Designing for the Web: A Tutorial by Mike Markel

August 4, 1999

Mr. Chairman, I am Commissioner Orson Swindle of the Federal Trade Commission. The Commission is pleased to provide testimony today to assist the Committee in reviewing the necessity of amending Chapter 30 of Title 39 of the United States Code to address the mailing of deceptive materials relating to games of chance.⁽¹⁾ The Commission's statutory mandate is to encourage the efficient functioning of the marketplace by taking action against unfair or deceptive acts or practices and increasing consumer choice by promoting vigorous competition. A cornerstone of the Commission's mandate is Section 5 of the Federal Trade Commission Act, which prohibits unfair methods of competition and unfair or deceptive acts or practices in or affecting commerce.⁽²⁾ The Commission has a long history of using its authority under Section 5 to challenge deceptive mail promotions. Our most recent efforts in this regard culminated in "Project Mailbox," a joint federal-state initiative focusing on the deceptive use of sweepstakes, prize promotions, premium awards, and other misleading marketing techniques in mail solicitations, unsolicited facsimiles, and unsolicited commercial e-mail. Through Project Mailbox, the Commission coordinated law enforcement efforts with 47 states as well as other federal and some local law enforcement agencies to bring more than 200 actions challenging such practices. The United States Postal Service contributed significantly to the Project Mailbox efforts. A copy of the Project Mailbox report and the press release are enclosed. In order to support law enforcement efforts such as Project Mailbox, the Commission systematically collects and analyzes consumer complaint data. The Commission's Consumer Response Center ("CRC") currently receives nearly 7,000 consumer calls, letters, and e-mails per week—up substantially since activation of the Commission's new toll-free consumer hotline (1-877-FTC-HELP), in June of this year. CRC staff adds this information to the FTC's database, which currently contains more than 423,000 consumer complaints and inquiries. Commission staff use the database to spot trends, identify companies that should be targeted for enforcement action, and locate relevant witnesses. To maximize the effectiveness of this database, the Commission sponsors and operates Consumer Sentinel, a secure Internet website through which law enforcement agencies throughout the United States and Canada can access the database. The database includes not only consumer complaints received directly by the CRC, but also those submitted by a large number of United States and Canadian law enforcement agencies, as well as complaints from private data contributors such as the National Fraud Information Center, Better Business Bureaus, and the American Association of Retired Persons ("AARP").⁽³⁾ Consumer Sentinel is a joint project of the FTC and the National Association of Attorneys General, in cooperation with Canadian partners Canshare and PhoneBusters. The FTC makes Consumer Sentinel available, at no charge, to over 200 U.S. and Canadian law enforcement agencies to use in developing their enforcement actions. Consumer and business education is another important component of the Commission's consumer protection efforts, and many of our consumer alerts and brochures aim to raise public awareness of the dangers of deceptive sweepstakes promotions. The Commission also distributes a number of publications designed to help legitimate businesses that use prize promotions comply with the law. These consumer and business publications are available in hard copy and from the Commission's website, www.FTC.gov. Several examples of these publications, including consumer advisory brochures issued in connection with Project Mailbox, have been provided to the Committee.