[Federal Register Volume 67, Number 251 (Tuesday, December 31, 2002)]
[Notices]
[Pages 79931-79934]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-32991]


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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 
[email protected].

FOR FURTHER INFORMATION CONTACT: Stacy Feuer, (202) 326-3072,

[[Page 79932]]

[email protected], or Maureen Cooney, (202) 326-3485, [email protected], 
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 
[email protected]. 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 [email protected].
    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