Bass Legislation to Protect Consumers Passes House
WASHINGTON, Oct. 26–In response to reports of charity fraud and gas gouging in the wake of Hurricanes Katrina and Rita, the House has passed legislation sponsored by Rep. Charles Bass (R-N.H.) meant to protect consumers during times of national emergency.
The American Spirit Fraud Prevention Act, which Bass introduced for the third time since 2001, would double the penalties for anyone committing fraud during a time of national crisis.
“The primary purpose of this bill will be to deter fake charities,” Bass said in an interview. Earlier, in a news release, he said: “Americans have always opened their hearts and their wallets over and over again. This bill takes steps to ensure that this generosity is not taken advantage of by petty crooks.”
The bill, which Bass originally introduced after reports of suspicious charity solicitations in the wake of the Sept. 11, 2001 terrorist attacks, previously passed twice in the House by overwhelming margins but was shelved in the Senate. Bass hopes that this time the Senate will approve the measure.
“My understanding is that this time, there is a consensus for the bill,” he said.
This year, Bass has enlisted the aid of Sen. John Sununu (R-N.H.), who says he will help shepherd the bill through the Senate Commerce, Science and Transportation Committee, on which he sits.
“Congress must do what it can to offer protection, and Congressman Bass’s legislation makes sense, particularly at this time,” Sununu said in a statement to the Union leader. “Now that his legislation has passed the House, I look forward to bringing this to the attention of my Senate colleagues and pushing for action this year.”
The bill would empower the Federal Trade Commission to double civil penalties for committing fraud or price manipulation such as gas gouging, during a declared national emergency period. Each violation would carry a penalty of up to $22,000.
Robert Schomphe of the New Hampshire Better Business Bureau said that Granite Staters have been reporting several “advance fee loan” schemes that have also been linked to the victimization of hurricane victims.
“They find people on the Internet and offer them loans, regardless of credit,” he said in an interview. “But they want an advance fee for the loan or a certain amount of money as insurance against the loan. It looks very slick, but the kicker is that the money must be sent by Western Union to Canada.”
Schomphe said that Bass’ bill made sense and hoped it would be successful, but cautioned that many charity and Internet scammers will simply relocate and start over.
“If you shut them down in Canada, they just move somewhere else,” he said.
Bass said he realized the limitations of any effort to completely prevent fraud during a time of national distress but said the bill provides for far stiffer penalties than the current system and that $22,000 per offense will enough to bankrupt some fraud perpetrators.
“It is a pretty big deterrent,” he said. “Will this bill solve the problem of all people who prey on Americans’ charity? No. But it is certainly a better deterrent than we have now.”
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