remember one case. It was horrid.
▶ 1:29:53Um, but a young young person had been dealing with one of these masks that you put on it as an elastic band around it. On the end of it, it has a sharp projectile as it turned into. And when he pulled it on, it popped off and hit him in the eye and he lost his eye. And so the question was, who? Who made this? Who, who did, who created this, uh, thing that had this dangerous element. And so I'm asking, um, and I guess I'll, I'll, I'll turn to Mr. castro first.
▶ 1:30:21Is this something that, uh, that we should be talking about in this legislation where we try to make people at least identify where they're from, who they are, the people producing these things so that in the unlikely, in the unfortunate event that there isn't speaking on these dangerous things, there might be recourse through strict liability. I mean, and again, I can think of all kinds of weaknesses and frailties and what I'm suggesting, but please comment.
▶ 1:30:52Speaker 2: you're absolutely right. The question of liability is, is really important here, especially when you start talking about the online marketplaces because the seller is different than the marketplace, the seller is the one that might have the liability. But if you're talking about an overseas seller, you might have really no ability to have recourse. So I think that transparency is important so consumers can make good decisions.
▶ 1:31:10But one thing that we are seeing that's really important here is that buying on certain platforms, for example, amazon, they've made guarantees so that when you're buying, you don't have to basically care where that seller is because they're providing the guarantee that they'll be recourse available for you that they're adding on. And so I think that's something that consumers often aren't aware of. Um, and that's one of the differences of american platforms. I'd like to see more platforms move in that direction.
▶ 1:31:38So no consumers put in a situation where they have a significant harm and absolutely no recourse. Speaker 15: but the, your, the point you're making is that those people who choose to use that particular platform do have that extra level of protection in the event that the product is actually dangerous. That's right. And so that should be called out in some fashion so that when people are shopping online, which seems like everybody does now, they actually know, uh, that this extra level of protection is available.
▶ 1:32:07That seems to me to be something we ought to be considering here, because I'm not sure that the consumer is fully aware of that, of that option. Speaker 2: I think you're absolutely right. And I think one of the questions is how much of that should be competition between marketplaces versus, uh, mandates or guarantees put forth by government. But you're absolutely right. That is a central question right now. Speaker 15: um, well, thank you so much for this. Most interesting your presentations. And with that, Mr. chair, I yield back. Speaker 1: thank you. Thank you very much.
▶ 1:32:36Now, I recognize miss clark for her five minutes of questioning. Speaker 16: good morning. And thank you, Mr. chair. And I thank our ranking member janice schakowsky for holding this legislative hearing. And thank you to our panel of witnesses for joining us today.
▶ 1:32:52Time and again in this congress, I've sat at this dais and sent out an alarm to my colleagues of the dangerous, systematic destruction of the ftc and its independence from the white house. For over 100 years, the ftc has been the cop on the beat against fraud, scams, and deception because congress gave it the trust and authority to enforce appropriately.
▶ 1:33:20And only a year and a half, trump and his conservative supreme court have unjustly fired the democratic commissioners of the ftc and ended 90 years of precedent allowing the president to fire ftc commissioners at will, directly gutting the guardrails in congress that congress has placed on the agency to ensure independent, bipartisan work.
▶ 1:33:51This administration is bad for consumers and bad for business. Without a bipartisan ftc, consumers will lose their unbiased advocate to obtain recourse when they've been taken advantage of by scammers. While there are all not perfect, many of the bills are part of that are part of this hearing today.
▶ 1:34:16Seek to solve real issues impacting americans, though without the intended independence, trust and authority maintained by the ftc. How can any of these bills properly seek protection and recourse? So, Mr.
▶ 1:34:32Brad knott, with the recent scotus ruling in trump v slaughter, how do you recommend congress effectively legislate when the independent agencies we once trusted to enforce laws are no longer independent? Speaker 12: congressman, thank you for the question.
▶ 1:34:52I couldn't agree with you more that bills like the ones that are up for consideration today, as well as many of the bills that are already on the books that protect millions of consumers, are only as effective as their enforcement. And the role that the ftc plays in protecting consumers from unfair and deceptive practices has never been more necessary than it is today.
▶ 1:35:11Absent a bipartisan ftc one where both parties are represented, one where the commissioners don't have to constantly worry that they're going to be fired if they go after the wrong company. Those laws are not are only not worth the paper that they're written on. And so I think that congress can and should pass legislation that reverses trump v slaughter.
▶ 1:35:35You can also use your other levers that you have available to you through the appropriations process, through oversight, for example, to make sure that these agencies, the ftc, the cpsc and other independent agencies continue to do the critically important work that they must do to protect america's consumers and competition. Speaker 16: very well, thank you. And going forward, how can congress best hold the ftc and the cpsc accountable to ensure that they are acting in the best interest of all americans?
▶ 1:36:05Speaker 12: well, congress's oversight function has never been more important than it is now, particularly in an environment where we do have agencies that are not acting, or at least not led by bipartisan commissioners. Your role is more important than ever. And I think also there's a role to be played by the states. So avoiding passing legislation that prevents the states from playing the important consumer protection role that they have that they have always played, and that's more important than ever, is also one way that congress can help protect consumers and small businesses.
▶ 1:36:35Speaker 16: very well. It couldn't be simpler. The ftc has been an effective and trustworthy commission that congress has repeatedly expressed confidence in, entrusted with expanded authority, but the trump administration is doing is shameful, and my republican colleagues are enabling and supporting a more dangerous marketplace and online experience for all americans. And I'll remind you all one more time this is all out of the project 2025 playbook. With that, I yield back.
▶ 1:37:09Speaker 1: thank you. And I recognize miss houghton for her five minutes of questioning. Speaker 17: thank you, chairman and ranking member schakowsky, for holding this hearing today. I want to thank the witnesses also for offering your testimony. Um, I'm pleased to see that h.r. 5967, the strategic task force on scam prevention, uh, which I'm proud to co-lead is including included in the hearing today. I want to thank my colleague Mr. menendez for his partnership on this bipartisan bill.
▶ 1:37:38Fraud in this country is no longer a nuisance crime. The ftc estimates that once underreporting is accounted for, americans have lost roughly $196 billion to fraud in 2024 alone. And the problem is not that nobody is working on this at the federal level. The problem is that everyone is working on a different piece of it. There's no single agency that is seeing the whole picture.
▶ 1:38:07Our bill directs the ftc, in conjunction with the department of justice, to convene an interagency task force to develop a national strategy to address these scams, one that puts consumer complaint databases to work, invests in public education, coordinates with industry, sharpens enforcement, and works with our international partners. It's very frustrating when we have constituents that call and say, well, I've put my name in the database and it seems to go not much further than that. Mr.
▶ 1:38:37Castro, you write that effective prevention depends on identifying patterns across complaints, across marketplaces and payment systems, and other source of sources of information that that no single agency sees on its own. And do you recommend the task force prioritize exactly that kind of data collection and information sharing? So I want to start with you. Is there any entity in the federal government today whose job it is to assemble that composite picture?
▶ 1:39:08Speaker 2: there's not you're exactly right. It's just pockets of activity, but no cohesive work. Speaker 17: and that may be why constituents feel like they've just, you know, shouted into the void when they're suffering from these, uh, victims of fraud. Speaker 2: exactly. Speaker 17: uh, so what is actually stopping it? Is it, is it authority? Is it statutory restrictions on sharing? Is it willingness? Is it capability?
▶ 1:39:33What's preventing us right now from having that, that kind of data collection and information sharing? Speaker 2: there's no real ownership right now over who's going to be responsible for that and why they can and should be collaborating. There's also no direction that they should be working, I think, with the private sector to share that information. So that information collected about one activity that's illegal and harmful is shared with another branch of government, because often these are organized criminal networks. Speaker 17: and states.
▶ 1:40:00Attorneys generals are they're trying to do their part to tackle some of this fraud in a state by state basis. But at the same time, that information sharing would be important to correct. That's right. Uh, you recommend explicitly including online counterfeiting and piracy within the task force scope, uh, adding online retailers and marketplaces to the industries that should be consulted. Can you say more about why those platforms in particular should have a seat at the table?
▶ 1:40:30Speaker 2: they often have insight into, obviously, what consumers are seeing. They're the first ones to hear a complaint about a product they might receive before the cpsc. So they actually have that intelligence to say, wait a second, I'm getting complaints about this product. It's because it's a fraudulent product. So they have information no one else has. And then we talk about online piracy, for example, online piracy. Consumers are going to all sorts of sites that are not legitimate. And that's where malware is being distributed. That's where other types of scam ads are being distributed.
▶ 1:40:58So they also, uh, you know, the legitimate streamers are seeing where some of those consumers are going and they have insights as well. Speaker 17: and we're seeing repeatedly, uh, I see it on my own feed, lots of scam ads where it's, it's advertising a product mostly from china that you cannot buy. Uh, and it's intended to steal your data. It may be your financial information. Uh, and the retailers are the first people, uh, potentially to see some of these scams.
▶ 1:41:25Um, there are other online platforms that I think may, uh, we may want to, speaker 1: these scam ads that we might see on on non retailer sites. Do you agree? Speaker 2: I agree to give a very specific example. When we bought some of these counterfeits, what was interesting is in the package came advertising to say when you want to buy something else, go to this other site. So they were actually directing you to who knows where. Speaker 1: um and scam and a scam.
▶ 1:41:55Speaker 2: further scams. Speaker 1: exactly. Well, thank you for your leadership. Um, americans are losing nearly $200 billion a year to criminals who seem better coordinated than the government. I think we can do better. We can fix that with h.r. Five nine, six seven, as I hope this will move through the committee process. Thank you, Mr. chairman. I yield back. Speaker 3: I thank the gentlelady. Now recognize miss dingell for five minutes of questioning. Speaker 4: thank you, Mr. chair. And thank you again to the witnesses. Consumer protection is about trust.
▶ 1:42:22Families should not have to worry that the products that they buy are unsafe, that their personal information will be exploited, or that sophisticated scammers are waiting to steal their hard earned savings. These aren't partizan issues. These are issues that are affecting every american, regardless of where they live or how they vote. And a scam has become more sophisticated. Congress has a responsibility to ensure our laws keep pace.
▶ 1:42:50But strong laws alone aren't enough. They got to be enforced. And that's why I remain concerned by this administration's efforts to weaken the agencies charged with protecting consumers. At a time when americans are facing higher costs and increasingly complex fraud schemes, we need to be strengthening, not weakening the institutions that are there to keep people safe.
▶ 1:43:16But I want to focus on congressman menendez and congressman hoskins bipartisan strategic task force on scam prevention. The scam prevention act, which I'm very proud to support, and I appreciate their leadership on this important effort. Scams have evolved dramatically in recent years. Criminals are using artificial intelligence, fake websites, spoof phone numbers, text messages, and social media to target americans every day.
▶ 1:43:46In 2020, five, americans reported a $15.9 billion in fraud losses, and we know many more victims never reported what happened. Investment scams caused the greatest financial losses, followed by imposter scams. While nearly 30% of reported scams originated on social media, older americans continue to bear the greatest financial harm.
▶ 1:44:14I have literally had a met with a woman who was convinced she was going to marry somebody from downtown abbey and had given her entire savings to this man. And I probably shouldn't say this, but I'm going to my own mother. Somebody called her and she actually, this is the most recent one. They're gaining access to seniors computers and then getting into their financial accounts and changing passwords.
▶ 1:44:44Thank god my mother's financial advisor called me and I figured out that they had done that. But we've got to figure out how we educate people better. And that's why we need a coordinated national strategy that brings together government, law enforcement, financial institutions, and the private sector to stop scams before they happen. Mr.
▶ 1:45:06Brad knott, from your perspective, what are the biggest gaps in coordination today and how would a task force improve collaboration to better protect consumers from scams? Speaker 5: thank you for the question, congresswoman. Uh, with regards to this act, it addresses a structural deficiency that we have in addressing fraud in this country.
▶ 1:45:28The scammers don't care about silos and which agency is responsible for the financials or the social media platform or the text message they sent you. They just want to take your money and as much of it as they can. So what we need is a response to prevent. In terms of prevention, that also cuts across all of those silos, we know that many different actors in the industry, and many different actors in law enforcement and government receive signals that fraud is happening.
▶ 1:45:55But if they're not exchanging information, they don't know how to hold these bad actors accountable and ultimately bring them to justice. That's why bills like this one are so important. They seek to break down those silos, create a single place where this information can be shared, and hopefully that will lead to stronger enforcement, better safeguards by these industries that depend on customers, business, and hopefully fewer constituents like your mother and others who are victims of fraud every year.
▶ 1:46:26Speaker 4: thank you. Scammers continue to evolve faster than our response, which is another problem. They've moved from robocalls to text messages, cryptocurrency, artificial intelligence, making these scams more convincing and more difficult to detect. Mr. brown, how can congress ensure our consumer protection efforts keep pace with these emerging technologies and increasing sophisticated fraud schemes?
▶ 1:46:52Speaker 5: well, I wish there was a single action you can take, but there are so many I don't have time to list them all. Certainly making sure that our consumer protection agencies are fully staffed and have the authority that they need to go after these bad actors is step one. Passing bills like the scam prevention act is another way to do it.
▶ 1:47:07We also believe there's a role for congress to play in creating incentives for the various companies that consumers depend on, and that scammers misuse the banks, the social media companies, the telecom companies to better reinforce their networks and protect consumers from these scams in the first place. And finally, we know that even with all of these efforts done, if we could wave a magic wand today and have them all in place, consumers would still be victims of fraud. Because, as you mentioned, the scammers are moving so much more quickly.
▶ 1:47:35And that's why we need to have a robust way for consumers to to be made whole after these scams occur. Speaker 4: thank you. I'm out of time, Mr. chairman, but I am going to ask some more questions on the record. Thank you. Speaker 3: excellent. Very good. All right. Now I recognize Mr. cain for his five minutes of questioning. Speaker 6: thank you, Mr. chairman. And thank you to our distinguished witnesses for being here today in my home state of new jersey.
▶ 1:48:00I've heard from constituents who have spoken firsthand about the dangers of a product found in gas stations and convenience stores across the country. Nitrous oxide canisters. This product, also known as laughing gas, can also be used as a culinary propellant for products like whipped cream. In recent days, however, there's been an epidemic of misuse of nitrous oxide as an inhalant that gives users a high.
▶ 1:48:25His abuse can lead to heart attacks, nerve damage, muscle spasms, numbness, birth defects, paralysis, and even death. Nitrous oxide canisters full of this dangerous and deadly substance are being sold without restriction to youth and adults who have no knowledge of the dangers associated with the substance of their inhaling.
▶ 1:48:46And that's why today I am sending letters to gas stations, convenience stores, online retailers across the country who have sold nitrous oxide to unsuspecting consumers. Mr. bryan, the inhalation of nitrous oxide represents a real danger to the american public. Would you agree that the sale of nitrous oxide cancer gas stations presents a scenario where most consumers are not legitimate culinary culinary businesses?
▶ 1:49:15Speaker 5: well, it's clear that the sale of nitrous oxide for recreational use is dangerous to consumers. It's not made to to it's not it should not be used for recreational purposes. And we would support efforts to get it off the market for those uses. Speaker 6: and I share your concern, and I look forward to hearing from these gas stations on measures that they plan to take to ensure that nitrous oxide is not sold for illegitimate purposes. Mr.
▶ 1:49:38What steps would you believe that congress should consider in taking to consider to address the abuse of nitrous oxide by american consumers? Speaker 5: well, congressman, we've been very happy to work with congressman mullin's team on this nitrous oxide bill that's being considered today. Um, we do believe that this is a dangerous product that should not be on the market for recreational use. And we're happy to see that some of the legitimate uses for it are continue to be protected.
▶ 1:50:03And we look forward to working with him and with you to make sure that no more families have to experience the heartbreak that so many who are here in the room today have experienced because of the misuse of this product. Speaker 6: thank you. Thank you for your testimony, Mr. castro. I am pleased that my bill, the defending against foreign propaganda act, under consideration at today's legislative hearing. China and russia have long sought to wield influence on american opinion, seeking to influence america's policy makers through a variety of media formats.
▶ 1:50:31How does foreign propaganda threaten to unduly influence americans without awareness of the entities that are influencing them? Speaker 2: and that's a great question. Thank you for it. I think right now you have, of course, advertisements across all sorts of different platforms, and consumers benefit when they know who it is that's actually speaking to them. Uh, transparency in this information is critical so that they can be informed consumers and understand what information they're receiving and whether or not it's trustworthy.
▶ 1:51:01Speaker 6: um, as a follow up, this bill also makes clear that foreign governments who pay for ads in america must disclose their affiliate government. Do you believe that robust disclosure requirements for foreign government funded ads would increase public awareness of malign foreign influence efforts? Speaker 2: I think it's a great a great step forward. I think we want to look comprehensively at all the different ways that that foreign influence can, can seep in here, because what we're seeing in advertising and commercial settings, for example, is that sometimes it'll be a step removed.
▶ 1:51:31So they might hire an influencer who does a, you know, some kind of information. So it's not a paid ad. Instead it's organic. Um, and so I think we want to make sure that disclosure trickles through the entire information economy. Speaker 6: thank you. And I yield back my time, Mr. chairman. Speaker 3: appreciate it very much. And now I believe we're going to yes, we're going to go to to congresswoman kelly. You're recognized for five minutes of questioning. Speaker 7: thank you, Mr. chair and ranking member.
▶ 1:52:00This is such an important hearing. And thank you to all the witnesses. I think everyone on this committee shares the same goal. We want to protect american consumers from fraud scams and dangerous products. Scammers use artificial intelligence, impersonate loved ones, criminals use phishing attacks to steal americans personal information. And online marketplaces are flooded with counterfeit and unsafe goods.
▶ 1:52:27Consumers lose billions of dollars each year to fraud, almost 16,000,000,000 in 2025, and those losses continue to grow. And that is why I'm also a co-sponsor of the strategic task force on scam prevention act. This bill would ensure that the federal government has a national strategy to stop scams and protect consumers.
▶ 1:52:47This legislation builds on my bill that passed the house last congress, the protecting seniors from emergency scams act, which directs the ftc to to create a searchable database of scams and work with the media and government agencies to distribute information to seniors. But as the congresswoman just said, legislation alone doesn't protect consumers. And at the end of the day, these laws must be enforced, and the agencies tasked with enforcement need to be well staffed.
▶ 1:53:15However, and you've heard this already since this administration's doge driven layoffs, key agencies tasked with protecting consumers are severely understaffed. Mr. brown, if congress directs the ftc to lead this new inter-agency scam prevention task force, what personnel and expertise will be necessary to make that effort successful, rather than simply another report on a shelf? Speaker 5: thank you for the question, congresswoman.
▶ 1:53:42Uh, certainly this bill includes requirements that there be consultation with a range of agencies, including the consumer protection agencies, who all have a role in protecting consumers from frauds and scams. We think it's a good mix. And we also appreciate the fact that the bill envisions that this task force consulting with consumer groups, with industry as well as other stakeholders in the fight against fraud, because there's no one stakeholder that's going to solve this problem alone to the point of, uh, of resources.
▶ 1:54:11You know, the at the times when the threats to consumers, uh, have never been greater, uh, the fact that the cpsc and the ftc have, uh, said that they intend to reduce their workforce substantially, I think is counterproductive to the goal of protecting consumers from frauds and scams. We need more cops on the beat, not fewer. And I think that this is and should be a bipartisan issue. Uh, people are don't want to be scammed. They don't want unsafe products in their houses.
▶ 1:54:39And it doesn't matter what political party they belong to. And so I think we should have a bipartisan representation of commissioners at both the cpsc and the ftc as soon as possible. Speaker 7: I couldn't agree more. Um, we've talked about the united states supreme court recently gutted nearly a century of precedents that protected independent agencies. And if we're serious about strengthening consumer protection, we need to make sure that agencies have the legal authority but also have sufficient workforce staffing and leadership.
▶ 1:55:09Another question I have and all of you can answer, I know we talked about transparency and fees, and you talked about the convenience of online, and I certainly take advantage of that. When I want to go see a play or a sporting ticket and all of that. My question is, why are the fees so high?
▶ 1:55:27You know, you even though there's transparency and you see that the ticket might cost, let's say $150, but the fees are $60 when everything is online, what's the reason for the fees being so high or the excuse anybody can take a stab, councilman. Speaker 5: I mean, you're referring to ticket fees, right? Yes. Speaker 7: why are they so high? Speaker 5: yeah. So the ticket marketplace is is complex.
▶ 1:55:54There are many stakeholders who whose interests play into the price that you pay. There's the artist who needs to get paid. There's the promoter, there's the venue, there's the ticketing company who all want a cut of that ticket price. And that gets expressed not only in the face value of the ticket, but in all the fees that are paid. We think that the ftc and through this bill, congress has the opportunity to address this through all in pricing, uh, going to a show, seeing a theater performance, it costs what it costs to put on world class entertainment.
▶ 1:56:24And we think that as long as consumers know up front what it's going to cost to get in the door, um, whether that's $100 with $50, $50 in fees, or they want to see that just cost $150 to get in to see that show. Um, that, that's the number that they see.
▶ 1:56:39We think that if all in pricing is mandated as it is through the ftc's junk fee rule, and congress has the opportunity to provide statutory basis for that, um, that consumers will be better off, competition will thrive and you'll have hopefully a little less frustration when you have to go to buy a ticket to see your favorite artist or sports team. Speaker 7: thank you. And I yield back. Speaker 3: I thank the gentlelady. Now recognize Mr. goldman for his five minutes of questioning. Speaker 8: thank you, Mr. chairman, very much. And thanks to all the panelists for being here today. Mr.
▶ 1:57:07Castro, consumer trust depends on clear communication. I'm sorry about that, about online service rules and confidence that those rules are applied fairly and consistently. My bill, the terms act, is intended to provide that transparency and accountability in your testimony. You support those goals, but caution that the bill's notice provision should not prevent platforms from acting quickly against bad actors. How can congress preserve both transparency and the ability to respond to urgent threats?
▶ 1:57:38Speaker 2: thank you for the question. And as you said, I'm very supportive of the bill and just caution that there are cases, for example, where a platform sees a fraudulent actor, where there's a account, they're going to want to act swiftly. I think the bill currently outlines a number of exceptions for when that written notice period doesn't have to occur. The seven day notice period, I think expanding that list to include a more comprehensive set of situations where there might need to be a fast response, would address that concern.
▶ 1:58:06And I think there's a way forward to do that. Speaker 8: right. Thank you so much. Uh, miss winslow, debt related scams and unclear financial products can be a major problem for many families. How can clear disclosure requirements help families make better financial decisions before they are locked into costly services? Speaker 9: thank you so much, congressman. Right now, the advertisements and after this hearing, you may be seeing them on your phone pop up and say, if you have $8,500 in debt, you can settle it for less.
▶ 1:58:35And there are no requirements for what exactly the customer has to know in advance. So they don't know, for example, that it could take four years or that a settlement may never occur at all. There's a number of creditors that don't work with settlement agencies. They don't know that when they're told to stop paying their bills, their credit score is going to decrease. So if they have all that information up front, they may still make the decision to go with a for profit debt settlement company.
▶ 1:59:03And that's fine, but they need to know what they're getting into before they sign on the dotted line. Speaker 8: all right. Thank you so much. And Mr. castro, back to you. Many us online marketplaces invest in ai and other technology to increase the safety of digital commerce and protect consumers. The chinese online marketplaces make similar investments. And if not, why does this pose a competitive disadvantage to us online marketplaces? Speaker 2: so of course, every platform is different.
▶ 1:59:32But overall, what we're seeing is that the efforts made on these foreign online marketplaces, the chinese online marketplaces aren't comparable. Um, the us platforms are taking these issues of counterfeit and dangerous goods incredibly seriously. Um, they want to make sure that a product that a seller is trying to list that's fraudulent, that is detected before it's even listed. So it doesn't get out there to the consumer.
▶ 1:59:57If a product is listed that they're paying a lot of attention to make sure that if they're getting signals back from consumers that something's wrong, that they're notifying that flagging it and taking it down, they're very aggressive in this. In contrast, on the chinese platforms, what we're seeing is, is, you know, they do have policies, but the enforcement is inconsistent. Uh, and the counterfeiters and other scammers that are selling products on these platforms have found ways around it, and they're able to continue to operate around those rules that are created.
▶ 2:00:26And so the level of effort that's being put in there is just a night and day difference. And that's why when we found these products, we could find them consistently across these chinese platforms. We look on the us platforms, you wouldn't see the same types of products. It's not that those fraudulent or counterfeits exist on the american platforms, but not nearly to the same degree. Speaker 8: super. Thank you very much. Again, thanks to all the panelists for being here today. Mr. chairman. Thank you so much. I yield back the balance. Speaker 3: of my time. Thank you very much. Uh, next we have doctor schreier.
▶ 2:00:56She's recognized for five minutes of questioning. Speaker 10: thank you, Mr. chairman. And thank you to our witnesses. I was just jotting down some recent text messages that I've gotten from random numbers. Um, one just said hi. Uh, another one said, hi kim, I miss you. How are you doing? Another said, kim will be replacing roofs in your neighborhood. Can we give you an estimate?
▶ 2:01:24Another kim will be trimming some of your neighbor's trees. We'd like to help with yours too. Um. Another one. I'm sure these sound familiar. You're good to go. Pass is. Bill is overdue. You must pay it by the end of the day. Or will refer this case to the highway patrol. Uh, the schedule payment for your subscription to cyber. Something has expired. Please click here to enter your updated credit card information. And then I recently got one. I still don't even know if it was a scam.
▶ 2:01:50Um, but it said my doctor's name and said that they had recently gotten a prescription refill request and to please click here to answer some questions or clarify something. Um, and this was actually truly the day after I requested a refill. And so I called the doctor's office just to ask them if this was real or scam. And they said they didn't know because they had just switched to a new electronic health record. So I still don't know. So now I'm just ignoring texts of all sort.
▶ 2:02:18Um, so I try not to fall for these and I don't think I'm falling for them, but I'm sure a lot of people do. And thank you for being here. Consumers are just getting an onslaught these days. Um, sometimes it's incessant phone calls. Um, but texts and emails are getting frightening and are very deceptive. And more than half of americans say that they receive some kind of scam attempt every day. I'm probably one of those, um, and that number is especially high for seniors.
▶ 2:02:45Um, with the help of ai, they've got my name. They may have even had my doctor's number, and they may have even known that I made a prescription refill request the day before. Like this is really spooky. And so scammers have gotten really good at impersonating government officials to scare victims into clicking on these links, or sending personal information or even cash to fraudsters. In washington state, scammers were recently impersonating the ftc itself, the very agency that is supposed to be going after them.
▶ 2:03:16And there's there's successful fbi data shows that washington state residents lost nearly $460 million in 2025 to this kind of fraud. And it's, um, it's outrageous. Uh, so I'm glad to see several bills to address this fraud in the hearing today, particularly the strategic task force on scam prevention act. This bill would commission a federal task force to implement a national strategy to cut down on fraud and catch scammers. Uh, question for Mr. castro and Mr.
▶ 2:03:47Brough, can you both touch on this bill? Um, a little bit. And like Mr. castro, you mentioned the need for the task force to prioritize data collection and sharing. Can you talk a little bit more about these criminals who operate the scams and why it's been so hard for the ftc and law enforcement agencies to identify them and crack down on them? Speaker 2: it's a great question. I we might have the same phone number because I have all those same texts or similar texts.
▶ 2:04:13Um, the issue is that, you know, these are again, organized criminal operations. Oftentimes they, they operate using um, services being sold to them specifically to engage in this type of activity. We have to go after, you know, the root cause of this. You know, there's not consequences right now. Um, it's a, you know, if you want to be a criminal, this is a pretty, you know, lucrative area to go into, um, very high reward, very low risk.
▶ 2:04:42And so we have to change that equation. And so, you know, I talk about more data collection. It's partially so we can do more prosecution so we can identify and stop these things. Um, you know, some of these, you know, as I said, we're, we're getting very similar texts. Some of these mobile operating systems now are flagging these and saying likely scams. But at some point, you know, we know these are scams and they can be blocked entirely. And we can feed that back into the network. And we can also, you know, start being more proactive and less reactive.
▶ 2:05:09And that's where, again, it's going to have to take a partnership between industry and government. And we've talked about, you know, the ftc and these other agencies, you know, being the cops on the beat. But it's also industry that I think can play a really important role if we're working together. And so that's why I'm hoping to see, you know, move forward out of this. Speaker 10: and it's been helpful to have apple ask me to report things as, as scams or, or spam. Um, but it's not enough and I really appreciate these efforts. Um, Mr.
▶ 2:05:36Breil, before I have you comment because I'm about to run out of time, just I just want to say that we need a solid ftc and the recent actions of the supreme court, as many people have discussed today, have been outrageous. And if you don't have cops on the beat, you can't do any of this. But Mr. breil, would you like to have the last word about these scammers? Speaker 5: sure. I would just echo what Mr. castro has said, um, and also emphasize the need for coordination with our international partners. These scammers often operate overseas, far from the reach of us law enforcement.
▶ 2:06:06And so any solution to this needs to address that problem as well. Speaker 10: thank you, I yield back. Speaker 11: thank you. The chair now recognizes representative lee for five minutes of questions. Speaker 12: thank you, Mr. chairman. Today's hearing is about a simple principle. Consumers deserve to know who they're buying from, and they deserve confidence that the products arriving on their doorstep are safe.
▶ 2:06:30As more commerce moves online and increasingly through platforms controlled by our foreign adversaries, we must ensure that our consumer protection laws keep pace. I'm pleased that the committee is discussing my draft of stop the fraud act, which gives consumers greater transparency when shopping online marketplaces controlled by foreign adversaries and helps hold those marketplaces accountable when they repeatedly put consumers at risk. Mr.
▶ 2:07:00Castro, I'd like to start by going back to you specifically about the stop fraud act. It seeks to address harmful practices by chinese online retailers based on itis research on this issues. Are there some would you share for us?
▶ 2:07:20Some of the key harms, some of the principal things that you were concerned, the risks that these chinese marketplaces pose to american consumers and why congress should be concerned. Speaker 2: thank you for the question, and thank you also for your leadership on this legislation. Um, in our research, we found that these chinese online platforms are, you know, sometimes turning a blind eye to the piracy and counterfeits being sold on them.
▶ 2:07:46And what's I think so concerning as a consumer is that oftentimes the lister, these listings that you'll see, they use legitimate images, they use legitimate descriptions. So there's no way, as the consumer making the purchase to know that the product is fraudulent until you receive it, and sometimes you receive it, and even then you can't tell that it's a counterfeit because it's a very high quality counterfeit.
▶ 2:08:07And there are significant risks involved because, you know, these are products that it might involve skin care, it might involve medicine, it might involve, you know, toys, or it might just involve, you know, um, hurting the brands and reputations of american companies. And so it's really important that I think, you know, we have platforms that consumers can go and purchase from that they trust. Now, just to emphasize that, I think one of the biggest, uh, most important things here is that we don't have reciprocity in the us.
▶ 2:08:35We have these chinese companies that are selling into the us market, but we don't have us companies selling to the chinese market. And that's a huge issue that we should address as well. And I appreciate your bill does that. Speaker 12: and you just touched on something that I think is is an important distinction. I think many people associate counterfeit products as an intellectual property problem, and they think about the manufacturer as the person that's the injured party. But when you're seeing things like, uh, skin care, medicines, other things, clearly there can be direct physical harm to consumers. Isn't that right?
▶ 2:09:06Speaker 2: absolutely. And we also looked, for example, at some of the recalls that cpsc did. And we saw, you know, they recall a particular product and, you know, amazon and ebay and these other sites would take them down. And then we would go and we'd look on some of these chinese sites, and they had the same products and they hadn't taken them down. And, you know, you, of course, as a consumer, they might not even go to the cpsc site. So all they know is amazon's not selling this, but look, I can get it over here.
▶ 2:09:33And it's a product that's dangerous that, you know, our government has said shouldn't be purchased, but it's still available. And that's a huge problem. Speaker 12: and Mr. hewett, I would like to refer you to the pac act and discuss the pac act briefly from the perspective of companies that serve consumers nationwide. What challenges does the state by state approach to claims for recyclable, reusable and compostable materials create for providing clear, truthful information to consumers?
▶ 2:10:02And why is it important for consumers to have confidence in these claims that they will mean the same thing, regardless of where they are living or located? Uh, would you tell us about that? Speaker 13: yes. Thank you for the question. And with respect to the pac act, it it is seeking to solve a very simple problem.
▶ 2:10:22And that's to eliminate the uncertainty that consumers face when looking at a packaging item and deciding whether or not or making a determination, whether it's recyclable, reusable or compostable, and having a simplified recycling process with standardized definitions going to ultimately reduce the amount of packaging that goes into landfills, it's going to save consumers money. And these definitions and the certainty they provide, are going to provide businesses with the confidence to make domestic investments into our recycling infrastructure.
▶ 2:10:54Speaker 12: thank you, Mr. chairman. I yield back. Speaker 3: I thank the gentlelady. Now recognize Mr. marc veasey for his five minutes of questioning. Speaker 14: uh, thank you, Mr. chairman. A lot of times americans talk about the fact that they want less plastic. Uh, but I think that we all know that that's easier said than done. Uh, of course, we don't want plastic in our rivers and our oceans. Uh, and our, as we go walking along our sidewalks, we want to be able to do everything we can to lessen that.
▶ 2:11:22Uh, and most americans believe that all you have to do is place plastic in a blue bin, uh, after you finish using it. And, and that's going to get recycled. We have the recycling bins here all around the rayburn building and other parts of the capitol. Um, but we know that the recycling rate still remains very low. Uh, and that's one of the reasons why I was pleased to vote for the recycling and composting accountability act. Uh, and the recycling infrastructure access.
▶ 2:11:52Accessibility, accessibility, uh, act to advance our nation's recycling capabilities. Uh, I wanted to ask, uh, Mr. hewitt, uh, this question. Families across my district, they would actually like to have just some practical solutions on how they can play their part.
▶ 2:12:07Um, uh, they don't want to wonder if they're sorting their, their recycling correctly, uh, only to find out that it ends up in a landfill anyway, uh, how can advance recycling help make the recycling system work better for consumers and recover more of the materials they're already trying to recycle? Because a lot of this is just very difficult. Speaker 13: uh, yes, sir. Thank, first of all, thank you for your support of these important pieces of legislation, bipartisan pieces of legislation.
▶ 2:12:36We all want to recycle more. We all want less to go to landfill. And we all want to use and incorporate more recycled content into our products, whether we're consumers or the manufacturing community. Um, but before we can maximize those goals, we need standardized definitions as, as, as the bills do provide, um, with respect to advanced recycling it, it's not a monolithic technology.
▶ 2:12:58Um, it's a collection of technologies that will also ultimately allow us to collect more packaging, like pack like plastics that, that are hard to recycle or often end up in landfills, plastics bags, artificial turf, um, textiles and clothing items as well. These are items that currently are, are not able to be recycled through the existing mechanical recycling infrastructure.
▶ 2:13:24Uh, and that's why advanced recycling and non-mechanical recycling are so important. They play that complementary role and provide that complementary technology to allow us to recycle these, the, these items that are currently ending up in landfills. And I will just quickly add, um, you know, the progressive policy institute issued a report in may of 2026, just just a few short months ago.
▶ 2:13:49And they said that the recycling rates, we have an opportunity to increase recycling rates, um, plastic specifically from the current levels of 19% up to 19 to 23%. So more than doubling them, um, by making the investments and expanding our existing advanced and non-mechanical recycling facilities. So we look forward to the opportunities that these two pieces of legislation present for us. Speaker 14: yeah. No, absolutely.
▶ 2:14:13I know that consumers also want to know that when they, um, put a product, uh, labeled as, as recycling, uh, or made with recycled content that these claims are, are accurate and meaningful to them. Uh, how would establishing clear and standardized national definitions help consumer confusion, uh, and support innovation and recycling, uh, technologies and ultimately keep more plastic out of landfills? Speaker 13: yes. Thank, thank you for the question.
▶ 2:14:42Um, we have nearly ten 000 different recycling jurisdictions across the united states. Um, you can only imagine how many different, uh, instructions consumers are faced with, whether they are at home, at work, um, you know, or visiting their family members. And quite frankly, we've all been faced with that tough decision as to whether or not does this go in the bin? Does this not go in the bin? Um, it isn't a decision that we should have to be faced with on a, on a, on a regular and recurring basis.
▶ 2:15:12And that's where these two bills pack act and a step in. Uh, they would provide clear uniform definitions for basic terms like recyclable, um, compostable, uh, as, as well as reusable and provide the certainty that third party certification comes along with that. Speaker 14: can I ask you this, am I, I mean, I need a brief answer in my closing 30s here, but can this help with clothes in the dumpster?
▶ 2:15:39Because a lot of people don't know what to do with their clothes, and there are so many different pieces of plastics in their clothes. It's a big part of greenhouse gases and we never talk about that. Is there will something like this help with, with or can could be helpful with clothes going in the dumpster, sir? Speaker 13: short answer yes. Uh, non mechanical recycling provides us a pathway to recycle those textiles and clothing items that are currently being discarded into landfills. Speaker 14: yeah. Thank you very much. Thank you, Mr. chairman. Speaker 3: thank you very much. The gentleman yields back.
▶ 2:16:08Now I recognize doctor joyce who waved on the subcommittee. Uh, you're recognized, sir, for five minutes. Speaker 15: thank you, chairman bilirakis, for allowing me to be part of this important hearing. Consumer deception is an ever growing threat to americans. From small towns to large cities, people are at heightened risk of encountering counterfeit products online every minute of every day. Many of these products come from china.
▶ 2:16:36Online retailers controlled by china found ways to make their product appear more credible as they enter the us supply chain. As recently as february of this year, us customs and border patrol officers in pittsburgh seized a massive shipment of counterfeit handbags, jewelry and scarves from china. The items were manufactured to appear as well known brands that are sold in the united states. These products are marketed as authentic, and they would have been valued at over $300,000.
▶ 2:17:08That is 300 zero zero $0 coming out of the pockets of americans, and that is being spent on fake products. These items threaten the american consumer and they violate the law. The chinese marketplace is working overtime right now as we're holding this hearing, to thieve and steal and conceive, to take money out of americans pockets. Mr.
▶ 2:17:33Chairman, I ask unanimous consent to enter this august 2025 report from the information technology and innovation foundation on the prevalence of counterfeit goods from china online stores into the record. Speaker 3: without objection. So ordered. Speaker 15: today I have multiple counterfeit goods with me that were manufactured in china and are available online to consumers on websites that are controlled by china.
▶ 2:18:02Potentially unsafe children's toys like the beloved yoda, made with untested products from china, have been sold online, looking a lot like the yoda that we know and love. But being fooled by americans to purchase these products, a cold medicine that closely resembles what is sold in us retail pharmacies, that packaging only differs slightly, making it difficult for american consumers to discern whether this is fake or whether it's
▶ 2:18:32The real product. As a dermatologist, the presence of counterfeit health products online is deeply alarming to me. If a patient decides to purchase a counterfeit product online and they ultimately receive a chinese manufactured product, that's not only just be ineffective, but it could be harmful to the patient. These probiotic supplements for pets are counterfeit as well, and are fake version of a legitimate product that is made in the united kingdom.
▶ 2:19:02After pet owners purchased the fake product and gave these supplements to their dogs, some of the dogs had to be hospitalized. There is no way to tell what is actually in these products, and american consumers unknowingly purchase these each and every day online. These criminals understand exactly how to target the us supply chain online and force their products into the homes of american families. And I think you all recognize that that threat continues to grow. Mr.
▶ 2:19:32Castro, criminals targeting the us marketplace with counterfeit products manufactured in china are evolving each and every day, and their deceptive practices are appearing more trustworthy to american families, especially when it comes to medicines and other health care products. What specific trends are you noticing? Speaker 2: thank you for the question, and thank you for, um, you know, highlighting the severity of the problem.
▶ 2:19:56One thing we're seeing is that some of these chinese companies are trying to move up the value chain. So not only are they're starting with producing counterfeit goods, trading on the american brands, getting trust, but they're then, you know, improving and eventually trying to sell their own products, um, that are basically replicating and stealing and building off of the ip of these american companies. And so they're not just hurting them in the short term, they're really trying to hurt these businesses in the long term. Speaker 15: Mr.
▶ 2:20:25Castro, in your written testimony, you mentioned the stop the fraud act, which you and I recognize as being very important. Can you explain how a published list of foreign adversary controlled online retailers would be beneficial to the american consumer?
▶ 2:20:40Speaker 2: I think the american consumers need to know what they can trust and what they can't trust, and having that information available to them, that these are certain platforms that the us government has looked at, that national security experts have looked at and deemed harmful will help them make much more informed decisions about where they do their shopping. Speaker 15: as consumers right now are surfing the web and looking at products, do you feel that there is an effective way for the consumer to know who is marketing these products and whether or not they are safe right now.
▶ 2:21:12Speaker 2: I don't think all consumers even know that they're buying from a foreign online marketplace. They see something on tiktok or instagram and they click and buy. Speaker 15: and as this threat of counterfeit products grows in our communities are targeted by these criminals, we in congress must take the necessary steps to protect the consumers and defend their health and protect their safety. Thank you again, Mr. chairman, for allowing me to wave on to this important committee hearing today, and I yield back the remainder. Speaker 3: I thank the gentleman.
▶ 2:21:41I couldn't agree more. Uh, now I recognize Mr. menendez, who's waving on, I believe, to the subcommittee recognize for five minutes of questioning. Speaker 16: thank you, Mr. chairman. I do appreciate the opportunity to wave on to this committee for today's hearing. To many families and seniors in new jersey and across the country are falling victim to increasingly sophisticated scams. Scammers are using ai, voice cloning, deepfakes and other advanced technologies to make their deceptions more convincing and harder to detect than ever before.
▶ 2:22:09These scams are costing americans billions of dollars, wiping out life savings and leaving people uncertain about who they can trust. Scammers don't care about agency jurisdiction, state or county borders, or industry boundaries. They work together, act quickly, and exploit every gap in our processes. Meanwhile, no single federal agency has the authority, resources or tools to confront the full scale of this threat.
▶ 2:22:33The siloed approach leaves victims searching for help and forces law enforcement to play catch up, all while scammers continue to profit. We need a coordinated national effort that brings together federal agencies, state and local law enforcement and the private sector to expose scams sooner, dismantle criminal networks faster and protect people before their hard earned savings are stolen. That's why congresswoman and I introduced the bipartisan strategic task force on scam prevention act.
▶ 2:23:03Our bill would unite relevant stakeholders behind a national strategy to prevent scams and hold criminals accountable, as well as strengthen support for victims, improve public awareness, and give local law enforcement stronger tools to crack down on scams quickly and effectively. Mr. castro, would you agree that scams are no longer isolated incidences, but a rapidly growing threat to families, seniors and businesses across the country? Speaker 2: absolutely. Speaker 16: and a few words. What is driving this growth?
▶ 2:23:32Speaker 2: it's profit opportunity for the criminals. Um, they see opportunities to use the latest technology and use it to go after unwitting victims. Speaker 16: um thank you and Mr. brough, um, just briefly, how are these scams impacting american families. Speaker 5: um, thank you, congressman menendez, and thank you for championing this bill. Um, beyond the financial cost, which is huge. These scams are taking a toll on american families psychologically, emotionally.
▶ 2:24:02We hear from consumers every day who are struggling with this, struggling with family members who are victims of scams that they just don't think they can stop. And unfortunately, in far too many instances, we've actually seen consumers who have been so deep into these scams that they've actually committed self-harm or even suicide when they find out they've been victims of fraud. Speaker 16: because it's generally a vulnerable population that people are trying to target. That's why we talk about seniors, right? People who are newer to the digital age may be more susceptible to these scams.
▶ 2:24:29But when I ask this question to different industries, they all say the same thing is that no one is untouched in this moment. Would you agree with that? Speaker 5: I would. Speaker 16: thank you. Uh, miss winslow, scammers often operate across international lines and through multiple platforms. In a few words, how would stronger coordination among federal agencies, state attorneys general, local law enforcement, and industry help identify and stop scams sooner?
▶ 2:24:56Speaker 9: coordinated coordination is essential, particularly when we're talking about an industry like the vehicle finance industry that operates internationally as well as across state lines. So in an easy example, title washing, that's where you can manipulate or clean a title. And so people can't tell who really owns that title. Uh, and a lot of states, there's still paper titles. And so it's easy to take a title from one state and move it to another one.
▶ 2:25:21It's so unique coordination there between dmvs, between state ags, and of course, dot, uh, doj and the ftc. So we work with I represent the auto lenders, but the auto dealers obviously are involved in the manufacturers as well. So a strong federal task force on that is the one thing that could unite all those players. Speaker 16: it's a more efficient use of the resources that do exist. Right.
▶ 2:25:44Because if each if each entity is trying to grapple with this on their own, right, you're not having the maximum use of everyone's talents, resources, etc. When the volume of scams and sophistication is just rapidly increasing on a daily basis, um, a scammers become more organized and technologically advanced. The federal government must take a more coordinated approach to combat to combating scams. Every day we fail to act. More american families lose their savings, their peace of mind, and their trust that someone is looking out for them. Mr.
▶ 2:26:12How could the strategic task force on scam prevention act help turn today's fragmented response into a coordinated national effort that stops scammers faster and makes it easier for victims to get help? Speaker 5: uh, thank you, congressman. Uh, if a bill became law, it would put the give us, for the first time, a national strategy that cut across all the different silos and brought together all of the agencies and partners who have the data that we need to better protect consumers.
▶ 2:26:41And importantly, it would also allow consumers some more peace of mind and hopefully some compensation for the victims who have been scammed far too much. Speaker 16: I appreciate that, and I appreciate the chairman, again, for allowing me to wave on. I appreciate the bipartisan work to advance legislation that's going to protect all our american families. I yield back. Speaker 3: I thank the gentleman. Now, uh, last but certainly not least, my good friend, Mr. weber from the state of texas, you're recognized for five minutes of questioning. Thank you, Mr.
▶ 2:27:08Chairman, for allowing me to wave on in saving the best for last. I would like to thank the subcommittee for that very opportunity. H.r. 6832. The packaging and claims knowledge or pack act. I would also like to thank the committee staff who have been working diligently with our office for several months to finalize this language and provisions within the package act as it stands today.
▶ 2:27:30Finally, I would like to thank american and the larger coalition of food manufacturers, packaging associations and consumer advocacy organizations for their continued support of the pack act and its goal to create a consistent and voluntary federal framework for environmental claims on various products. I like to say. Suffice it to say, we might be able to actually package a better life for our kids and our grandkids in a safer future for them.
▶ 2:27:59Uh, let me come to you, Mr. hewitt, if I can. Uh, one of the primary issues we are seeing with respect to recycling and environmental claims is consumer confusion. Uh, the lack of a standardized labeling labeling regimen leaves consumers less informed when making purchasing decisions. And confused as we've all stood over two different bins, we've talked about that and tried to decide what to do with this particular piece of product. As I always like to say, it shouldn't take a lawyer to have to figure out a recycling bin.
▶ 2:28:28So if we're able to put those clear definitions for recyclable, compostable, and yes, reusable packaging into federal law, wouldn't that be better than relying solely on nonbinding guidance? Would that help consumers in our I say my district, but actually across the country. You agree? Speaker 13: yes, sir, I would agree.
▶ 2:28:54And thank you for bringing this important piece of legislation and your support of rdma. But yes, minimizing consumer confusion is the least we can do. We can accomplish that through your bill with standardized definitions, and then ensuring that consumers are protected with third party certification that the pack act provides. Speaker 3: and actually get a better, like I said in my opening comments, a better environment for, for our our children. You know, I happen to have three kids, eight grandkids and two great grandchildren.
▶ 2:29:24So it's important for me and absolutely. And I'm gonna stay with you, mister. You if I can. Another one of the current problems with environmental claims, I think we all recognize, is the patchwork of state regulations. And they very definitely vary widely depending on where you are. And of course, we're talking about california's lawmakers who enacted sb 343, which for the life of me, I don't understand, prohibits the use of the chasing arrows symbol.
▶ 2:29:53I, you know, I, I, they used to have that in cowboys and, you know, indians, country westerns back in the day, I guess they all had arrow symbols. That's a joke. Y'all can laugh at that. Uh, but any, any other, any recyclability claim, unless the product meets specific criteria determined solely by one state, california. I know there's been some legal action on it. Okay. Um, can you go further and into the how policies like bills being presented in california would hurt?
▶ 2:30:22And I would say even not just california, because there's still that confusion, not only consumers in california, but in the long run, a direct impact of the increased burdens it placed. Having been in business over 35 years, businesses don't need those kinds of uncertainty impacts on businesses. Would you agree? How can it change?
▶ 2:30:42Speaker 13: well, I would agree, and I would note, just with respects to california, that just last week, the court issued the preliminary injunction finding that large portions of that the definitions and the mandates that they prescribed were unconstitutionally vague. So, you know, we again, um, had a patchwork now cast into more uncertainty as, as we navigate the, the legal process with respect to that one state law, but it's not one state, it's dozens. Um, and that is part of the problem.
▶ 2:31:10Companies must navigate these conflicting definitions. Consumers must navigate these conflicting definitions across, like I said earlier, nearly 10,000 different, you know, recycling jurisdictions. And so having this certainty with standardized definitions, with this, with, with third party, uh, accounting, as well as third party verification that goes along with it is ultimately good for consumers, it's good for businesses. Speaker 3: I think it is too. And I think I've got 30s left.
▶ 2:31:39I think that's good for a standard voluntary packaging like we're talking about is a good thing. Do you agree, miss winslow? A standard voluntary. Speaker 9: uh, I can't speak for the association, but me personally sure. Speaker 3: is it? You know, you say that. Yes, sir. A good standard policies would be a good thing. Well. Speaker 5: congressman, I think we support bills like california's that set a high bar in this space. Uh. Speaker 3: I want to take that as a no, Mr. castro. Speaker 2: yes. I think in federal preemption here is important. Thank you.
▶ 2:32:09Speaker 3: Mr. brady. I thank you. Wrap voted. Mr. chairman, I yield back. I appreciate it very much. Thank you sir. All right. I want to give uh, I think we're finished with the with the questioning, but I want to give, uh, our ranking member an opportunity to, to say a couple words she requested. And I gladly consented. Yeah. Speaker 17: thank you very much, Mr. chairman. It's been an important discussion today.
▶ 2:32:36I think that we are finding people who are being scammed, who are getting misinformation, who are being hurt, families that are actually seeing some of their children and their and, and adults as well who are getting misinformation.
▶ 2:33:05And it's really important that this be investigated so that we know what the scams that are out there are and how we can protect people from the kinds of dangers that are, that are there.
▶ 2:33:28Um, I, I, I'm very worried about, um, some of the people who are not sure about what is true, what has been told to them that are things that are not true. And families, kids, individuals who are being harmed as we move along.
▶ 2:33:54Um, and that's just, I think so incredibly important and that we have to do better here, that there are people who are in good faith trying to do best for themselves, their, their themselves and their families and their kids. And it's not coming forward for them.
▶ 2:34:23So I just, uh, am hoping that we're going to do better than we have done. And, uh, make sure that we make all of these questions that are asked safer and that we make sure that all of our families are getting the best that they need to know and that can protect themselves and their kids.
▶ 2:34:53So we have, uh, a lot of, we have a lot of work to do. Thank you. Speaker 3: we're very good and well said. I just feel like, again, there's a lot of misrepresentation, uh, on the internet, uh, when you purchase a product, uh, I believe that the consumer has a right to know where it's coming from. Uh, so anyway, I thought this was a very productive hearing.
▶ 2:35:22Uh, and, uh, we'll continue to work on this issue. So I appreciate the, the witnesses for being here. Thanks for all the information. You've given us very valuable information. And, uh, we'll move forward with, uh, these bills. Uh, I'd like to thank our witnesses for being here today. Members have additional, uh, if they have additional written questions. And I know there are some, I'll remind members that they have ten business days to submit questions.
▶ 2:35:51For the record, I ask the witness to respond to the questions promptly. Members should, uh, submit their questions by the close of business on august 5th. And I'll ask unanimous consent that the documents on the staff for the documents on the staff list, and there are quite a few be submitted for the record. So without objection, uh, we're going to do that. So ordered.
▶ 2:36:19And this committee, without objection, the subcommittee is adjourned. I thank you all.