FTC game teaches auction lessons

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The federal government has found an entertaining way to teach consumers about online fraud.

The Federal Trade Commission announced the launch of "Auction Action" today, a point-based game that scores users on how successfully they can answer questions about online auctions.

"In 2005, the FTC received 20,450 complaints related to internet auctions, or about 12 percent of the total number of complaints, making it the second-most common kind of complaint after those about identity theft," the agency said in a statement. "The new website explains how internet auctions work, the pros and cons of using different payment options and how – as a buyer or seller – you can avoid the most common types of fraud."

The game is a new portion of the agency's online safety site, http://www.onguardonline.gov. The game itself contains a quiz-show-like point board with different questions behind every value.

The FTC said most complaints it receives about online auctions deal with shipments that are either late or have not arrived, bogus online payment or escrow services and fraudulent dealers.

The commission has also announced a settlement with CardSystems Solutions over charges that the company – which processed over 210 million card purchases last year – failed to take appropriate security measures to protect the sensitive information of tens of millions of customers.

The settlement required CardSystems, which does business as Pay By Touch, to implement independent audits every other year for two decades. The FTC had charged that the company failed to protect consumer by not implementing "simple, low cost" defenses against hackings. The lack of security led to millions of dollars in fraudulent purchases, according to the FTC.

This was the ninth FTC case targeting a company whose security practices compromised consumer data, the agency said, and the first against a credit card processor.

"CardSystems kept information it had no reason to keep and then stored it in a way that put consumers' financial information at risk," said Deborah Platt Majoras, FTC chairperson. "Any company that keeps sensitive consumer information must take steps to ensure that the data is held in a secure manner."

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