Nations enter fight against Net consumer fraud

Joining together to fight international consumer fraud over the Internet, 12 nations are working on 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, “”, is being undertaken by the United States and Australia, Canada, Denmark, Finland, Hungary, Mexico, New Zealand, Norway, South Korea, Sweden, Switzerland and the United Kingdom.

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. “ 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 would 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 (, 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 (, an automated database of consumer complaints and other investigative 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 D.C.-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 D.C., 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.”