Congress scowls at come-ons to the elderly

An envelope marked ``National Committee Social Security and Medicare Documents Enclosed'' slips through the mail slot. Inside, beneath what looks like the Great Seal of the United States (though the eagle is looking the other way), comes the message that if you don't act quickly, your social security payments will be in jeopardy. A $10 contribution will help pay for lobbying efforts to preserve your benefits.

Another letter offers you information about free or inexpensive insurance to supplement your medicare benefits. To get more information, simply fill out the form below. Days later, an insurance salesman arrives on your doorstep.

The elderly are getting a lot of this mail these days.

On the whole, it's not fraudulent mail, ``not winnable in court'' under current state and federal laws, according to an assistant US attorney.

But Congress and state organizations are looking for ways to curb what they call misleading or deceptive mailings to senior citizens. At best, these mailings use scare tactics to fund multimillion-dollar lobbying organizations that often do very little lobbying. At worst, they lead people to give up their life savings for risky investments or health insurance they don't really need.

Congress, for example, is taking aim at the National Committee to Preserve Social Security and Medicare, which sent the letter described above to millions of Americans. The group's president, James Roosevelt, is the son of social security's founder. Yesterday Mr. Roosevelt testified before the House Subcommittee on Social Security, which believes the organization is squandering millions of dollars that the elderly cannot afford to give. The subcommittee says that of the $30 million raised last year, 80 percent was spent on fund raising, with about 11 percent going into lobbying and legal efforts.

Roosevelt says that 15 percent goes to fund raising, 65 percent to legislative advocacy and educational mailings, and 20 percent on administrative costs. The group says it fills a need as defender of the elderly, pointing to its role in helping oppose congressional candidates who have been ``anti-senior.'' Through preaddressed post cards to members, the group got 120,000 senior citizens involved in the November elections. Public-affairs director Jack McDavitt says he believes such participation ``did turn some of the Senate races,'' including those in Alabama, Georgia, and South Carolina.

Unconvinced, Congress is considering ways to alter mail solicitations from Roosevelt's group and others like it. Many on Capitol Hill worry that a bill introduced last month would restrict legitimate businesses.

States are tackling a problem that is even more devastating to an elderly person's personal finances: scaring people into buying investments, particularly health insurance, that they don't need.

Anah Roberts, a health insurance counselor in Santa Rosa, Calif., tells of a woman who received a letter offering information about supplemental health insurance. She filled out the card and sent it back. But instead of receiving a booklet, she found a salesman from Chernecki Insurance Services (which changed its name to Fountain Grove Insurance in the wake of bad publicity late last year) on her doorstep.

Although she already had a Blue Cross policy and a long-term care policy, he told her ``she could never get enough insurance,'' Ms. Roberts says. He sold her $2,905 worth of insurance she didn't need.

This case is at the low end of the spectrum, Roberts says. She is working with two couples who paid $11,000 and $13,000 in insurance packages that gave them little or no coverage over what they already had.

The problem is mushrooming, says Herschel Elkins, an assistant US attorney in Los Angeles, because of ``cold-lead mailers.'' These are groups that send senior citizens letters offering information about, say, supplemental health insurance, if the person will fill out some personal information.

The mailings look official, often having a Washington, D.C., return address. Three groups, for example - American Health Services, Consumer Referrals Service Center, and Consumer Support Services - have the same return address in Washington, right down to the suite number. But the Washington office simply forwards the letters to a marketing organization, often based in Dallas.

That group then rents the list of respondents to insurance agents or other people who try to sell investments to the elderly. The lists generally rent for an average of $8 to $9 name. (Lists of people who have fallen for risky investments in the past command higher prices, up to $100 a name, Mr. Elkins says.) The result, say members of the California Legislature, is that thousands of people are being frightened into buying investments they can't afford and don't need.

Now California, as well as Washington, Wisconsin, and Florida, is trying to crack down. Late last year, California's Department of Insurance issued cease-and-desist orders on 25 cold-lead companies. One company merely changed its name and the color of its stationery and sent out the same letter.

But taking stiff action against such companies, or the people who use the lists, could impinge on free speech. Notes Patricia Dilley, staff director of the House Subcommittee on Social Security, ``I doubt we'll amend the First Amendment.''

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