Remarks of

SENATOR SUSAN M. COLLINS

at the Federal Trade Commission

Workshop on Public/Private Partnerships 

to Combat Cross-Border Fraud

February 19, 2003

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I am delighted to be able speak to you today about the growing

problem of cross-border fraud. This serious threat has been a concern of

mine for several years now, and I am pleased that the Federal Trade

Commission has convened this public forum to explore new ways of

combating it. 

As the legions of victims can attest, cross-border fraud is very

costly, both in financial terms and in emotional ones. During Senate

hearings that I chaired in June 2001 on mail, Internet and telemarketing

fraud, several elderly witnesses testified about being defrauded of

thousands of dollars and the resulting hardships caused by the loss of
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their life savings. Indeed, such schemes rob their victims not only of

their hard-earned savings but of their dignity and self respect.

A Maine woman, for example, testified that her 80-year old

husband, formerly a successful businessman, had fallen prey to devious

telemarketers and clever mail solicitations. She estimated that he lost

$20,000 to these schemes, and she described how devastating these

losses had been to their family. She has since told me that these

fraudulent pitchmen will not give up. In fact, her husband continues to

receive solicitations from illegal Canadian and Australian lotteries each

week, as well as numerous telemarketing calls every day.

Americans have lost substantial sums to criminals - both foreign

and domestic. For example, in 2002, the FTC received more than

102,000 complaints of Internet-related fraud, a more-than-threefold

increase over the 33,000 complaints in 2000. In 2002, American
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consumers lost a staggering $122 million to criminals using the Internet,

up from $26 million in 2000.

Nor have criminals abandoned the more traditional means such as

mail and the telephone to reach potential victims. Mail fraud complaints

are up 27 percent, according to the Postal Inspection Service. The

agency responded to 66,000 mail fraud complaints in 2001, and more

than 84,000 complaints in 2002. In addition, the Inspection Service shut

down 40 illegal telemarketing operations in 2002, a 43 percent increase

over 2001, and halted 80 deceptive mailing operations in 2002, up 40

percent from last year. 

The number of mail, telemarketing and Internet fraud complaints

involving a foreign component has grown significantly in the past few

years. Crooks worldwide have availed themselves of technological

advances to target American consumers via email and the Internet. 

Foreign countries have unfortunately become a source of entry for
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lottery, sweepstakes and advance-fee-for-loan scams that prey upon

Americans through direct mail and telemarketing.

How do we fight such fraud? The first line of defense against mail,

Internet and telemarketing fraud is to promote public awareness of the

types of schemes in which criminals are likely to engage, and what

consumers can do to report fraudulent overtures. Potential victims have

the power to say “no” to the pitches of fraudulent telemarketers, and to

throw out deceptive mailings from illegal lotteries and fraudulent

sweepstakes. We must encourage them to do just that.

Accordingly, last June I introduced a resolution which passed the

Senate unanimously designating the week of August 25, 2002 “National

Fraud Against Senior Citizens Awareness Week.” This public campaign

was designed to alert our nation’s seniors and their families to how they

can avoid becoming victims of fraud. The comprehensive effort

included posters hanging in post office lobbies nationwide, newspaper
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advertisements, public service announcements on the television and

radio, and mail inserts alerting seniors to fraudulent schemes.

Our efforts to educate consumers during National Fraud Against

Senior Citizens Awareness Week appear to have had some success. For

example, during the first week of the campaign, a woman in her eighties

went to a small post office in Pennsylvania to mail a $2,200 cashiers

check to Canada. She told the postmaster that she needed to send the

money right away to pay taxes on $162,000 that her husband had won in

a Canadian sweepstakes. The postmaster, who had been educated by the

campaign, was able to prevent the woman from sending her money to

the con artists.

 In addition to our efforts to educate consumers and prevent crossborder crimes, we must give law enforcement the tools it needs to put a

stop to these con artists. Cross-border criminal activity has proved to be

a particularly challenging problem for law enforcement. Jurisdictional
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issues often make it difficult for law enforcement agencies to pursue

criminals across borders, as well as to share evidence with their

counterparts in other countries. We need to find ways for law

enforcement agencies in different countries to coordinate their efforts in

order to build a united front against cross-border con artists, because

these crimes are on the rise. 

We must look for more creative ways to combat this threat within

our own borders. The goal of today’s forum is to develop new ideas for

private-public partnerships to stop this crime which affects so many

Americans. A number of American companies have developed means

of detecting and preventing scams aimed at them and their customers. It

is my hope that some of these methods may be adapted to help law

enforcement put a stop to these con artists.

I would like to conclude by thanking Chairman Muris for fighting

so hard against cross-border crime. Together, I am confident that we can
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put a stop to the schemes of cross-border criminals. I look forward to

the chairman’s report to Congress that will follow today’s forum on this

important issue and to reviewing the FTC’s legislative proposals aimed

at curbing cross-border fraud.

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