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    FMI Hails Legislation to Combat Resale of Stolen Goods Over the Internet

    The trade group sees it as a key component in stopping organized retail crime.

    The Food Marketing Institute last week praised legislation just passed to fight "e-fencing," or reselling stolen goods over the Internet. The bill, known as the E-Fencing Enforcement Act of 2008, was introduced by U.S. Rep. Bobby Scott (D-Ind.), chairman of the House Judiciary Subcommittee on Crime, Terrorism, and Homeland Security.

    "The Scott bill attacks a chief driver of organized retail crime," said FMI s.v.p. of government and public affairs John J. Motley III. "It is a critical step to help disable the sophisticated gangs that commit these crimes. The measure will help protect the safety of American consumers from gangs that adulterate products before reselling them."

    Motley added that the legislation "would unmask these [otherwise anonymous] thieves and hold Internet auctioneers accountable for failing to help identify criminals who exploit their sites."

    Organized retail crime gangs steal over $30 billion in products annually, according to the FBI. The gangs target such high-cost items as baby formula, cold medicines, razors, DVDs, teeth-whitening strips, smoking cessation kits.

    By reselling the products on Internet auction sites, gangs get an average of 70 cents on each dollar of the retail price, vs. 30 cents for items fenced through pawn shops and flea markets, loss prevention experts say.

    The new legislation requires Internet auction sites to disclose the name and contact information of high-volume resellers, defined as those with sales of at least $12,000 in 12 months, or $5,000 from a single item, and block their access to the site if there's good reason to believe the items being sold were stolen.

    The legislation requests the Justice Department to "vigorously prosecute" such resellers under the federal criminal code, as well as Internet auctioneers that fail to get the required contact information or know about high-volume users of their sites that are reselling stolen goods.

    Victims of e-fencers could also potentially bring civil actions against resellers and Internet auctioneers.

    The Scott legislation is somewhat similar to provisions in the Organized Retail Crime Act of 2008 (H.R. 6491), which was introduced July 15 by U.S. Reps. Brad Ellsworth (D-Ind.) and Jim Jordan (R-Ohio).

    As a member of the Coalition Against Organized Retail Crime, FMI has been leading efforts to combat organized retail crime for years at the state and federal levels.

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