BALTIMORE, MD. The Better Business Bureau (BBB) has received thousands of complaints from people who have shopped for goods online and received counterfeits instead of what they ordered. Sales of counterfeit goods have exploded worldwide in recent years, and many of them pose significant health and safety risks. Organized criminals operating out of China are behind the vast majority of this fraud. These fraudsters are supported by a large ecosystem of groups that arrange for credit card processing. Without access to the payment cards system, most of this fraud could not operate.
Online sales in the U.S. reached $430 billion in 2017 and grew 15% annually for the previous three years, according to a New York University (NYU) study. Roughly eight-in-ten Americans shop online, according to a Pew Research Center study.
The internet has revolutionized how people buy goods by allowing them to quickly find multiple sellers, compare prices and read reviews on the reliability of online sellers. But sites, goods and reviews can all be faked. Anyone shopping online is eventually likely to encounter fraudulent sellers. Studies have found that one in four people have bought something online that turned out to be counterfeit.
Many counterfeit goods are shipped directly from China to consumers in the U.S., but goods also may be sent to the U.S. to be reshipped domestically.
Brand names for products are important indicators of quality and reliability. While many companies protect their products through trademarks and by copyrighting their products’ pictures and descriptions, illegal trademark and copyright use is a growing issue.
A massive number of deceptive web-sellers illegally use copyrighted pictures of brand-name goods, and then send fake items, low-quality substitutes or nothing at all. One expert, Barry Elliott, a senior fraud investigator with the Royal Canadian Mounted Police, estimates this happens in 70% to 80% of online orders.