FTC Cross-Border Fraud Workshop to Address Trends, Partnerships

Cross-border fraud, in the form of advance-fee loan schemes, prize draws and sweepstakes, and foreign money offers, is emerging as a serious consumer problem. To discuss current trends and explore ways the public and private sectors can work together cooperatively to combat cross-border fraud, the Federal Trade Commission will bring together representatives from the U.S. and abroad for a workshop on February 19 and 20, 2003. Participants from Australia, Canada, Germany, the United Kingdom, the Organisation for Economic Cooperation and Development (OECD), and the International Consumer Protection and Enforcement Network (ICPEN) will join American law enforcement officials, business representatives, and consumer advocates on a variety of panels. The FTC also will release its 2002 report, Cross-Border Fraud Trends, compiled from complaints received by the FTC's Consumer Sentinel database.

The two-day workshop will emphasize the need for strong, ongoing partnerships between the public and private sectors to combat cross-border fraud effectively. "Our 2002 complaint statistics and our cases suggest that cross-border fraud is on the rise," said FTC Chairman Timothy J. Muris. He explained that part of the increase in complaints is due to the FTC's global outreach efforts and the increase in contributors to Consumer Sentinel. But he stressed that the numbers underscored the timeliness of public/private sector cooperation. "By leveraging the resources and experience of both sectors, we can more effectively combat cross-border fraud," Muris said.

The workshop will feature panels focusing on the role of a variety of private sector groups - including financial institutions, credit card companies, ACH processors, money transmitters, commercial mail receiving agencies, courier services, industry associations, Internet Service Providers, and domain registrars - in combating cross-border fraud.

• What are the main cross-border fraud issues facing businesses and consumers?
• What challenges does the FTC face in pursuing cross-border fraud cases and recovering money for defrauded consumers, and how can the private sector assist in meeting these challenges?
• What are some practical mechanisms that the private sector can use to assist the FTC in preventing fraud, identifying and locating the perpetrators, and tracking down assets?
• What are the main legal and other obstacles to such cooperation?

The new FTC cross-border fraud trends report shows that cross-border fraud complaints by U.S. consumers jumped from 13,905 in 2001 to 24,213 in 2002, and have risen from 12 to 14 percent of all non-identity theft-related fraud complaints. According to Muris, the nature of the complaints also is changing. "When we first started looking at statistics on cross-border fraud, most of the complaints focused on telemarketing schemes crossing the U.S.-Canada border. While telemarketing schemes are still widespread, complaints about cross-border Internet-related schemes, located all over the world, also have grown," he said. U.S. consumers have lodged fraud-related complaints against operators worldwide.

"As technology advances, we see a tremendous opportunity for growth of the consumer-based global economy. But we also are witnessing a rapid growth in cross-border fraud. We need to develop new ways to stop frauds that harm consumers across borders and undermine consumer confidence. Creating and strengthening public/private partnerships is an important part of this effort," said FTC Commissioner Mozelle W. Thompson, who currently chairs the OECD's Committee on Consumer Policy. The FTC is leading the world in this area through participation in the International Consumer Protection and Enforcement Network (ICPEN) and the OECD, which presently is considering a recommendation on governmental cooperation to protect consumers from fraudulent and deceptive commercial practices.

The workshop has been organized as part of the FTC's Five-Point Plan for Fighting Cross-Border Fraud, announced in October 2002. It marks the first comprehensive effort to address these issues in a national forum. It is open to the public and there is no attendance fee. The agenda, including a list of scheduled panelists and their affiliations, is available at http://www.ftc.gov/bcp/workshops/crossborder/.

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.