Investment Fraud Newsroom

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, DC, 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 includes 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.