Online Holiday Shopping Yields Record Levels Of Fraud

SOUTHFIELD (WWJ) – Noting how consumers have embraced online shopping this holiday season, the Consumer Fraud Center said holiday shoppers went off a “shopping cliff” in terms of being ripped off by counterfeit and fake goods sold by cybercriminals this year in excess of $2 billion for the period of November-December 2012.

James Lee, executive director of the Consumer Fraud Center, said shoppers went online with a vengeance this year looking for bargains and many fell prey to cybercriminals.

“We saw the heaviest counterfeiting in clothing, accessories, drugs, toys, electronics, personal care and beauty items and CDs, DVDs and video games,” he said in a statement.

Lee cited data from comScore, which saw 16 percent growth in online shopping from last year with almost $40 billion in goods bought online by consumers this holiday season.

Lee said the Consumer Fraud Center and other anti-piracy organizations, such as the International Anticounterfeiting Coalition, have tracked the steady growth in the global trade in counterfeit and fake goods as a percentage of total global trade from 1.85 percent in 2000 to almost 5 percent last year — amounting to $600 billion in counterfeit goods.

“It’s staggering to see how quickly cybercriminals have adapted to online sales, especially exploiting weaknesses in the international supply chain such as using Amazon Marketplace’s direct shipping initiative and Amazon Pages to build illegitimate stores on legitimate websites,” said Lee.

Lee said they estimate the growth in counterfeit sales to double each year unless stopped either by retailers acting voluntarily to halt these sales, or through federal and state governments enacting more rigorous consumer protections.

If a consumer did buy a counterfeit or fake item online, the Consumer Fraud Center urges consumers to immediately dispute the charge with their card issuer or PayPal and report it immediately to appropriate law enforcement agencies such as the Internet Crime Complaint Center or the Consumer Fraud Center’s complaint system.

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