U.S. Unveils Net Fraud Center

The U.S. Department of Justice (DOJ), FBI, and the National White Collar Crime Center launched the Internet Fraud Complaint Center (IFCC) Monday to give consumers and businesses a place online to report incidents of online fraud.

“The Internet Fraud Complaint Center allows consumers who suspect Internet fraud to share that information with law enforcement quickly and efficiently,” U.S. Attorney General Janet Reno said. “Our ability to work with private citizens and industry is extremely important to our efforts to fight Internet crime, and the IFCC is a major step forward in that fight.”

The center will be initially staffed by 12 FBI agents and 25 representatives of the National White Collar Crime Center, an organization funded by the U.S. Department of Justice that provides support services to state and local law enforcement for the prevention, investigation and prosecution of high-tech and economic crime.

Existing Government Alliances

Dozens of companies, organizations, and government agencies already operate anti-fraud Web sites or collective services to assist e-commerce companies and consumers. Another national effort is the Federal Trade Commission (FTC) alliance with the Better Business Bureaus, the U.S. Postal Inspection Service and the National Association of Attorneys General (NAAG).

Under the FTC alliance, more than 100 local Better Business Bureaus have agreed to provide consumer complaint data, while the U.S. Postal Inspection service will share relevant consumer complaints from its Mail Fraud Complaint System. All 50 state attorneys general have signed on as members of the new system.

The FTC’s Consumer Sentinel database contains more than 250,000 consumer fraud complaints filed with federal, state and local law enforcement agencies and private organizations. The complaints cover deceptive business practices related to telemarketing and direct mail as well as to the Internet.

Local and state law enforcement agencies are also getting involved in specific projects, such as the Computer Law Enforcement of Washington (CLEW) initiative. As reported in the E-Commerce Times, CLEW puts the Washington State Attorney General’s Office, the U.S. Attorney’s Office, the FBI, the Washington State Patrol, the Washington Association of Sheriffs and Police Chiefs, and the Washington Association of Prosecuting Attorneys to work providing 24-hour law enforcement response to high-tech crime complaints.

Most Powerful

The FBI and the Department of Justice are the most significant U.S. government agencies to get involved so far, having the most relevant offline anti-fraud experience and wielding the most law enforcement power, according to the FBI.

“The Internet provides a boundless new medium for many traditional frauds investigated by the FBI. That there are real victims suffering significant losses remains unchanged,” FBI Director Louis Freeh said.

“The crucial difference in fraud committed over the Internet is that the perpetrator can ‘virtually’ vanish, leaving consumers wondering who or where to turn for help,” said Glen B. Gainer III, state auditor for West Virginia and chairman of the National White Collar Crime Center.

How It Works

The IFCC is based in Morgantown, West Virginia, where the National White Collar Crime Center is also located. Hosted on a secure server, the fraud complaint site allows victims to describe the fraud they are reporting.

The IFCC will analyze the complaints to determine jurisdiction, conduct analytical and investigative work, and disseminate the information to the appropriate local, state or federal law enforcement agencies for criminal, civil or administrative action. The IFCC will also try to track down perpetrators in the United States and abroad, the FBI said.

In addition to giving consumers a place to lodge their complaints, the IFCC will give law enforcement agencies at the local, state and federal level a central place to look up pending cases, get statistics on Internet fraud, and find information on fraud patterns and trends.

Similar Project

The Internet Fraud Prevention Advisory Council, a similar project underway in the private sector since late last summer, is headed by HNC Software, Inc. and five other companies involved in e-commerce infrastructure, billing and transaction services. The companies formed the council to provide advice and guidance to Internet, retail, financial and payment companies, including data on fraud trends and techniques to combat fraud.

The group has also said it is willing to share its information with other e-commerce fraud prevention and security groups. The IFCC and other federal government projects are also open to exchanging information and data with U.S. and international organizations.