With fraudulent online auctions accounting for 87 percent of all Internet fraud, the Federal Trade Commission on Monday announced a partnership with the Justice Department, the U.S. Postal Inspection Service and state attorneys general to combat the growing problem.
The alliance will focus on training state and local law enforcement officers to seek out and prosecute Internet fraud, according to Jodie Bernstein, director of the FTC's Bureau of Consumer Protection. The number of complaints about online auctions received by the agency skyrocketed to 10,700 last year from 107 in 1997.
"We know that with the dramatic expansion of e-commerce, Internet auction sites are experiencing amazing growth," Bernstein said. "We want Internet auction users and the online auction industry to know that e-con artists who capitalize on them are 'going, going, gone.'"
In addition to coordinating with state consumer agencies and law enforcement officials, the announcement was made on the first day of National Consumer Protection Week designed to educate consumers to avoid scams.
"Law enforcement must shine a bright light on the dark side of the Web," said Christopher Painter, assistant U.S. attorney and computer crimes coordinator in Los Angeles. More than 35 law enforcement actions already have been taken against allegedly fraudulent auctioneers.
"I have seen almost every type of crime migrate to the Internet, including new schemes that weren't possible" before the creation of the Web, Painter said. Last year, fraudulent online auctions made up 60 percent of all Internet fraud.
Bernstein encouraged consumers to utilize the National Consumer League's antifraud Web site. Painter said that in addition to checking a seller's rating feedback, consumers should either pay via credit card or use an escrow service that withholds payment until the auctioned goods are delivered.
But if fraudulent cases continue to proliferate, regulation of the online auction business may be the only solution, said Maryland Attorney General Joseph Curran.
"The answer could well be for government to license and regulate" online auction sites, Curran said. "That may be, a long time from now, the only way to deal with it."
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