E-commerce - America's Marketplace For Fakes, Fraud, and Scams

Amazon, eBay, Walmart, Wish, and Newegg are easy platforms to deceive and defraud consumers.

February 10, 2021, Los Angeles, CA – COVID-19 has changed consumer behavior and shopping patterns catapulting e-commerce websites into worldwide juggernauts disrupting national and international retail frameworks. The staggering simultaneous sales growth of the unchecked $1.3 trillion global counterfeit criminal enterprise will far outlast the pandemic. The consequences of an inexhaustible supply of fakes, fraud, and scams will impact virtually every business and consumer.

Online fraudsters have found that e-commerce websites, including Amazon, eBay, Walmart, Wish, Newegg, and others, are easy and accessible platforms to deceive and defraud consumers with little consequence and big profits. Consumers spend good money on poor-quality or dangerous products with unknown manufacturing standards and no warranty. Legitimate manufacturers and retailers are destroyed while people are being injured or killed.

The web giants argue that they are not the seller and therefore cannot be responsible for any liabilities from third-party sellers, yet take a transaction fee for each item sold. Courts have yet to find Amazon and other online retailers liable for selling fake products on their sites because the companies have successfully argued that they are the platform for sellers rather than a seller itself, thereby skirting liability.

Amazon, Walmart, and Newegg are also direct sellers of counterfeit and fraudulent items, and some Amazon fakes even carry the "Amazon's Choice" endorsement. eBay and Wish host only third-party marketplace sellers, many from China. Consumers are faced with paid and manipulated product and seller reviews, further exacerbating consumer decision making.

While watchful for counterfeit watches, handbags, sunglasses, shoes, and pirated music and video, most consumers may be surprised to learn that the adage "if someone makes it, someone fakes it" can apply to any purchase. Could you spot a counterfeit, fraudulent, or fake item? Probably not.

The items below are a few examples of just some online fake and fraudulent goods consumers wouldn't suspect. Yet, after thousands of complaints, many remain.

(Photo: ©The Counterfeit Report)

The various micro SD® memory cards shown were never licensed by SD-3C, LLC, the right holder of the microSD® trademark, and never produced in any legitimate product line in the format and capacities shown. Counterfeit Apple® brand chargers have a fire risk. Composite Resources, Combat Application Tourniquet® (C-A-T®), has been supplied to the U.S. Military, police, first responders and the public worldwide for the past decade. Counterfeit versions of the C-A-T tourniquet have catastrophically failed during actual life-saving applications. The Los Angeles Police badge is the most recognized badge in the world. Counterfeit law enforcement badges are widely available online and available to child predators, terrorists, and other criminals. Counterfeit versions of the P&G Align pro-biotic were sold on Amazon. EO Tech's Holographic weapon sights are popular with counterfeiters. Counterfeit LEGO® toys are almost indistinguishable to the untrained eye and dangerous for children. Fullips® counterfeit beauty product is not made from food-grade plastic and may be toxic or carcinogenic. Poor quality counterfeit Skunk2® shift knobs are available in colors not made by the manufacturer. Counterfeit Auto-Meter Sport Comp II tachometers are sold at a fraction of the genuine item -- but they don't work. Authentic Dr. Numb is not made in the 10g size shown here. Counterfeit Dr. Numb® 5% Lidocaine Cream submitted for ingredient testing did not contain any Lidocaine as indicated, but Tetracaine, a potentially fatal drug. VANS® does not make iPhone 6-11 cell phone cases, but the fakes sold online still support criminals. OTC anti-fungicide medication Lamisil® is not sold in the liquid form shown, but fake (ingredients unknown) Lamisil products are sold on Amazon and eBay. Fraudulent 18650 Li-ion batteries are widely uses in computers, tools, toys, flashlights and vape devices. There is no legitimate 18650 battery over 3800mAh, but hundreds-of-thousands of fakes with wild capacity claims and an explosion and fire risk are sold online. Amazon is facing a federal class-action lawsuit for the fraudulent sales, yet allows the dangerous items to remain. Counterfeit Bear Grylls® Ultimate hunting knifes are visually deceptive and may fool unsuspecting consumers. The poor quality fake used in the photo cracked during the photo shoot.

The Counterfeit Report, an award-winning consumer advocate and industry watchdog, has removed over 400 million counterfeit items offered on e-commerce websites, including Amazon, Walmart, eBay, Wish, and Newegg. Still, the problem has spiraled out of control as website brand-protection programs are ineffective, dysfunctional, or deliberately obstructive.

Amazon is the only U.S. company named on the U.S. Government's counterfeit and pirated goods "Notorious Markets List." A Wall Street Journal investigation revealed that Amazon has listed "thousands of banned, unsafe, or mislabeled products," from dangerous children's products to electronics with forged certifications as well as trash recovered by dumpster-divers. Three United States Senators are demanding Amazon recall hazardous "Amazon Basics" labeled products after an investigation revealed the products melted, burst into flames, or exploded. CNBC found that Amazon has shipped expired foods—including baby formula—to customers, pointing to an inability to monitor something as basic as an expiration date. 200,000 brands are fighting fakes on Amazon, and as a result of Amazon's unwillingness to stop counterfeit goods, Nike announced that it stopped selling on Amazon.

eBay has migrated from the auction house of garage sale items to a global third-party "Marketplace" seller model. Unvetted sellers are about 80% of eBay business and can sell just about anything they want on eBay, including fake and fraudulent items. Six former eBay executives and employees pled guilty to federal conspiracy charges after they led a vicious cyberstalking campaign against a couple they believed to be critical of eBay's online e-commerce practices. eBay banned The Counterfeit Report after it exposed thousands of counterfeit and fraudulent eBay listings.

Walmart is not the legitimate, safe source of products that consumers may believe. Walmart's push to capture a portion of the exploding e-commerce marketplace exposes a seedy and dishonest practice -- the sale of counterfeit, fraudulent, and replica products. In addition to the third-party sellers who offer counterfeit and replica products on Walmart.com, Walmart is also a direct seller of fraudulent and counterfeit items.

Wish built its fast-growing e-commerce businesses by offering a vast range of products that are "discounted" as much as 90 percent. Consumers may be attracted to the low prices however, many items are counterfeit, fake, or replica items from China and take weeks, or over a month for delivery. "Lots of the stuff on Wish is trashy, shoddy, even fraudulent," says Forbes.

Newegg is an American company and direct retailer of items, including computer hardware and consumer electronics. Newegg also enables marketplace sellers, many from China, to offer counterfeit, fraudulent, and replica items. Counterfeit computer memory is not uncommon, and marketplace offerings have expanded to counterfeit auto diagnostic equipment, beauty products, first-aid devices, and fraudulent batteries.

A U.S. Government Accountability Office ("GAO") undercover investigation of e-commerce counterfeit goods sales revealed that about 50% of the items it purchased from eBay, Walmart, Newegg, and Amazon were counterfeit.

E-commerce sites are not better marketplaces that serve consumers. They are no more than arenas of creative destruction, leaving consumers on their own to sort the legitimate, honest sellers from all the bad actors under an umbrella of legal immunity. Until the law changes, the bottom line is that e-commerce platforms have no incentive to stop the abundance of counterfeit products sold on their platforms -- they make too much money.

When it comes to buying products on  Amazon, eBay, Newegg, Walmart, and Wish, remember the proverb -- buyer beware.