[Federal Register: December 31, 2002 (Volume 67, Number 251)]
[Notices]
[Page 79931-79934]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr31de02-61]
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FEDERAL TRADE COMMISSION
Public Workshop: Public/Private Partnerships To Combat Cross-
Border Fraud
AGENCY: Federal Trade Commission.
ACTION: Notice of public workshop and opportunity for comment.
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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') will
hold a public workshop on how to build public/private partnerships to
combat cross-border fraud against consumers. The workshop will explore
how the private and public sectors can work together to identify, stop,
and bring effective enforcement actions against cross-border fraud
operators; any legal constraints on cooperation; and recommendations
for partnerships and legislative and other measures to assist the FTC
in combating cross-border fraud.
DATES: The workshop will be held on February 19 and 20, 2003, from 9
a.m. to 5 p.m., at FTC headquarters, 600 Pennsylvania Avenue, NW.,
Washington, DC, in Commission Meeting Room 432 and Room 332 (overflow).
The workshop is open to the public and there is no fee for attendance.
Pre-registration is not required.
Request to Participate as a Panelist: A written request to
participate as a panelist in the workshop must be filed by January 24,
2003. If you are selected, you will be notified on or before January
31, 2003. For further instructions, please see the ``Requests to
Participate as a Panelist in the Workshop'' section below.
Written Comments: Whether or not selected to participate as a
panelist, you may submit written comments on the general subject of the
workshop and in response to any discussion questions that are posed
below. Such comments must be filed on or before February 14, 2003. For
further instructions on submitting comments, please see the ``Form and
Availability of Comments'' section below. To read our policy on how we
handle the information that you submit, please visit http://www.ftc.gov/ftc/privacy.htm
ADDRESSES: Written comments and any request to participate as a
panelist in the workshop should be submitted to: Secretary, Federal
Trade Commission, Room 159, 600 Pennsylvania Avenue, NW., Washington,
DC 20580. Alternatively, they may be sent by e-mail to
crossborderfraud@ftc.gov.
FOR FURTHER INFORMATION CONTACT: Stacy Feuer, (202) 326-3072,
[[Page 79932]]
sfeuer@ftc.gov, or Maureen Cooney, (202) 326-3485, mcooney@ftc.gov,
International Division of Consumer Protection, Federal Trade
Commission, 600 Pennsylvania Avenue, NW., Washington, DC 20580. A
detailed agenda and additional information on the workshop will be
posted on the FTC's Web site, http://www.ftc.gov, by February 5, 2003.
SUPPLEMENTARY INFORMATION:
Background Information and Workshop Goals
The globalization of the marketplace poses new and difficult
challenges for consumer protection law enforcement. Developments in
trade and technology have given consumers and businesses wide and
unprecedented access to new products, information, and markets. These
innovations have provided consumers and businesses with considerable
benefits. But fraud operators also have exploited these developments to
deceive large numbers of consumers in numerous jurisdictions. Pyramid
and lottery schemes, travel and credit-related ploys, and high-tech
scams such as modem and page hijacking are examples of the types of
frauds perpetrated across national borders that victimize consumers,
harm legitimate businesses, and reduce consumer confidence in the
global marketplace.
It is often more difficult to combat cross-border fraud than to
combat domestic scams. Cross-border fraud operators strike quickly
using easily accessible mechanisms (including telephone, e-mail, and
the world wide web); victimize thousands of consumers in a short period
of time; and disappear (along with the proceeds of their frauds). They
face a relatively low threat of civil or criminal prosecution because
law enforcement agencies have only a limited ability to pursue fraud
operators outside their jurisdiction and may be constrained in sharing
evidence with their foreign counterparts. Moreover, court-ordered
remedies prohibiting fraud operators from engaging in certain conduct
generally are ineffective across borders.
The FTC has been developing new strategies to deal with the
challenges posed by cross-border fraud.\1\ It has built relationships
with its law enforcement counterparts abroad to enforce laws
prohibiting unfair or deceptive practices and also has worked with
private sector entities including businesses, industry associations,
and consumer groups. Now, the FTC seeks to expand its ability to combat
cross-border fraud by increasing cooperation between the Commission and
such private sector entities.
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\1\ For a discussion of specific challenges and approaches to
cross-border fraud, see The Interface of Competition and Consumer
Protection, Prepared Remarks of Timothy J. Muris, Chairman, Federal
Trade Commission, at the Fordham Corporate Law Institute's Twenty-
Ninth Annual Conference on International Antitrust Law and Policy,
New York City, October 31, 2002. A copy of the text can be found at
http://www.ftc.gov/speeches/muris/021031fordham.pdf.
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As a first step, the Commission will convene a workshop to examine
the public and private sectors' mutual interests in combating cross-
border fraud. Business and industry representatives, state and federal
consumer protection and financial regulators, and consumer groups that
have encountered problems with cross-border fraud are especially
encouraged to participate. We also invite foreign businesses and
foreign government officials that have engaged in successful public/
private partnerships to attend the workshop.
Workshop participants will discuss existing private sector
initiatives to combat cross border fraud as well as existing barriers
to increased cooperation. Participants also will explore when and how
the private sector can share information about fraud with law
enforcement authorities, including financial and asset information
about investigative targets and defendants. Panelist also will discuss
how, in appropriate circumstances, legitimate private sector businesses
can fight fraud by suspending domain names, telephone services, mailing
services, or payments and credit processing services to fraud operators
located aboard who are often difficult to reach through court orders.
Participants also will address the feasibility of using practical and
technological solutions from the private sector to address cross-border
fraud perpetrated over the Internet. Participants are also invited to
discuss business-to-business initiatives that might be instructive in
developing new ways to combat cross-border consumer fraud.
We encourage interested parties to submit ideas for ways to
increase public/private cooperation to combat cross-border fraud. We
also invite interested parties to highlight any obstacles to private
sector cooperation in combating cross-border fraud; to submit ideas for
legislative and other changes to address these obstacles; and to
discuss potential disincentives to increased cooperation and ways to
overcome those disincentives.
Following the workshop, the Commission plans to prepare a report to
the U.S. Congress discussing certain constraints on international law
enforcement cooperation facing both the FTC and the private sector, and
suggesting ways to improve cross-border law enforcement. We hope to
include appropriate proposals that emerge from the workshop.
Below is a non-exhaustive list of issues to be addressed at the
workshop. Written comments need not address all of these issues.
1. General Issues
To set the framework for the workshop, the FTC requests comments on
the general issues raised by the workshop:
a. What cross-border fraud issues is the private sector facing or
expecting? How do businesses, industry associations, and consumer
groups define and identify cross-border fraud in the consumer context?
b. How can the private sector assist the FTC in fighting cross-
border fraud?
c. What mechanisms does the private sector currently use to detect,
stop, and deter cross-border fraud? Are there existing business-to-
business initiatives that could serve as models for partnerships
between the FTC and the private sector? How can these mechanisms and
initiatives be adapted, improved or expanded?
d. What are the key obstacles to expanded public/private
cooperation in fighting cross-border fraud?
e. What are the potential downsides for the private sector in
cooperating with the FTC in fighting cross-border fraud? What, if
anything, can the FTC do to mitigate any potential negative effects?
f. What information about the extent of cross-border fraud, and
about costs to legitimate businesses, including statistical
informaiton, can the private sector provide to the FTC? What
information can the private sector provide about costs related to
cooperation with law enforcement?
2. Infornmation Sharing
Different panels of the workshop will address the ability of the
private sector to share information with the FTC--both to prevent and
detect fraud and to assist the FTC in providing redress to the victims
of fraud. The FTC requests comments on the following general
information sharing issues:
a. What types of information can private entities share with the
FTC about investigative targets and defendants in civil fraud matters?
b. Are there mechanisms for sharing information among private
sector entities that could assist the FTC in fighting cross-border
fraud?
[[Page 79933]]
c. Are there legal, structural, technological or other limits on
the private sector's ability to share information about investigative
targets and defendants with the FTC in civil fraud investigations and
lawsuits?
d. Are there ways that legitimate businesses can share consumer
complaints they receive with the FTC for inclusion in the FTC's
Consumer Sentinel database? \2\
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\2\ See www.consumer.gov/sentinel.
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e. What role does consumer consent play in relation to information
sharing?
f. Is there information that the FTC could share with the private
sector that would facilitate private sector assistance to the FTC in
civil fraud investigations and lawsuits?
g. Are there legal or other limits on the FTC's ability to share
information with private entities that inhibit the private sector from
providing information about investigative targets and defendants to the
FTC in civil fraud investigations and lawsuits?
h. Are there legal or other limits on other public sector agencies
sharing information with the FTC, including information obtained
through partnerships with the private sector, in civil fraud
investigations and lawsuits?
i. What legislative or other changes could relieve constraints on
information sharing with the FTC in civil fraud investigations and
lawsuits?
3. The Financial Sector
The financial sector has had much experience with cross border
consumer transactions. We recognize that cross-border fraud harms
consumer confidence in the global marketplace and presents challenges
to participants in the financial system. The FTC seeks comment on the
extent and costs of cross-border consumer fraud to the private sector,
and on methods that financial sector entities can employ to stop fraud
and reduce the profitability and proliferation of cross-border schemes:
a. What are the costs of cross-border consumer fraud to legitimate
businesses, including businesses in the financial sector such as
financial institutions and other financial services providers, credit-
card issuers, electronic payment systems operators, and money
transmitters (collectively, ``financial sector entities'')? How are
these costs measured?
b. What are some mechanisms for practical cooperation between the
FTC and financial sector entities in fighting cross-border
telemarketing fraud, identity theft, pretexting, and the variety of
scams that misuse financial and payment systems?
c. Are there ways in which financial sector entities can assist in
combating cross-border fraud by providing information to the FTC about
suspicious transactions or other questionable financial practices of
concern in FTC civil fraud investigations and lawsuits?
d. Are there circumstances in which financial sector entities can
assist the FTC by cutting off fraud operators' access to their services
or by interrupting or suspending financial transaction processing and
settlement through various payment systems?
e. Are there ways in which financial sector entities can assist the
FTC in civil fraud investigations and lawsuits by providing the FTC
with information about investigative targets or defendants that have
transferred funds to unrelated offshore entities and/or by providing
the FTC with information from their offshore subsidiaries or
affiliates?
f. Are there legal or other limits on financial sector entities
assisting the FTC in civil fraud investigations and lawsuits? If so,
are there any legislative or other changes that would relieve these
constraints?
g. What are the costs of cross-border consumer fraud to financial
sector participants and financial markets through fraudulent activities
by FTC investigative targets and defendants as a result of misuse of
legitimate payment systems, asset dissipation, and other financial
frauds used by FTC investigative targets and defendants?
h. What are the possibilities for increased information sharing
with the FTC, particularly concerning targets and defendants that have
transferred the proceeds of consumer fraud schemes offshore in
circumvent FTC civil consumer redress judgments?
4. Internet
The FTC seeks comment on how Internet service providers, domain
registrars, and other Internet-related businesses can assist in
preventing fraud operator from using the Internet to perpetrate
fraudulent schemes?
a. Are there ways in which the private sector can provide
assistance to the FTC in civil fraud investigations and lawsuits to
identify, locate, and track cross-border fraud operators who use the
Internet (including email) to perpetrate fraudulent schemes?
b. Can the private sector provide practical or technological
solutions for combating fraudulent schemes perpetrated over the
Internet (including by email) to the FTC in civil fraud investigations
and lawsuits?
c. Are there ways in which electronic communications providers can
improve or modify their policies and practices regarding data retention
and disclosure of investigative requests for information, subject to
existing law, to facilitate information sharing in civil fraud
investigations and lawsuits?
d. Are there any legal or other limits to providing such assistance
to the FTC in civil fraud investigations and lawsuits? If so, are there
any legislative or other changes that would relieve such constraints?
5. Other Third-Party Service Providers
Cross-border fraud operators often use a variety of other
commercial services to perpetrate frauds and dissipate assets. Some of
these businesses engage in legitimate business activities while others
are participants in the fraud. The FTC seeks comment on how legitimate
commercial third-party service providers can assist the FTC:
a. What role can service providers, such as telephone and wireless
carriers, commercial mailbox facilities, private courier services,
telephone call centers, list brokers, and mail-order fulfillment
houses, play in helping to combat cross-border fraud?
b. Are there ways in which service providers can share information
with the FTC about suspicious transactions or questionable business
practices by investigative targets or defendants in civil fraud
investigations and lawsuits?
c. Are there ways in which service providers can suspend services
to FTC investigative targets or defendants? What are the appropriate
circumstances for doing so?
d. Are there ways in which service providers can improve or modify
their policies and practices regarding data retention and disclosure of
investigative requests for information, subject to existing law, to
facilitate information sharing in civil fraud investigations and
lawsuits?
6. Public/Private Models for Cooperation
The FTC recognizes that, around the world, there are a variety of
government and non-governmental entities that participate in
prosecuting consumer fraud. The FTC also recognizes that law
enforcement authorities in the U.S. and in other countries have formed
successful public/private partnerships to combat other types of crime
and civil fraud. The FTC seeks to learn from these experiences:
a. What existing public/private partnership models with federal or
state civil or criminal law enforcement authorities in the U.S. and
foreign law
[[Page 79934]]
enforcement authorities can be adapted to assist the FTC in combating
cross-border fraud?
7. Consumer and Business Education Partnerships
The FTC frequently works with businesses and industry to provide
education on consumer issues. The FTC seeks comment on ways it can
engage with the private sector to provide education about cross-border
fraud:
How can the FTC, other public entities, and the private sector
partner to better educate consumers and businesses about ways to thwart
cross-border fraud?
Request To Participate as a Panelist in the Workshop
If you wish to participate as a panelist in the workshop, you must
notify the FTC in writing by January 24, 2003. Such requests should be
made either by mail to the Secretary of the FTC or by e-mail to
crossborderfraud@ftc.gov. A request to participate as a panelist should
be captioned ``Public Workshop: Public/Private Partnerships to Combat
Cross-Border Fraud--Request to Participate, P035302.'' Each person is
asked to include in the request the topic area for participation, a
statement of expertise in or knowledge of the issues relevant to that
topic, and contact information, including a telephone number, and email
address. Unless submitting by email, an original and two copies of each
document should be submitted. Panelists will be notified of their
selection by January 31, 2003.
Using the following criteria, FTC staff will select a limited
number of panelists to participate in the workshop:
1. The party has expertise in or knowledge of the issues that are
the focus of the workshop.
2. The party's participation would promote a balance of interests
being represented at the workshop.
3. The party has been designated by one or more interested parties
who timely file requests to participate as a party who shares group
interests with the designator(s).
In addition, there will be time during the workshop for those not
serving as panelists to ask questions.
Form and Availability of Comments
To facilitate the discussion, the FTC requests that interested
persons submit written comments on the general subject of the workshop
and in response to any questions posed on issues that could be
addressed. Comments should be captioned ``Public Workshop: Public/
Private Partnerships to Combat Cross-Border Fraud--Comment, P035302.''
Persons sending written comments should submit an original and two
copies of each document. To enable prompt review and public access,
paper submissions should include a version on diskette in PDF, ASCII,
WordPerfect, or Microsoft Word format. Diskettes should be labeled with
the name of the person, and the name and version of the word processing
software used to create the document. Alternatively, comments may be
emailed to crossborderfraud@ftc. gov.
Written comments will be available for public inspection in
accordance with the Freedom of Information Act, 5 U.S.C. 552, and FTC
regulations, 16 CFR part 4.9, Monday through Friday between the hours
of 8:30 a.m. and 5 p.m. at the Public Reference Room 130, Federal Trade
Commission, 600 Pennsylvania Avenue, NW., Washington, DC 20580. This
notice and, to the extent technologically possible, all comments will
also be posted on the FTC Web site, http://www.ftc.gov.
By direction the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 02-32991 Filed 12-30-02; 8:45 am]
BILLING CODE 6750-01-M