An in-depth BBB investigative study finds that 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. 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. It 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.
Research shows that 8 in 10 Americans shop online; the risk of encountering counterfeit goods can affect any online shopper. Nearly anything available online can be counterfeited. BBB’s report finds that any item with brand recognition and a reputation for quality is a candidate for counterfeiting. While these knock-off goods are advertised as deeply discounted, in reality, counterfeiters often use prices that are close to the cost of the real product, so low prices are no longer a signal that the product is counterfeit.
In the last three years, BBB has received over 2,000 complaints and more than 500 Scam Tracker reports from people who received fakes instead of what they ordered. The FBI’s Internet Crime Complaint Center (IC3) processed 2,249 complaints about counterfeit and pirated goods in 2018, while the FTC processed 552 complaints. Many victims don’t even file complaints. The cost of counterfeiting affects not only consumers, but also the broader U.S. economy. BBB’s report finds that counterfeiting and intellectual property piracy cost the U.S. economy $200-$250 billion and 750,000 jobs annually.
According to the BBB report, 88% of counterfeit goods come from China via Hong Kong, with their smuggling and their online sale via fraudulent websites widely thought to be coordinated by international organized crime groups. Customs agents seized $1.2 billion in counterfeit shipments in 2017; the most current year data is available.
The BBB recommends consumers check the reputation of the seller at bbb.org and also contact the manufacturer for a list of authorized sellers.
If you believe you’ve 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.
Report counterfeit goods to BBB: 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.
Contact one or more of the following: Federal Trade Commission: You can complain to the FTC by calling 877/FTC-Help or file a complaint online. Online markets: Victims can complain directly to eBay, Amazon, Facebook and Instagram or other online marketplaces. In addition, Amazon has an “A-Z guarantee” for goods sold by third parties on their site; victims who have purchased counterfeit items from a third-party seller can seek a refund here. Internet Fraud Complaint Center (IC3): The FBI takes complaints about counterfeit goods. Complain here. National Intellectual Property Rights Coordination Center: U.S. Immigration and Customs Enforcement (ICE) asks victims of counterfeit goods to file a complaint with the IPR Center here.