In the age of internet commerce, consumers are enjoying the increased convenience and ease of online resources. However many fear that lax enforcement has led to a drastic increase in the amount of online fraud affecting unsuspecting and susceptible shoppers. A new report by the Center for American Progress and Center for Democracy & Technology calls on state attorneys general to augment federal consumer protection enforcement and crack down on internet fraud and abuse.
Over the past few years, complaints alleging online fraud have risen while state attorneys general have brought only a handful of significant cases on behalf of consumers, the report states. While the FTC has increased its efforts to crack down internet abuse, the report notes that federal resources are limited. In addition to augmenting federal enforcement efforts, state action has the added benefit of utilizing stricter state consumer protection laws that may aid in efforts to prevent and discourage online fraud.
In compiling the results for the report, the two organizations asked states to provide data on consumer complaints received in 2006 and 2007 in various categories. In 2007, 24 of 30 states reported online activity within their top ten list of consumer complaints. In both years, 20 states reported a total of approximately 20,000 internet-related complaints. Comparatively, in 2007, the FTC reported 221,226 internet-related complaints, an increase of 16,000 from 2006.
The report recommends that state attorneys general devote more time and resources to identifying internet fraud. In addition, it suggests that states coordinate their efforts with one another and begin aggressively investigating consumer complaints relating to online fraud and abuse. While certain states such as New York and Washington have begun an aggressive campaign to enforce consumer protection laws in the context of the internet, more work needs to be done. One author of the report, Ari Schwartz, added “we need all 50 state attorneys general focused on this problem. Through committed action and vigorous enforcement, they can provide a powerful and much needed deterrent.”
