eBay - Scams, Shams and Sleight of Hand

Rife with counterfeits and complaints, e-Commerce sites need regulation

March 9, 2015, Los Angeles, CA – e-Commerce websites are an ideal platform for a $1.7 trillion global criminal enterprise to distribute their counterfeit goods to unsuspecting consumers. eBay^® is no exception.

Last week, the US Securities and Exchange Commission (SEC) launched an inquiry when China’s government accused e-commerce giant Alibaba of selling fake goods, bribery and other illegal activity.

But, one doesn’t need to look overseas to see counterfeit product distribution, it’s right here at home in the USA.  

Despite eBay’s (EBAY) often quoted policy and claim “You can't list replicas, fakes, counterfeits, or other illegal copies on eBay”, The Counterfeit Report^®, a watchdog and consumer education website, easily purchased hundreds of name brand counterfeit products including OTC drugs, sporting goods, auto parts, children’s toys and electronics from eBay sellers. The test purchases have yet to produce an authentic brand name product.

Changes were expected after eBay publicly admitted to The Counterfeit Report’s allegations of altering feedback, blocking accounts, overturning refund settlements and removing counterfeit comments and warnings protecting consumers from dishonest sellers, counterfeits and dangerous products. But months later, the practices remain.

Could you identify these fake products purchased on eBay?

(photo credit: ©The Counterfeit Report)

1. Monster^® branded Tron T1 headphones look deceptively authentic and sell for up to $400 on eBay, except Monster never produced this product – it is a fake. 
2. This Gerber Bear Grylls^® Folding Sheath Knife can easily be confused with the authentic product, but it is a counterfeit and does not have the Gerber Lifetime Warranty.
3. An aluminum LUNATIK^® $100 iPhone cell phone case is a bargain for just $20, except LUNATIK makes authentic cases from a ballistic polymer, not aluminum. And, this model was never produced for the iPhone6 or in red – it is fake.
4. The counterfeit packaging and bottle look just like the authentic men’s Polo^® product, but fragrance users would be alarmed to learn that lab tests found that counterfeit fragrance ingredients included urine, bacteria, lead and antifreeze.
5. Counterfeit versions of the very popular children's Rainbow Loom^® craft kits are unsafe for children, may shatter into sharp edges and have not been tested in accordance with U.S. Toy Safety Standards.
6. This counterfeit lower control arm for Honda/Acura automobiles is critical in keeping the rear wheels attached to the vehicle. The authentic Group-A Autosports part is forged from aircraft-quality 2024 billet aluminum. Your life rides on whatever this counterfeit is made from.
7. Packaged identically to authentic Samsung^® microSD memory cards, this fake 128GB SDHC card clams a capacity not available in the industry, or meeting the SDHC standard. It is a fake and will likely destroy your data and photos.  
8. Counterfeit iPhone^® chargers displaying the "Apple" trademark and a counterfeit Underwriters Labs (UL)^® Mark deceive consumers into believing they are receiving authentic, safe Apple products. In this case, fake can be fatal. The eBay seller of this counterfeit product has over 45,000 eBay sales.

eBay does have a buyers protection policy, which is boldly emblazoned on each eBay listing page and in confirmation emails;

“Get the item you ordered or get your money back. Covers your purchase price and original shipping”

But, how protected is the eBay consumer? ...

The Counterfeit Report^® found a gauntlet of obstacles, contradictory instructions, arbitrary decisions and obstructions for consumers in eBay's counterfeit product dispute resolution process. The Counterfeit Report's eBay investigation, test purchases and over 100 dispute cases revealed;

• eBay purchasers simply just don’t recognize they have received a deceptive counterfeit.
• When a counterfeit product listing is identified or removed, eBay doesn’t notify prior buyers they may have received a counterfeit, dangerous, or possibly deadly product. Additionally, they may be entitled to a refund through eBay's buyer protection program.
• eBay presents consumers only one option if they receive and can actually identify a counterfeit – return the product.  But, trafficking in counterfeits or returning counterfeit products to the seller is violation of US law, US Postal Regulations, and in conflict with eBay policy. Returned counterfeits can easily be recycled and resold to the next unsuspecting consumer (generating more eBay transaction fees).
• To overcome eBay's return demand, consumers can spend hours on the phone waiting for a woefully understaffed customer service department. (eBay handles 60 million disputes a year)  
• eBay service reps often ignore the manufacturer's website counterfeit information and the Counterfeit Product Alerts^® published by The Counterfeit Report that aid and warn unsuspecting consumers about fake and dangerous products.
• eBay blocked the posting of the Counterfeit Product Alerts, while in contrast, Amazon^® (AMZN) embraces the alerts to screen and remove counterfeit listings before they reach Amazon consumers.
• eBay often allows counterfeit sellers to remain, but permits them to block buyers, like The Counterfeit Report, from making test purchases.
• eBay demands written confirmation from the manufacturer even on products that never existed in the manufacturer’s product line or are identified as counterfeit on the manufacturers website.  Consumers are afforded just 3-5 days to obtain, convert and upload the confirmation to eBay in .pdf file format to obtain a refund -- a daunting and virtually impossible task for any consumer.
• If the manufacturer’s confirmation is successfully obtained, eBay then requires a signed and returned declaration that the counterfeit evidence is “destroyed and discarded” before a refund is granted. However, destroying evidence is a crime.  
• The Counterfeit Report observed that after promptly reporting counterfeits, the sellers and listings often remained, and counterfeits could be purchased again by unsuspecting consumers.
• Negative “Counterfeit” feedback posted for the sellers to warn and protect other consumers would sometimes just “disappear.” eBay blocks buyers from leaving negative feedback for eBay “power sellers” for 7 days.
• Seller feedback is not an indication of product authenticity or seller credibility. 

With almost $3 billion in profits, eBay’s consumer protection efforts are woefully inadequate. Regulation of the e-commerce industry is severely lacking, leaving unknowing consumers unprotected and vulnerable. eBay may want the counterfeit problem to go away, but not the transaction fees.

Buyer beware.