The Senate has passed a bill that would give the Federal Trade Commission (FTC) authority to challenge scams against U.S. consumers by foreign entities.

By voice vote September 15 the Senate passed the bill, which would also reauthorize the FTC in 2005-2008. To become law the same version of the bill must pass the Senate and House of Representatives and the president must sign it.

Senator John McCain, Republican chairman of the Senate Commerce Committee, sponsored the bill. He said that the agency needs authority not only to share its confidential information on cross-border fraud with foreign consumer agencies but also to secure such information from those agencies.

The bill would authorize the FTC, in conjunction with the Justice Department, to pursue in foreign courts cases against scams perpetrated against U.S. consumers.

"The FTC's consumer protection responsibilities are essential, particularly in today's global climate of high-speed information and marketing, which know no international borders," McCain said.

The bill would also allow the FTC to trace money from illegal Internet schemes transmitted through U.S. banks to offshore bank accounts.

"Those who devise and carry out such schemes are too often allowed to escape the grasp of the FTC," McCain said.

Mr. President, I am pleased that the Senate has agreed by unanimous consent to pass a substitute amendment to the Federal Trade Commission Reauthorization Act, S. 1234. The bill would reauthorize the Federal Trade Commission in furtherance of its mission to enhance the efficient operation of the marketplace by both eliminating acts or practices that are unfair or deceptive and preventing anti-competitive conduct. Further, the legislation would authorize funding for the FTC through 2008, and enhance the Commission's ability to combat international -- or cross-border -- fraud.

In addition to reauthorizing this vital consumer protection agency for the period 2005 through 2008, the bill, as amended, is also designed to mitigate the challenges that the FTC increasingly faces in combating cross-border fraud. The FTC's consumer protection responsibilities are essential, particularly in today's global climate of high-speed information and marketing, which know no international borders.

This legislation is crucial to the FTC's ability to protect American consumers by authorizing the Commission to: Share information involving cross-border fraud with foreign consumer protection agencies; secure confidential information from those foreign agencies; work in conjunction with the U.S. Department of Justice [DOJ] to seek redress for American consumers in foreign courts; make criminal referrals to the DOJ for cross-border criminal activity; and generally strengthen its relationship with foreign consumer protection agencies.

Under the FTC's current authority the agency is not able to exchange information with its foreign counterparts to shut down consumer scams originating outside the United States, but perpetrated against American consumers. As a consequence, the FTC is left without the ability to seek redress on behalf of defrauded consumers. In addition, the FTC is not currently considered a "market regulator," and thus, banking agencies may not share suspicious consumer information with the FTC. As a result, the FTC is not able to trace funds derived from illegal Internet schemes sent through U.S. banks and placed in offshore bank accounts. Thus, those who devise and carry out such schemes are too often allowed to escape the grasp of the FTC. But even if the FTC were able to share information with its foreign counterparts and market regulators, the FTC would be unable to litigate consumer protection cases in foreign courts.

While these are descriptions of merely a few gaps in the FTC's current international consumer protection authority, they underscore how vulnerable American consumers are to cross-border fraud. This legislation would fill these and other gaps in the FTC's current international consumer protection authority, and allow the FTC to function more effectively in carrying out its Congressional mandate to protect American consumers.

This bill, as amended, would also grant authority to the FTC to provide investigative and other services to a requesting domestic law enforcement agency and receive from that agency, if offered, reimbursement for the FTC's involvement. Finally, the amendment would provide to the Commission the authority it has requested to receive gifts or items that would be useful to the Commission as long as a conflict of interest is not created by such receipt.

The underlying bill was considered and reported unanimously last year by the Senate Committee on Commerce, Science, and Transportation. Since being placed on the Senate Calendar, its provisions have been thoroughly vetted on a bipartisan basis with the multiple federal agencies that have a vested interest in its enactment. We have worked with and received sign off from each affected agency on this substitute amendment.