Online Shoppers Go off "Shopping Cliff" With $2 Billion in

Online Shoppers Go off "Shopping Cliff" With $2 Billion in
Counterfeit and Fake Goods Bought This Holiday Season According to
Consumer Fraud Center 
Record Online Shopping Yields Record Levels of Fraud 
SANTA MONICA, CA -- (Marketwire) -- 12/31/12 --  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
"With a depressed economy and fears of the 'fiscal cliff' looming,
shoppers went online with a vengeance this year looking for bargains
and many fell prey to cybercriminals who racked up over $2 billion in
fraudulent sales in counterfeit and fake goods," said James Lee,
executive director of the Consumer Fraud Center. "We saw the heaviest
counterfeiting in clothing, accessories, drugs, toys, electronics,
personal care and beauty items and CDs, DVDs and video games." 
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. He also noted 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," Lee said. "We estimate the growth in
counterfeit sales will double each year unless stopped either by
retailers such as Amazon acting voluntarily to halt these sales or
through federal and state governments enacting more rigorous consumer
The Consumer Fraud Center detailed some statistics from this season's
holiday shopping: 

--  The National Retail Federation (NRF) estimates total holiday sales to
    rise to $586 billion, even though it represents the smallest increase
    in sales since 2009, the growth in online sales surged and continues
    to grow;
--  The NRF also estimated the retail industry will lose a whopping $2.9
    billion this holiday season from fraudulent holiday returns involving
    online purchases, a total of 4.6 percent of holiday returns;
--  According to MarketMonitor(R), one in five online bargain shoppers
    were duped into shopping on e-commerce sites selling counterfeit goods
    while looking for deals online. Especially troubling was the
    conversion rate -- putting an item into a shopping cart -- for these
    sites being higher than conversion rates for sites selling legitimate
--  With online sales accounting for almost 7 percent of total holiday
    sales, Amazon continues to be the largest e-tailer, accounting for
    over 11 percent of total holiday online sales, an estimated $3.7
--  Amazon continues to spend heavily in expanding its fulfillment program
    (58.1 percent increase in 2011 alone to $4.57 billion), building new
    distribution centers where third-party sellers can direct-ship goods
    from notorious counterfeiting producers in China and Hong Kong.

"We've seen a considerable number of complaints come in from consumers
who have purchased goods from what they thought were legitimate
sellers who set up shop on Amazon," Lee said. "We have forcefully
urged Amazon to revise its practices to join others in the industry
such as eBay and to adopt better consumer protections, but so
far we've only been met by silence." 
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
(, a partnership between the FBI and National White
Collar Crime Center, and the Consumer Fraud Center's complaint system
The Consumer Fraud Center
 The Consumer Fraud Center is dedicated to
uncovering the use of legitimate online portals and shopping
destinations for the sale of counterfeit and fraudulent consumer
goods and products. It relies on its network of activated consumers
who submit reports on counterfeit goods sold on websites to create a
national database of products searchable by consumers, media and law
enforcement. For more information, please visit us at 
James Lee
Media Relations Office
(424) 888-0770 
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