Tech Industry

Governments target online global fraud

A coalition of government-run consumer-protection agencies unveils a new Web site dedicated to helping stop cross-border online fraud.

A coalition of government-run consumer-protection agencies unveiled a new Web site Tuesday dedicated to helping stop cross-border online fraud.

The Web site will allow consumers to report fraudulent activity by foreign merchants to government officials in the merchants' home countries. Thirteen countries, including the United States, are participating in the Web site.

"We're seeing enough cross-border fraud to know that this will be a very helpful tool," said Mozelle Thompson, a commissioner on the U.S. Federal Trade Commission. "This will send a clear message to those unscrupulous parts of the public that they can't hide from us just because we're on different sides of a border."

The new Web site is the latest action taken by the FTC to counter online fraud. Last fall, the agency set up a joint task force with other state, federal and foreign consumer-protection groups to crack down on a top-10 list of online scams. Among the activities targeted: health care fraud and pyramid and travel scams.

Last spring, after seeing the number of fraud complaints concerning online auctions skyrocket, the agency announced a coordinated effort with the Department of Justice, the U.S. Postal Inspection Service, and state and local law enforcement agencies to combat auction fraud. The effort involved bringing charges against alleged auction scammers and educating consumers and law enforcement agencies about auction fraud.

The number of online fraud complaints reported to the FTC increased from 22,009 in 1999 to 25,469 last year. The agency does not have an estimate of what portion of those complaints involved international transactions, Thompson said. Part of the rationale behind the new Web site is to collect data on cross-border online fraud.

Through the Web site, consumers can fill out an online complaint form and find information on consumer-protection laws in the participating countries. The site also provides contact information for each of the participating government agencies.

Such agencies will share information filed to the site among each other and with law enforcement officials in the participating countries. The government agencies will pursue the complaints according to each country's laws, Thompson said.

Although consumer-protection agencies from the United Kingdom, Sweden and Canada are participating in the project, noticeably absent are representatives from countries such Japan, Germany and France. Thompson said he expects other countries to become involved with the project and that agencies from other countries are going through the process of getting approval to participate.