Durbin, others, propose new rules for online auctioneers

U.S. lawmakers, including Illinois Senator Richard Dubrin, are preparing to introduce three bills this week tightening reporting rules for online auctioneers to prevent the fencing of stolen goods over the Internet.

Durbin and representatives Brad Ellsworth of Indiana and Bobby Scott of Virginia plan to submit the bills Feb. 25, according to staff members. All three legislators are Democrats.

The measures would strengthen federal penalties for organized retail crime and in some cases hold Internet companies responsible for offering stolen goods if they could have prevented the transactions, said Stuart Ingis, a partner at law firm Venable LLP and counsel to the Coalition Against Organized Retail Crime, which includes retailers, drugmakers and other consumer-product companies.

Target Corp., the second-largest discount chain, said organized retail theft started increasing a few years ago as online auction sites grew in popularity. High-end electronics and appliances are popular with the theft rings, spokeswoman Erika Svingen said today in an interview. Target is supporting the bills.

The laws would require online outlets to monitor and report suspicious activity and maintain records for high-volume sellers for at least three years, the staff members said.

Gangs have become more involved selling stolen goods over the Internet because it's less risky than peddling illegal drugs and offers high rewards, according to Paul Jones, executive vice president of asset protection at the Retail Industry Leaders Association, an Arlington, Virginia-based trade group.

Consumers eager to save money during a recession may wind up buying unsafe stolen goods, including baby formula and test strips to monitor blood sugar, Jones said in an interview Feb. 20. The goods may not have been stored properly before being sold online, he said.

U.S. retailers spend about $12 billion a year to prevent thefts, according to Jones.