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Homeland Security

Washington File

17 June 2003

U.S. Joins OECD Partners in Fighting Cross-Border Fraud

(Guidelines establish framework for cooperation, FTC says) (930)
The United States has joined with other industrialized countries to
enhance cross-border cooperation against consumer fraud, the Federal
Trade Commission (FTC) says.
A June 17 FTC press release describes guidelines for such cooperation
just released by the Organization for Economic Cooperation and
Development (OECD), a group of 30 wealthy countries.
"Cross-border fraud, perpetrated through telemarketing, Web sites, and
spam, harms consumers and consumer confidence in the global
marketplace," Commissioner Mozelle Thompson said. "The OECD guidelines
announced today reflect an international commitment by consumer
protection law enforcement agencies to work together to combat these
schemes."
The guidelines define cross-border fraudulent practices, present
principles for cross-border cooperation and press OECD member
countries to find ways to redress consumers harmed by cross-border
fraud.
Following is the text of the press release:
(begin text)
June 17, 2003
FTC Joins International Law Enforcers in Announcing Newly Developed
Cross-Border Fraud Guidelines
Guidelines Will Enhance Global Efforts to Combat Growing Cross-border
Fraud
Joined at Federal Trade Commission headquarters in Washington, D.C.,
today by Herwig Schlögl, Deputy Secretary General of the Organisation
for Economic Cooperation and Development (OECD), and FTC Chairman
Timothy J. Muris, FTC Commissioner Mozelle W. Thompson, Chair of the
OECD's Committee on Consumer Policy, announced new Guidelines that
outline a framework for international cooperation in the effort to
combat the growing problem of cross-border fraud. At the same time,
OECD members and other international law enforcement officials held
round-table briefings on the Guidelines in Paris and Canberra,
Australia.
The Guidelines, which can be found on the OECD's Web site at
www.oecd.org/sti/crossborderfraud and as a link to this press release,
are designed to help governments work more effectively and efficiently
to combat the increasing incidence of cross-border fraud. They contain
broad principles regarding international law enforcement coordination,
as well as specific information on how countries can best work
together during the course of joint investigations. They also detail
the authority of international consumer protection agencies worldwide,
invite private-sector cooperation in anti-fraud efforts, and set the
stage for future discussions regarding consumer redress.
"Cross-border fraud, perpetrated through telemarketing, Web sites, and
spam, harms consumers and consumer confidence in the global
marketplace," Commissioner Thompson said today. "The OECD guidelines
announced today reflect an international commitment by consumer
protection law enforcement agencies to work together to combat these
schemes."
"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, and the FTC appreciates the OECD's efforts to put the
Guidelines into place."
Commissioner Thompson noted that the FTC remains on the forefront of
international consumer fraud prevention, having recently established a
division within its Bureau of Consumer Protection specifically
designed to coordinate such efforts. In addition, he said, in its
reauthorization hearings before Congress this year, the FTC suggested
a variety of program enhancements designed to improve the agency's
ability to coordinate its efforts with its international partners.
Finally, he noted that many 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.
While innovations in trade and technology, such as the Internet, have
given consumers worldwide unprecedented access to new products and
services, attendees at today's roundtable briefing stated that fraud
operators also have increasingly used these methods as a means to
perpetrate cross-border fraud. Examples of such fraud include pyramid
and lottery schemes, travel and credit-related ploys, and high-tech
scams such as modem and Web page hijacking. In addition to harming
consumers, these frauds harm legitimate businesses and may reduce
consumer confidence in the global marketplace.
Because cross-border fraud operators strike quickly, victimizing
thousands of consumers in a short time, international cooperation is
essential to ensure they do not simply disappear along with their
ill-gotten gains. Further, they often are able to escape prosecution
because of the limited ability of law enforcement agencies to pursue
them across national borders or to adequately share evidence and other
information with fellow enforcement partners. Moreover, court-ordered
remedies that prohibit fraud operators from engaging in certain
conduct may be ineffective across borders.
The new Guidelines will help change this, the roundtable participants
said. They begin by specifically defining cross-border "fraudulent and
deceptive commercial practices," and go on to present a detailed
framework containing steps the international community can take to
combat such fraud and deception. Next, they present principles for
international cooperation, including notification, information
sharing, assistance with investigations, and confidentiality. Finally,
the Guidelines address the authority of consumer protection
enforcement agencies and stress that OECD member countries should work
to study the role of consumer redress in addressing the problem of
fraudulent and deceptive commercial practices, devoting special
attention to the development of effective cross-border redress
systems.
Copies of the new OECD Cross-border Fraud Guidelines are available
from the FTC's Web site at http://www.ftc.gov and also from the FTC's
Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W.,
Washington, D.C. 20580.
(end text)
(Distributed by the Bureau of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)



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