Toward a SAFE WEB

In the spirit of yesterday’s superhero-themed post, Spiderman fans have insisted on equal time.  Lucky for us, today's congressional testimony urging reauthorization of the US SAFE WEB Act gives us just the segue we needed.

As commerce has gone global, international fraudsters have tagged along.  The reach and speed of the internet, the ease of moving ill-gotten gains to off-shore asset havens, and roadblocks to information sharing made it tougher for enforcers to work together.  Add to that the relative anonymity of the web — “On the Internet, no one knows you’re a dog” — and the obstacles to consumer protection are apparent.

In 2006, to bolster enforcement against cross-border con artists who rip off American consumers, Congress passed the Undertaking Spam, Spyware, And Fraud Enforcement With Enforcers beyond Borders Act.  (Now you know why it’s called US SAFE WEB.)  The law gave the FTC additional tools to fight spyware, telemarketing swindles, online scams, and other forms of fraud.  (Actually, the weapons weren’t really new.  Agencies like the SEC and CFTC had similar authority for quite some time.)

The FTC filed a Report to Congress in 2009 detailing the "significant role the Act has played in facilitating cross-border cooperation in investigations and enforcement proceedings, along with the growing need for continued cooperation to combat new and existing global fraud."

The problem?  SAFE WEB is set to expire next year, so the FTC is asking Congress to reauthorize the law.

According to the testimony, the numbers speak for themselves.  Since Congress passed SAFE WEB, the FTC has conducted 100+ investigations with international angles and has filed more than 50 cases with cross-border ramifications.  Using SAFE WEB tools, the FTC has been able to shut down frauds that would have bilked American consumers out of hundreds of millions of dollars.

But there’s still work to be done.  Between 2006 and 2011, almost half a million U.S. consumers complained about transactions involving more than $1.4 billion paid to companies in other countries.  The number of U.S. consumer complaints against foreign businesses topped 100,000 in 2011 alone.  And the geographic scope of the problem has expanded.  In 2002, 55% of complaints received about foreign companies involved Canadian businesses.  Fast forward a decade and over 85% were about businesses in other parts of the world.

Why should SAFE WEB matter to your company?  Two reasons.  First, cross-border scams victimize the B2B sector, too.  The FTC has used SAFE WEB tools to take action against scammers that specifically targeted smaller companies — for example, through bogus business directory promotions.  Other cases, like actions to shut down purveyors of spyware and scareware, challenge conduct that harms consumers and entrepreneurs.  Second, a safer experience for online shoppers means more business for all companies, global concerns and mom-and-pop operations alike.

Sorry, Spidey, but for real adventures in keeping the web safer, we prefer SAFE WEB.

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