00:00And now call on Ranking Member Senator Durbin for his opening statement.
00:05Thanks, Chairman Grassley, for holding this hearing to look into large-scale theft of retail products
00:11that are then sold to unsuspecting consumers, often on online marketplaces.
00:17This is not a new problem.
00:19Back in 2008, I met with Home Depot.
00:22They told me the story about a drill that they sold exclusively
00:26that was being found for sale new in the box and at a discount by sellers online.
00:32It had to have been stolen some part of the manufacturing or sales process.
00:37And it wasn't just tools.
00:39This was and still is happening in all kinds of products, all kinds of stores,
00:43including cosmetics, electronics, clothes, over-the-counter drugs, toys,
00:48and as the chairman said, food and other things.
00:51I remember when the CEO of Walgreens came in to see me based out of Illinois,
00:56and I said, now, why do I have to call a clerk at your drugstore
01:00when I want to buy underarm deodorant so they can unlock the shelf
01:04and I can buy the underarm deodorant?
01:06Are these so precious that they have to have special surveillance and guarding?
01:13And he said, the fact of the matter is,
01:15retail theft takes these things in volume and sells them in volume.
01:20And, of course, it's not the individual that's likely to be the one to sell it.
01:23And it's some sort of an operation, which we're going to talk about today.
01:27This is a problem that affects everybody.
01:29Higher prices, lost jobs, and lost community investment
01:32when shops that can't keep up with the rising cost of theft
01:35are forced to close their doors.
01:38I've worked on this issue for a long time.
01:41As chairman of the committee years ago,
01:42I held a hearing on cleaning up online marketplace
01:45to protect consumers from stolen, counterfeit, and unsafe goods.
01:50Not long after Congress passed my Informed Consumers Act,
01:53bipartisan bill I introduced with Senator Bill Cassidy,
01:57Republican of Louisiana.
01:59This law requires online marketplaces to collect, verify,
02:02and disclose information about high-volume sellers
02:05who offer new or unused consumer products for sale on the platform.
02:10Remember that Home Depot drill that I talked to you about earlier?
02:12When they found out that it was being sold online
02:15and clearly had been stolen,
02:17they contacted the online operation and said,
02:21this is a stolen product, there's no doubt about it.
02:23And the online operation said, so what?
02:25That's not our responsibility, that's somebody else's.
02:28Well, this bill, the Informed bill, changed that.
02:31The Informed Consumers Act is guided by three principles,
02:35verification, transparency, and accountability.
02:38If someone's going to sell a large volume of goods online
02:41on a marketplace, they should tell the marketplace who they are.
02:45Home Depot couldn't figure out who was selling these drills.
02:48The online operation wouldn't identify their user.
02:53The seller should be verified.
02:55Second, if a product sold online turns out to be a fake,
02:58stolen, or dangerous,
02:59consumers should be able to report it and find the seller.
03:02And the marketplace must ensure the seller can't just disappear
03:06and pop up later with a new account name.
03:09Third, if a consumer orders a product from one seller online,
03:12and the order is actually filled by another company,
03:15the marketplace should let the consumer know.
03:17I'm sad to report to you that despite two years
03:20that we passed this bill,
03:22the Federal Trade Commission has literally dropped the ball
03:25on enforcing the Informed Consumer Act.
03:27It's been more than two years since this law went in effect.
03:30The Federal Trade Commission hasn't even promulgated regulations
03:35in two years to implement it.
03:37The FTC has received hundreds of complaints
03:39regarding violations of this law,
03:41but how many enforcement actions has this agency taken?
03:45None. Zero.
03:47This is unacceptable, and it must change.
03:49The Federal Trade Commission has to step up
03:51and enforce the law that we passed and the President signed.
03:55In the meantime, state and local governments
03:57have stepped up their efforts.
03:58In May, in my home state of Illinois,
04:00Cook County Regional Organized Crime Task Force
04:03brought together more than 100 law enforcement agencies
04:06and 30 major retailers for a crackdown
04:09that resulted in hundreds of arrests across 28 states.
04:13That is a success we must build on.
04:16Federal law enforcement also has an important role to play,
04:20but we must acknowledge this administration
04:22has announced different priorities.
04:24Instead of combating crimes like I described,
04:28the Trump administration has diverted critical resources
04:31toward the President's mass deportation agenda.
04:35Homeland Security Investigations, better known as HSI,
04:38plays a leading role in combating criminal networks
04:41and organized crime, including organized retail theft.
04:44But under this administration,
04:46HSI has been diverted toward rounding up immigrants,
04:49many of whom pose no threat whatsoever to this country.
04:52According to one recent report, and I quote,
04:56HSI supervisors have waived agents off new cases
04:59so they have more time to make immigration enforcement arrests.
05:03One veteran agent said,
05:05no drug cases, no human trafficking,
05:08no child exploitation.
05:09It's infuriating.
05:11Instead, he said, HSI is, quote,
05:13arresting gardeners.
05:15These are not the actions of an administration
05:17serious about combating crime.
05:19Diverting federal resources endangers Americans
05:22and leaves us less equipped to target and disrupt criminals
05:25like those in organized retail theft.
05:29We have to have an open and honest discussion
05:31about the role of the federal government
05:33in reducing organized retail crime.
05:35I look forward to that dialogue today.
05:37Thank you, Mr. Chairman.
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