Law Enforcers Target Internet Auction Fraud

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Several government agencies joined forces this week to launch a campaign to stem the fraud Internet auction-goers face regularly. The initiative was announced during the Second Annual National Consumer Protection Week, which was dubbed "Armchair Armor: Shopping Safely From Home" this year.

The effort -- aimed at persons who fraudulently sell products on Internet sites -- trains both federal and state law enforcers about how to track and prosecute Internet scammers, and offers a consumer education campaign to stem consumer fraud in Internet auction transactions. Among the agencies that took part were the Federal Trade Commission, the Justice Department, the U.S. Postal Inspection Service and the National Association of Attorney Generals.

While the campaign offers suggestions to help consumers who shop online, through catalogs and by telephone, the FTC said Internet auction transactions are a special focus. "We know that with the dramatic expansion of e-commerce, Internet auction sites are experiencing amazing growth," said Jodie Bernstein, director of the FTC's Bureau of Consumer Protection. "We also know that the number of complaints the FTC has received about Internet auctions is exploding -- from 107 in 1997 to 10,700 in 1999. We don't intend to let a handful of rogues erode consumer confidence in Internet commerce or Internet auctions."

Officials said they have taken more than 35 law enforcement actions against fraudulent Internet auctioneers -- and many more are in the pipeline. Fraudulent activity can involve non-delivery: Customers bid for something on an auction site and the seller takes the consumer's money but the consumer doesn't get the product; or, the consumer may receive merchandise that was not as it was described.

"The Internet has created tremendous opportunities for communications and commercial transactions. Unfortunately, it has also created new opportunities for cyber rip-off artists intent on ensnaring victims," said Christopher M.E. Painter, an assistant U.S. attorney in Los Angeles, who investigated one of the first Internet auction cases in the country.

In that case, the defendant, Robert J. Guest, collected $36,000 from bidders over eBay's Internet auction site, but he failed to deliver the promised goods. He subsequently was sentenced to 14 months in prison. Guest, who pleaded guilty to fraud in July, also was ordered to pay more than $101,000 in restitution, $36,193 of which will go to 31 eBay users.

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