How scammers trick you into buying counterfeit items and steal billions from your pocket
The following is a news release from the Better Business Bureau.
IDAHO FALLS – We all shop online. Whether we’re loyal Amazon customers, Groupon groupies, or simply Google the goods and services we need, the internet is one big network of boutiques and box stores selling everything you need.
A new in-depth study released by your Better Business Bureau this month finds that fake consumer goods are ubiquitous, difficult to tell apart from the legitimate products they are counterfeiting, and stem from a large network of organized criminals and credit card processing mechanisms that are willing to support them.
Counterfeit goods mimic original merchandise, right down to the trademarked logo, but are made with inferior products and workmanship. Research shows that one in four people have bought something online that turned out to be a fake.
Scammers can create counterfeit products of nearly everything, too.
A BBB investigative study finds that any shippable item with a reputation for quality and sizable markup is a candidate for counterfeiting. While counterfeit goods often are reputed to be deeply discounted, in reality, counterfeit sellers regularly use selling prices that are close to the price of the real product, so the prices offered are no longer a signal that the product is counterfeit.
The cost of counterfeiting affects not only consumers who lose money by receiving products not as advertised, but also the broader U.S. economy. The report finds that counterfeiting and intellectual property piracy costs the U.S. economy $200-$250 billion and 750,000 jobs annually.
In the last three years, BBB has received more than 2,000 complaints and more than 500 Scam Tracker reports from people who have shopped for goods online and received counterfeits instead of what they ordered.
One victim told BBB he saw a Facebook ad for a popular drone with a reputation for quality. The website on which it was advertised looked professional, contained pictures and videos from a well-known drone company, and included many positive comments and reviews. He purchased the drone he was interested in for about $200 as part of a clearance sale. The man told us that a week later, he received a cheap, plastic toy drone whose value he estimated at about $10. He emailed the company to complain, but said the company never responded.
Eighty-eight percent of counterfeit goods come from China and Hong Kong, according to BBB’s report. Smuggling counterfeit goods and online sales via fraudulent websites are believed to be coordinated by internationally organized crime groups. Counterfeit goods are almost always paid for with a credit card. The fraudulent websites that process these sales make extensive use of the credit card and banking system, with a small number of Chinese banks and an extensive network of intermediary payment processors responsible for processing real money for fake goods.
Efforts are being made to fight the flood of counterfeit goods. BBB is working to identify and report on bogus businesses, especially if they claim to be located in the U.S. and Canada.
Victims can file complaints at bbb.org about online sellers that claim to be in the U.S. or Canada. To file a report about being scammed, visit bbb.org/scamtracker. A full copy of the BBB study is also available by clicking here.