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Net fraud on FTC's hit list

Fighting fraud, including Internet scams, remains one of the Federal Trade Commission's highest priorities, the agency says in a new report.

Fighting fraud, including Internet scams, remains one of the Federal Trade Commission's highest priorities, the agency says in a newly released report.

The report, "Anticipating the 21st Century," summarizes the agency's actions of the past year and its game plan for next year. The agency also continues to study how to protect consumer's online privacy, a hot topic of late.

"Participants at [hearings held in November] expressed concern that the Internet may be a fertile ground for fraud, and that without consumer protection rules online, consumers might stay from this newest marketplace," the report says. "The FTC is actively monitoring the Internet for illegal practices, and last year brought some 15 actions to stop online scams.

Among others, the report cites the Fortuna Alliance and Audiotex Connection. In the former, the FTC brought to a halt a pyramid scheme in which more than 15,000 consumers lost more than $11 million. In the latter the agency stopped a "complex scam in which consumers who downloaded information from defendants' Web sites unknowingly were disconnected from their local Internet service providers and connected to another provider at costly international phone rates."

The FTC also sponsored SurfDay, where the FTC and other agencies educated online entrepreneurs about the difference between legitimate marketing tactics and illegal pyramids.

The report says that those who attended last November's hearing expressed concerns about online privacy. A workshop was held in June 1996 and another is set for June 1997. A report on the first workshop was issued in December 1996.

Some consumers think the agency should do more to combat online fraud and protect consumer's privacy. The report responds: "As the FTC's workload has grown through the 1990s, the FTC's resources have remained essentially flat. The agency has responded by increasing its productivity, leveraging its resources through partnerships, and eliminating or streamlining its rules, regulations, and procedures."