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Pryor, Ayotte Introduce Bill to Pursue Online Fraudsters, Protect American Consumers From International Scams

Press Release

Location: Washington, DC

U.S. Senators Mark Pryor (D-AR) and Kelly Ayotte (R-NH) today introduced legislation to protect American consumers from spam, spyware, and other international fraud activities occurring over the Internet.

Pryor and Ayotte, who both serve on the Senate Commerce Committee, said they are concerned that current law enforcement tools used to combat global Internet scams are set to expire next year. Their legislation, the U.S. SAFE WEB Act, will extend current authorities until 2020. The bill provides the Federal Trade Commission (FTC) with enforcement tools in five key areas: information sharing, investigative assistance, confidentiality, enhanced investigative and litigating tools; and enforcement relationships. As such, the FTC has the ability to gather information and coordinate investigation efforts with foreign counterparts and obtain monetary consumer redress in cases involving Internet fraud and deception.

"Today's global economy mixed with the anonymity of the Internet provides a breeding ground for pyramid schemes, advance-fee loan scams, bogus foreign lotteries, spyware and sweepstakes schemes. This deception is bilking American consumers and businesses out of millions," Pryor said. "Our bill maintains the FTC's ability to fight spam and other means of deception on an international scale. Otherwise, we're only going to see this problem get worse."

"As a former prosecutor and Attorney General, I worked closely with law enforcement officials to combat and prosecute fraud and scams," said Senator Ayotte. "With the growing problem of Internet crimes, it is critical for the FTC to have the necessary tools to protect American consumers and businesses from online predators abroad."

According to the FTC, the number of consumer complaints against foreign businesses exceeded 100,000 in 2011 alone. SAFE WEB has enabled the FTC to pursue some of the most egregious cases, including over 100 investigations with international components such as foreign targets, evidence or assets. Examples include:

* FTC v. Jesse Willms: In 2011, Willms, a Canadian citizen, lured customers with "free" trial offers for items including weight-loss pills and teeth whiteners, and then charged them substantial and recurring "bonus fees." A U.S. court later entered a $359 million judgment against Willms and other defendants, and prohibited them from participating in deceptive marketing practices. The FTC used its SAFE Web authority to share information about this case with Canadian law enforcers, who, in turn, provided investigative assistance to the FTC.

* FTC v. Grant Connect: Nearly half a million U.S. consumers were deceived into buying phony "grant memberships" from Grant Connect, an Internet-based computer program that supposedly gave them access to U.S. government grants and other money. In 2009, the FTC charged these defendants of making misleading claims about fake products and services. A year later, the FTC obtained $29.8 million judgment against the defendants, and an order banning the defendants from promoting the products and services similar to those they deceptively pitched to U.S. consumers. Under its SAFE WEB Act, the FTC was able to share information with the New Zealand Department of Internal Affairs, and received assistance in return.

* FTC v. Yellow Page Marketing, B.V.: After receiving 600 consumer complaints, the FTC shut down U.S. operations of a Netherlands-based scam that swindled millions from small businesses and non-profits by tricking them into ordering and paying for unwanted listings in online business directories. The FTC used its SAFE WEB authority to work with the Competition Bureau Canada and obtain a $9 million judgment from the Canadian courts.

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