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An in-depth investigative study by Better Business Bureau (BBB) finds fraudulent 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.
Research shows that eight in 10 Americans shop online, and the dominance of online retail means nearly anything can be bought online, sometimes at discounts that seem too good to be true. However, nearly anything available online can be counterfeited, and research also shows that one in four people have bought something online that turned out to be counterfeit.
The investigative study – “Fakes Are Not Fashionable: A BBB Study of the Epidemic of Counterfeit Goods Sold Online” – looks at the prevalence of counterfeit consumer goods and the criminal systems that circulate them. The study digs into the scope of the problem, who is behind it, the multi-pronged fight to stop it and the steps consumers can take to avoid it.
The risk of encountering counterfeit goods can affect any online shopper. These goods range from brand-name sunglasses and handbags to golf clubs and consumer electronics, as well as many other kinds of products. The BBB’s report 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 BBB’s report finds that counterfeiting and intellectual property piracy cost 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 across the U.S. and Canada from people who have shopped for goods online and received counterfeits instead of what they ordered. The Federal Bureau of Investigation’s (FBI) Internet Crime Complaint Center (IC3) processed 2,249 complaints about counterfeit goods (including pirated goods) in 2018, while the Federal Trade Commission (FTC) processed 552 complaints representing a total financial loss of more than $752,000. That being said, many victims do not file complaints, making it difficult to get a firm grasp on how often people pay for goods that are counterfeit or not as advertised.
According to BBB’s report, 88% of counterfeit goods come from China and Hong Kong, with their smuggling and their online sale via fraudulent websites widely thought to be coordinated by international organized crime groups.
What to do if you believe you have unwittingly purchased counterfeit goods:
Ask for a refund. Victims who don’t receive anything when buying online with their credit card, or who receive goods that are counterfeit or not as described, should call the customer service number on the back of their card and request a refund. The report goes into great detail about the process of obtaining a refund and the remedies available to victims.
Report counterfeit goods. Victims can file complaints at bbb.org about online sellers that claim to be in the U.S. or Canada. BBB tries to resolve complaints and may help in getting a refund. There is no cost for this service. BBB also looks for and reports patterns of complaints. Consumers can report scams to BBB Scam Tracker at https://www.bbb.org/scamtracker/us/
