US and 12 nations join to fight Net consumer fraud

by Todd R. Weiss

April 25, 2001 —

Joining together to fight international consumer fraud over the Internet, 12 nations
are joining the U.S. in an online pilot project to gather and share cross-border
e-commerce complaints.

In an announcement yesterday, the U.S. Federal Trade Commission (FTC), which
will lead the program, said the effort is being made to protect consumers and
to maintain their confidence in doing business online.

The project, "econsumer.gov", is being undertaken by the U.S. and
Australia, Canada, Denmark, Finland, Hungary, Mexico, New Zealand, Norway, South
Korea, Sweden, Switzerland and the U.K.

FTC Chairman Robert Pitofsky said in a statement that the Internet provides
global e-commerce opportunities and challenges, while giving consumers access
to goods, services and information.

"But the borderless nature of the marketplace can also frustrate governments'
ability to protect consumers," Pitofsky said. "Econsumer.gov will
provide a new tool to allow countries to work together to make the Internet
safer for consumers across the globe."

FTC spokesman Eric London said other countries will be invited to join the effort
as part of the 24-month pilot project.

In addition to collecting complaint information, the initiative provides a structure
for participating countries to respond and take enforcement actions against
violators within their borders, he said.

"That's the nub of the problem with the Internet economy, the lack of jurisdiction"
today, London said. "This is a way to solve that problem."

Two Web sites will be created: a multilingual site for public access (www.econsumer.gov),
where fraud can be researched and reported using an online complaint form, and
another that is password-protected for government use.

The public-access site will also have general information about consumer protection
and contact information for consumer protection authorities.

All incoming complaints will be entered into the FTC's existing Consumer Sentinel
network (www.consumer.gov/sentinel/), an automated database of consumer complaints
and other investigatory information. The FTC will maintain control over the
public Web site and data and will host and maintain the site.

Jean Ann Fox, director of consumer protection at the Washington-based Consumer
Federation of America, called the project "an excellent step toward protecting
consumers against fraud in e-commerce."

"If they don't get a handle on consumer fraud, it will tarnish the future
of e-commerce," Fox said.

Marc Rotenberg, executive director of the Electronic Privacy Information Center
in Washington, said the idea is good in principal but that public oversight
is needed to prevent governments from going overboard in their attempts to control
what happens online. That could be done through consumer advisory boards and
mandated reporting requirements, he said.

"There is a need to establish enforcement efforts across international
borders" to protect consumers, Rotenberg said. "Also, though, there
needs to be public accountability as governments watch the Internet."

Computerworld