[Public Papers of the Presidents of the United States: WILLIAM J. CLINTON (1999, Book II)]
[November 6, 1999]
[Pages 2003-2004]
[From the U.S. Government Publishing Office www.gpo.gov]



Memorandum on Protecting Consumers From Fraud
November 6, 1999

Memorandum for the Attorney General

Subject: Protecting Consumers from Fraud

    My Administration has taken unprecedented steps to safeguard 
consumers through vigorous law enforcement and prevention, but we must 
continue to do more. For example, we have announced new initiatives on 
Internet fraud and identity theft that call on law enforcement to step 
up their efforts on behalf of consumers. In addition, as part of my 21st 
Century Crime bill, I announced several new measures that will help 
protect elderly Americans from fraudulent activities. My crime bill will 
give the Department of Justice new authority to block and terminate 
telephone service to illegal telemarketers. In addition, it will give 
Federal prosecutors new tools to protect nursing home residents from 
abuse and neglect; to fight health care fraud; and to safeguard 
retirement and pension plans.
    Consumers are often unaware of where to receive assistance. A recent 
Postal Inspection Service survey found that 12 percent of respondents 
admitted to being a victim of fraud, but that 25 percent of all 
respondents did not know where to go for help if they were the victim of 
telemarketing or mail fraud.
    Today I announced the ``kNOw Fraud'' project, which is a public-
private partnership of the United States Postal Service, the American 
Association of Retired Persons, the Council of Better Business Bureaus, 
the Department of Justice, the Federal Trade Commission (FTC), the 
National Association of Attorneys General, and the Securities and 
Exchange Commission (SEC). Even though violent crime rates are at record 
lows, illegal telemarketing fraud costs Americans an estimated $40 
billion every year. Project ``kNOw Fraud'' will help arm consumers with 
needed information so that they can protect themselves from 
telemarketing fraud. This initiative shows how Government can serve the 
public when working in close coordination to vigorously enforce consumer 
protection laws and keep the public informed about new scams and how to 
avoid them.
    Federal agencies such as the FTC and the SEC also have initiated 
important consumer

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protection initiatives in order to thwart fraudulent activities. The 
FTC's Consumer Response Center takes consumer complaints and inputs them 
into a centralized database, the Consumer Sentinel, which is available 
for use by Federal, State, and local law enforcement agencies across the 
country and in Canada. Since its launch, Consumer Sentinel counts some 
214 partner organizations that have contributed an estimated 200,000 
complaints to the database, allowing law enforcement officials to 
ascertain whether a complaint is an isolated incident or part of a wider 
pattern of activity. Last year, the SEC's Office of Investor Education 
and Assistance handled more than 60,000 consumer complaints and 
inquiries, many of which dealt with telemarketing or online fraud. In 
addition, the SEC's website warns the public about fast-breaking scams 
and tells consumers how to investigate investment opportunities.
    Recognizing the need for closer coordination, earlier this year you 
directed the Council on White Collar Crime to coordinate and bolster the 
consumer protection activities of the Department of Justice, the FTC, 
the SEC, the Postal Inspection Service, and others. To further these 
efforts, I direct you to report back to me within 6 months with a plan 
(1) to better prevent consumer fraud activities and (2) improve 
coordination among the Federal Government's consumer protection 
activities to ensure that each agency's expertise is considered. In 
creating this plan, you should consult with all interested parties, 
including other Federal agencies and offices, including the FTC and SEC; 
State and local law enforcement; and consumer agencies and consumers. 
This plan also should build on efforts of the private sector, including 
nonprofits, to protect consumers.
    These steps, taken together, will help to protect consumers from 
fraud and also help to save consumers millions of dollars in the next 
millennium.

                                                      William J. Clinton

Note: This memorandum was made available by the Office of the Press 
Secretary on November 5 but was embargoed for release until 10:06 a.m. 
on November 6. An original was not available for verification of the 
content of this memorandum.