Consumer Warning - eBay Scams, Shams and Sleight of Hand

Fraudulent sellers, counterfeit goods and deceptive practices await eBay shoppers.

September, 27, 2017, Los Angeles, CA - eBay, once an auction house of garage sale items, has migrated to a global Marketplace new items (80%) at a fixed price (86%) from unvetted global sellers. Included is an avalanche of counterfeit items, dubious practices and fraudulent transactions.

Counterfeit sales have been a lucrative revenue source for eBay, and eBay is proving to be an ideal platform to enable and facilitate counterfeit product distribution. The problem is that anybody, anywhere can open an online e-commerce "Marketplace" account and sell just about anything. Sellers find counterfeiting profitable, difficult to track and widely unpunished, while eBay receives a transaction fee for each fake item sold. By any definition, counterfeiting is stealing.

eBay would like consumers to believe that eBay is a safe place to buy name-brand goods, but that is just not true. In addition to trademark, copyright and patent infringement, is eBay's illusionary claim "You can't list replicas, fakes, counterfeits, or other illegal copies on eBay."

The Counterfeit Report researched and identified over 3.2 million counterfeit items on eBay, and 699,000 reported sold to eBay consumers from just a small sampling of items. The Counterfeit Report also purchased and received over 2,300 products from eBay sellers - all were counterfeit.

After The Counterfeit Report exposed millions of eBay counterfeits, eBay chose not to embrace the findings below and by extension protect eBay consumers, but instead blocked The Counterfeit Report's test purchase accounts. The 5-year research revealed;

• Consumers receive email notifications from eBay encouraging the purchase of known counterfeit and inarguably fake products.
• eBay does not notify buyers they received a fake, including dangerous and potentially deadly items, even after notifications by the right holders.
• In fact, buyers received a deceptive message in their account purchase history for the removed items; "If you've already sent payment, the sale should process as normal and you don't have anything to worry about."
• There may be no indication in eBay seller profiles of a counterfeit sales history, despite some sellers having over 100 counterfeit listings removed by The Counterfeit Report.  eBay publicly admitted to Business Insider as true, allegations of deleting negative feedback and removing counterfeit comments and warnings.
• The Counterfeit Report sent hundreds of email reports, press releases and warnings to eBay senior executive staff for counterfeit FBI, Secret Service and other Law Enforcement Badges and ID listings. A year later, the items remain.
• After counterfeit complaints were submitted, authorized by the right holders, sellers usually remain, and some even continue to repeatedly sell the same counterfeit items.
• Despite repeated complaints by the registered and eBay approved right holders, listing are not removed immediately, but may remain for days or weeks, or (suspiciously) until all the listed items are sold.
• When buyers do complain, eBay directed consumers, as a condition of a refund, to return the counterfeits to the seller - where they can easily be resold.
• A recently unsealed FBI affidavit revealed ISIS funneled money to an alleged ISIS operative in the U.S. through fake eBay transactions,
• eBay has skirted secondary liability for enabling and facilitating the sale of counterfeits.

Consumer awareness is only part of the global solution; trade restrictions, legislation, secondary liability sanctions and severe penalties are needed to arrest the e-commerce counterfeit underground economy destroying U.S. commerce. Consumers are best advised to avoid trademarked items from unauthorized sellers on eBay and buy directly from the manufacturer or authorized retailers.

Companies that facilitate criminal activity and profit from dishonest sales which impact consumer safety, jobs and public trust create a public perception of deception and impunity. However, their reputation damage is only a small part of the problem: the value of counterfeit and pirated goods is forecast to grow to $2.8 trillion, and cost 5.4 million net job losses¹ by 2022, while manufacturer's brand integrity is tarnished or destroyed.

Consumers purchasing counterfeits online are supporting terrorists and criminals, and destroying jobs while receiving little, if any, value in return. How should consumers react to eBay's practices and deceptive behavior?

The U.S. Congress, The Office of the United States Trade Representative (USTR), and the current Administration all have the authority and power to take action.

Will they?

Footnote:
¹ THE ECONOMIC COSTS OF COUNTERFEITING AND PIRACY
The report was prepared for The International Chamber of Commerce (ICC BASCAP) and The International Trademark Association (INTA)
January 2017
Frontier Economics, Ltd.