Consumers across the world will reap better protection due to the adoption of the Guidelines for Protecting Consumers from Fraudulent and Deceptive Commercial Practices across Borders by the OECD Council.
This significant step has been welcomed by the International Consumer Protection and Enforcement Network, an action group of government consumer protection law enforcers from 31 countries.
"There is no doubt that consumer fraud and deception across national boundaries is increasing", ICPEN President, and ACCC Commissioner, Mr Sitesh Bhojani, said today. "The question is what can be done to clamp down on it.
"Implementation of the OECD guidelines by member countries will better protect their consumers and small businesses from cross border fraud and deception", said Mr Bhojani. "It is an important, tangible step that governments can take in light of the agreement reached by OECD member countries on the guidelines.
"This Network is increasingly taking action against fraudsters and rip-off merchants. The implementation of these guidelines by member countries will mean that investigators and prosecutors can achieve closer, faster, and more efficient cooperation. In some jurisdictions, investigations could progress where they previously might have ground to a halt".
ICPEN members are likely to achieve the following improvements in protecting consumers if the guidelines are implemented:
- Obtaining evidence that was previously unavailable from foreign agencies (such as relevant expert statements) that may bolster the case
- Improved assistance from overseas agencies in practical matters such as service of process
- Better chance of gaining redress for harmed consumers, regardless of their location
- Increased ability to stop harmful and unlawful conduct, like deception, unauthorised credit card billing, and failure to send any goods after payment
- Greater use of evidence, judgements and enforceable orders from foreign countries to stop illegal and harmful conduct in their own jurisdictions
- Enhanced authority to take court action against foreign traders
- More focused joint actions, deterring a trader prosecuted in one country from continuing its activities in a different country
- Better assistance in locating and freezing assets of suspects for consumer redress
- Early warning of potential unlawful conduct moving into new jurisdictions
- Faster provision of requested information to foreign law enforcers, to speed up investigative processes.
"The only way to tackle multi-jurisdictional challenges is through the kind of close cooperation that ICPEN members are pursuing", Mr Bhojani said. "These guidelines represent a giant leap forward in our quest to do it better".
Consumer confidence is an essential ingredient if e-commerce is to achieve its enormous potential. Effective action and cooperation by global consumer cops is a foundation for creating that consumer confidence.
"There is no hiding by running across borders. If traders breach the law, then ICPEN will find them, where appropriate sue them for refunds for consumers or small businesses, and, if necessary, shut them down".
ICPEN consumer protection activities are not limited to law enforcement activities on the Internet. Network cooperation also extends to combating offline practices with international effects, including postal or telecommunications consumer fraud. ICPEN is also committed to cooperation with consumers and private industry to achieve effective global consumer protection.
Consumers who believe they have been a victim of deceptive practices on the Internet can register their complaint at www.econsumer.gov, ICPEN's global online complaint mechanism. Seventeen member countries have access to this mechanism for the purposes of monitoring online conduct, and taking enforcement actions where possible.
Australian examples
The Acepark Computer betting system is an example of an Australian company selling a bogus product overseas (New Zealand) as well as domestically. The ACCC's case was strengthened by evidence of illegal conduct in New Zealand provided by the NZ Commerce Commission. That sort of cooperation and assistance could now become global rather than just regional.
Many promoters of bogus schemes like lottery scams and bogus directory entries are using internet sites set up in overseas countries to fleece Australian consumers and small businesses. Some set up sites in Australia to fleece overseas consumers and small businesses. Some schemes are set up and operate from multiple countries with illicit funds being funneled through Australia.
The ACCC is currently in court in relation to conduct by IT&T AG, a Swiss company. The OECD guidelines would have boosted the efficiency of ACCC litigation to date by reducing the nine months taken to serve the necessary legal documents on the Swiss company for its conduct in Australia. It is also worth noting that the Swiss Consumer Protection agency (SECO) has taken successful legal action against the company for identical conduct which occurred in that country. Although this matter is subject to appeal, the orders of the Swiss Court did not extend to conduct outside Switzerland.
In ACCC v Greenstar, tighter liaison and closer cooperation of consumer enforcement agencies globally under the draft OECD Guidelines may have helped in tracking down where consumers' money had gone or even prevented its transfer to offshore accounts.