FTC Joins International Effort Against Cross-Border Web Fraud

Twenty-nine members of the Organization for Economic Cooperation and Development (OCED), including the United States, have agreed on guidelines to protect consumers from cross-border fraud, particularly scams involving the Internet. The guidelines set broad principles for international cooperation and specific provisions covering notification, information sharing, and assistance with investigations.

They also cover issues regarding the authority of consumer protection enforcement agencies, invite private-sector co-operation, and set the stage for future work on the issue of consumer redress.

The international agreement does not mandate the signers of the pact implement the new guidelines, but recommends participating countries pass laws based on the guidelines. Last week, the Federal Trade Commission (FTC) asked Congress for additional authority to prosecute cross-border fraud and the European Union has indicated it will require its member nations to adopt the OCED guidelines.

Nigeria, a notorious haven for Web scammers, is not a member of the OCED.

“Cross-border fraud, perpetrated through telemarketing, Web sites, and spam, harms consumers and consumer confidence in the global marketplace,” FTC Commissioner Mozelle Thompson said Tuesday. “The OECD guidelines announced today reflect an international commitment by consumer protection law enforcement agencies to work together to combat these schemes.”

Cross-border fraud operators strike quickly, victimize thousands of consumers in a short period of time and then disappear along with the proceeds of their frauds. Scammers are often able to escape prosecution in many cases because of the limited ability of law enforcement agencies to pursue them across national boundaries or share evidence with other national agencies.

In addition, court-ordered remedies prohibiting fraud operators from engaging in certain conduct generally are ineffective across borders.

Thompson said the FTC had recently established a division within its Bureau of Consumer Protection specifically designed to coordinate international anti-fraud efforts.

Many U.S. international partners, including Canada, Australia, and the United Kingdom currently have access to the thousands of consumer fraud complaints in the FTC’s Sentinel database, and that the agency routinely shares investigative information with its overseas partners.

“Fraud against U.S. consumers is more and more frequently being committed by individuals outside our nation’s borders,” said FTC Chairman Timothy J. Muris. “The FTC is dedicated to continuing to work diligently to protect consumers, and the guidelines announced today will improve our ability to coordinate with our international law enforcement partners to stop cross-border scams. This is an important first step to establishing an integrated global anti-fraud enforcement strategy.”