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BBB Study: Counterfeit products in online retail


BBB Study: Counterfeit products in online retail

An in-depth investigative study by Better Business Bureau (BBB) finds that fraudulent consumer goods are ubiquitous, difficult to tell apart from the legitimate products they are counterfeiting, and stem from a large network of organized criminals and credit card processing mechanisms that are willing to support them.

Today nearly anything available online can be counterfeited, and research also shows that one in four people have bought something online that turned out to be counterfeit.

The investigative study, “Fakes Are Not Fashionable: A BBB Study of the Epidemic of Counterfeit Goods Sold Online,” looks at the prevalence of counterfeit consumer goods and the criminal systems that circulate them. It digs into the scope of the problem, who is behind it, the multi-pronged fight to stop it and the steps consumers can take to avoid it. BBB’s report finds that counterfeiting and intellectual property piracy cost the U.S. economy $200-$250 billion and 750,000 jobs annually. You can read the entire report here: https://www.bbb.org/article/news-releases/19860-fakes-are-not-fashionable-a-bbb-study-of-the-epidemic-of-counterfeit-goods-sold-online.

“Counterfeit goods hurt both consumers and businesses,” said Phil Catlett, President of the Better Business Bureau Serving Western Michigan. “Customers get an inferior product, or nothing at all, and legitimate businesses lose out on the sale of real products.”

The risk of encountering counterfeit goods can affect any online shopper. These goods range from brand-name sunglasses and handbags to golf clubs and consumer electronics, as well as many other kinds of products. BBB’s report finds that any shippable item with a reputation for quality and sizable markup is a candidate for counterfeiting. While counterfeit goods often are reputed to be deeply discounted, in reality, counterfeit sellers regularly use selling prices that are close to the price of the real product, so the prices offered are no longer a signal that the product is counterfeit.

In the last three years, BBB has received more than 2,000 complaints and more than 500 Scam Tracker reports from people who have shopped for goods online and received counterfeits instead of what they ordered. However, many victims do not file complaints, making it difficult to get a firm grasp on how often people pay for goods that are counterfeit or not as advertised.

A woman from Paw Paw alerted the BBB to a website selling fake Ray Ban sunglasses. The website offered sunglasses for just $20. The real sunglasses retail for $200 or more at legitimate stores and websites. A law firm representing Ray Ban has worked through the courts to shut down this and similar websites. However, the fraudulent sites keep reopening under different names.

“This was just one of thousands of websites offering designer sunglasses at too-good-to-be-true prices,” said Catlett. “Most customers who placed orders never received their product.”

A man from Kalkaska had a similar experience with a company advertising handmade quilts. Advertising on Facebook and other social media sites, Amelia Quilt was a popular offer around Christmas, 2018. It offered quilts at significant discounts. However, customers across the country tell the BBB they paid for the quilts, but never received the product. After BBB warnings to consumers, the company stopped accepting orders and eventually shut down its website.

According to BBB’s report, 88 percent of counterfeit goods come from China and Hong Kong, with their smuggling and their online sale via fraudulent websites widely thought to be coordinated by international organized crime groups. Customs agents seized $1.2 billion in counterfeit shipments in fiscal year 2017, the most current year for which data is available; however, shipping and smuggling methods vary widely, creating major headaches for customs officials. Inasmuch as counterfeit goods are almost always paid for with a credit card, the fraudulent websites that process these sales make extensive use of the credit card and banking system, with a small number of Chinese banks and an extensive network of intermediary payment processors responsible for the vast majority of processing for these purchases.

Active efforts are being made to fight the flood of counterfeit goods. BBB attempts to identify and report on bogus businesses, especially if they claim to be located in the U.S. and Canada. Trademark holders also do a great deal of work and spend a considerable amount of money trying to fight counterfeits. This is a major priority for customs officials and law enforcement as well; U.S. Customs and Border Protection has increased its seizures of counterfeit goods by 125 percent over the last five years, and the White House recently issued an executive order directing government agencies that work with brands to examine counterfeiting and make it an enforcement priority.

The report recommends:

-BBB urges the credit card payment processors to engage their full efforts in combating those that provide merchant accounts to sellers of counterfeit goods.

-U.S. consumers would benefit from a program to help counterfeit victims with charge backs like the one operated in Canada by the Canadian Anti-Fraud Centre (CAFC). Such a program could help identify fraudulent credit card merchant accounts, bogus websites, and possibly locations from which such goods are being shipped.

-Law enforcement agencies could make better use of complaint information obtained by BBB, the FTC, and IC3.

-More study and investigation is needed for websites in China that deliver nothing or where goods are sold deceptively—even if there is no trademark or copyright involved.

-BBB recommends consumers check the reputation of the seller before making payment at bbb.org and contact the manufacturer for a listing of authorized sellers.

What to do if you believe you have unwittingly purchased counterfeit goods:

-Ask for a refund. Victims who don’t receive anything when buying online with their credit card, or who receive goods that are counterfeit or not as described, should call the customer service number on the back of their card and request a refund. The report goes into great detail about the process of obtaining a refund and the remedies available to victims.

To report counterfeit goods contact one or more of the following:

-National Intellectual Property Rights Coordination Center: U.S. Immigration and Customs Enforcement (ICE) asks victims of counterfeit goods to file a complaint with the IPR Center here: https://www.iprcenter.gov/referral/view

-Better Business Bureau: Victims can file complaints at bbb.org about online sellers that claim to be in the U.S. or Canada. BBB tries to resolve complaints and may help in getting a refund. There is no cost for this service. BBB also looks for and reports patterns of complaints. Consumers can report scams to BBB Scam Tracker.

-Online markets: Victims can complain directly to eBay, Amazon, Facebook and Instagram or other online marketplaces. In addition, Amazon has an “A-Z guarantee” for goods sold by third parties on their site; victims who have purchased counterfeit items from a third-party seller can seek a refund here: https://www.amazon.com/gp/help/customer/display.html?nodeId=201889740.

-Internet Fraud Complaint Center (IC3): The FBI takes complaints about counterfeit goods. Complain here: https://www.ic3.gov/complaint/default.aspx

-Federal Trade Commission: You can complain to the FTC by calling 877/FTC-Help or file a complaint online at https://www.ftccomplaintassistant.gov/#crnt&panel1-1.

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Business ceases operations without customer notice


 

From the Better Business Bureau

Since mid-September, more than 23 people have filed complaints with the Better Business Bureau against Secure Beginnings LLC, after paying for a SafeSleep Breathable Crib Mattress, but receiving nothing. Secure Beginnings, LLC is a Michigan based business that has marketed patented “breathable” crib mattresses online and through a number of retail resellers, since 2010.

Consumers report that they placed their orders and Secure Beginnings or other retailers selling the product charged their credit cards, but they never received the merchandise. In several complaints and customer reviews, consumers say they repeatedly tried to contact the company without getting their issues resolved. 

BBB has received over 40 complaints from residents in 26 states since the company opened in 2015. Through August 2017, the business was responsive to all consumer complaints. BBB has had repeated conversations with the company founder, Julie Andreae, since September 2017, when a delay in complaint resolution first became apparent. 

Based in part on information provided by the founder of Secure Beginnings, Julie Andreae, BBB has now concluded that Secure Beginnings has ceased online operations. The company website https://www.securebeginnings.com/ is no longer available. Secure Beginnings’ SafeSleep products are still carried by other retailers, such as Walmart, Overstock.com, Amazon and on EBay. Secure Beginnings claims to have no means of issuing refunds to customers who have not received purchased items. It is unclear whether manufacturer warranties will be honored on SafeSleep products, given the current operating status of Secure Beginnings. 

Consumers who are awaiting arrival of purchases should do the following, immediately:

If purchases were made via credit card, dispute the charges with your card issuer. Contact info for the issuer is generally found on the reverse of your card. Most issuers provide an online means of filing a dispute.

If purchases were made by debit card, you must contact your issuing bank. The process for filing a debit card dispute varies. If the debit card was used “as a credit card,” meaning without supplying your pin number, you may have additional rights. Proof of purchase will be required to open the dispute.

If purchases were made via Paypal, please take the following steps:

• Log in to your PayPal account.

• Go to the Resolution Center.

• Select the dispute you want to escalate, then click Escalate.

• Follow the instructions.

• Click Escalate to a Claim.

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Renters and sellers beware of scammers 


N-Rental-scam-real_estate_signs

By Judy Reed

If you are trying to sell your home, don’t be surprised if someone comes knocking at your door and asks if it’s for rent. Or, if you’ve already moved out and are still trying to sell it, you might come by to find someone living there. That’s because scammers are stealing house for sale listings and putting them up on Craigslist as rentals.

Local realtor Brynadette Powell, with Arthur K. Eggerding Realty, said this happened to a home she had listed recently on Hoskins. “The lady of the house was home sick, and she had four people come to the door in two days asking if it was for rent,” she explained. She said the next day she was in a broker class and received three messages saying the home was listed on Craigslist to rent for $1200 a month.

“I sent the info to Craigslist and they took it down in about two hours,” said Powell.

Powell said she emailed the poster of the ad, pretending she was interested. She asked who they were, and they emailed back a form letter saying that they had recently settled in Nigeria, and sent her an application. She was told to send them the first month’s rent and a security deposit and she could move in.

Powell said that sometimes the listers tell people that they moved and forgot to leave a key, and that they can just break in.

“I also just recently had a buyer for another agent’s house, and that listing was also hijacked. There were people trying to break into the house because they thought they had a lease,” she explained.

Powell said that one agent she knows called the police about it. “The agent was told that the people who sent the money had a crime against them, but not the owners,” she said.

It’s possible that people get embarrassed and don’t want to report it, however, or they don’t realize they can. According to the fraud division at the Kent County Sheriff Department, there haven’t been any reports in our area recently, but they are aware of the problem, because it has been around awhile.

Powell said she now tries to avert this type of problem by putting a sign on the door that says, “This house is not for rent.”

Powell said part of the problem is that there are not enough rentals out there to meet demand, especially in Cedar Springs. “Cedar Springs is amazing in regards to people sticking around. There just aren’t enough rentals out there,” she explained.

Phil Catlett, of the Better Business Bureau of Western Michigan, is also aware of the problem. “Scammers look on Craig’s List, or M-Live, or a Real Estate website, and find homes for sale. The scammer creates an ad listing the property for rent. Every year we learn of someone getting ripped off this way,” he said.

Catlett supplied the following info from the BBB:

Researchers reviewed more than 2 million for-rent posts and found 29,000 fake listings in 20 major cities. Of those, there were three key types of scams. In the first, a fake post instructs a would-be tenant to purchase a credit report. The scammer gets a commission from the credit reporting site, even though there is no property for rent.

In another scheme, con artists duplicate rental listings from other sites and post on Craigslist at a lower price. Prospective renters pay a deposit via wire transfer. Another pervasive scam is “realtor service” companies. Targets are asked to pay fees to access listings of pre-foreclosure rentals or rent-to-own properties. In the majority of cases, the companies leading the scams have no connection to the properties listed.

How to Spot a Rental Scam:

  • Don’t wire money or use a prepaid debit card: You should never pay a security deposit or first month’s rent by prepaid debit card or wire transfer. These payments are the same as sending cash – once you send it, you have no way to get it back.
  • Watch out for deals that sound too good: Scammers lure in targets by promising low rents, great amenities and other perks. If the price seems much better than offered elsewhere, it may be a scam.
  • See the property in person: Don’t send money to someone you’ve never met for an apartment you haven’t seen. If you can’t visit an apartment or house yourself, ask someone you trust to go and confirm that it is what was advertised.
  • Don’t fall for the overseas landlord story: Scammers often claim to be out of the country and instruct targets to send money overseas.
  • Search for the same ad in other cities: Search for the listing online. If you find the same ad listed in other cities, that’s a huge red flag.

For More Information

Read the full report from New York University’s Tandon School of Engineering on rental scams on Craigslist. The report is the first systematic study of online rental scams. http://www.prnewswire.com/news-releases/renter-beware-study-finds-craigslist-catches-barely-half-of-scam-rental-listings-300228037.html.

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Be especially mindful with your W-2’s


TAX-W2scam

From the BBB of Western Michigan

Recently a BBB Accounts Payable Staff Member received an email from me, Phil Catlett, CEO of BBB, requesting that she wire money immediately, and to send a reply email to receive further details about where to send the funds. And had she responded to that email it would obviously have never reached me, it’d be headed to some scammer from who knows where.

The past couple of years, BBB has been hearing about scammers targeting W-2 employee tax forms.

W-2 forms have everything needed to file a fraudulent tax refund request, including the employer name, employer ID, address, taxpayer address, Social Security number and information about 2016 wages and taxes withheld.

The IRS just issued a warning that scammers are seeking W-2 information in order to file fraudulent tax refund requests. School districts, healthcare organizations, chain restaurants, temporary staffing agencies, tribal organizations and nonprofits are all mentioned in the IRS information as targets.

It could happen to any of us, but scammers don’t just stop after they get access to your sensitive information. The IRS reports that after they get your personal information, the W-2 scammers send an email to the payroll or comptroller of a company requesting that a wire transfer be made to a certain account.

“This is one of the most dangerous email phishing scams we’ve seen in a long time,” said the IRS Commissioner. “Although not tax related, the wire transfer scam is being coupled with the W-2 scam email, and some companies have lost both employees’ W-2s and thousands of dollars.” It is also being reported that scammers are selling 2016 employee W-2 forms that were stolen from victim organizations, peddling individual W-2 tax records for anywhere between $4 and $20 apiece.

But the simplest and best way for individuals to avoid becoming a victim of tax refund fraud is to file your taxes before criminals do it. To reduce risk of businesses being hit by these frauds, use two-factor authentication for email, such as telephone calls to verify significant banking transactions.  BBB advises that any information about employee activities listed on your websites or in social media can make you more vulnerable as well.

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Scammers use Venmo to fool sellers


 

Trying to make some quick cash, need to sell your items online? Be wary of too good to be true online ads.

From the Better Business Bureau

The money transfer app Venmo can come in handy when you need to pay a coworker back for lunch or send money to friend. Just be wary when using the app with someone you don’t know. Scammers are exploiting it and scamming sellers.

How the Scam Works: 

You are selling a big ticket item (such as a computer, tablet, or car) on Craigslist or another online service. You find an interested buyer, and he or she is ready to make the purchase. But rather than pay with cash, the buyer suggests sending money through Venmo. You’ve used the payment app successfully to transfer money to friends, so you agree.

At first, everything seems fine. You get an alert from Venmo that the buyer sent the money, so you hand over the item. However, a few days pass, and you notice the funds never appear in your account.

It turns out you’ve been scammed. Transfers in Venmo take several days to process. Scammers take advantage of this by setting up transactions and canceling them before they go through. By the time victims realize they’ve never received the money, the scammers are long gone.

How to Avoid a Venmo Con:

Protect yourself when paying with Venmo by following this advice:

Use Venmo with friends: Protect yourself from scams by only using Venmo for its intended purpose—sending money to people you personally know.

Link Venmo to a credit card. As with many other purchases, using a credit card will help protect you if you don›t get the goods or services you paid for. Linking to a debit card or directly to your bank account does not give you that added protection.

Check your account to be sure that the money transferred: It takes a few days for Venmo payments to transfer. If you have any concerns that a payer didn’t really send the money, be sure to check your account directly.

To report a scam, go to BBB Scam Tracker (bbb.org/scamtracker).

 

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BBB Alert: IRS tax collection methods to change


 

The IRS will be hiring private collection companies to collect taxes in difficult cases.

The BBB is alerting consumers that the IRS is now required to use private debt collection companies to collect «inactive tax receivables.»

These include cases where the IRS can’t locate the taxpayer and more than a year has passed without interaction with the taxpayer for purposes of furthering the collection.

The law requires that IRS begin entering into agreements within three months. This provision was in the recent highway funding bill that Congress passed and the President signed into law.

The new law imposes specific reporting requirements on the IRS including an annual report of the number and amount of tax receivables provided to collection contractors, total amounts collected, and collection costs incurred by the IRS.

Also required is a report every two years of an independent evaluation of each private debt collection performance and a measurement plan that compares the best practices used by private debt collectors with those used by the IRS.

The timing of this new law follows a recent Federal Trade Commission crackdown on collections agencies related to questionable tactics used by some collectors.

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Consumers Energy scam


In December 2014, BBB began hearing from consumers who have received calls from someone claiming to be from the “Disconnect Department” of Consumer Energy. The caller stated the consumer was behind on their Consumers Energy bill and that they needed to make payment immediately to avoid disconnection. The company instructs the consumer to purchase green dot money cards for a specific amount due and then to call back once the cards have been purchased. The company provides generic contact names such as Mr. Johnson and Mr. Brown.

BBB contacted Consumers Energy, and they are aware of the scam.  They advised that they do not perform collection in this way and they do not accept payment via green dot money card.  Consumers Energy stated that there is a process that takes place when an account is delinquent:

• Bill is sent to consumer

• If payment not received, second bill is sent to consumer

• If payment is not received, shut-off notice sent to consumer outlining amount due and shut-off date

•If payment is not received, phone call made to consumer

• If payment is not received, service is disconnected

The BBB contacted the company making the calls, and the phone was answered PNG.  When asked what company was reached, we were informed we reached PNG Electric Company. BBB then stated we were trying to reach Consumers Energy and we were informed that they represent Consumers Energy and that we reached the Disconnection Department. When we asked where the company was located, the call was disconnected. During the BBB phone calls to the company, it sounded like a boiler room operations; we could hear several other conversations in the background. BBB has been unable to determine the true identity of the company or individuals making the calls or identify where they are located.

If you receive a call as described above, we suggest you report it to the BBB and the Federal Trade Commission.

Be sure to always research any organization you are considering doing business with by visiting www.bbb.org/western-michigan!

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Beware of call claiming to be IRS


 

From the BBB of Western Michigan

 

For the past weeks many West Michigan residents have been receiving phone calls that purport to be from the IRS, advising them that there is a problem with their federal income tax return. The BBB serving Western Michigan is being informed every day about phone calls supposedly from the IRS that become increasingly threatening, and ultimately demand money from you. The real IRS says they won’t call you, they will communicate by mail.

If you have been contacted by phone by someone claiming to be from the IRS, BBB suggests that you file a complaint at http://www.treasury.gov/tigta/contact_report_scam.shtml.  You can also call 1.800.366.4484.

The IRS says that this is the latest in a series of scams aimed at taxpayers in an effort to steal your identity. They caution that you should avoid giving out personal information over the phone unless you are positive that you have the real IRS on the line. Keep in mind that the IRS does not take tax payments over the phone; however, they have a number of payment options on their website at www.irs.gov.

Additionally, IRS Criminal Investigation does not collect payments of taxes. If you do receive a summons from IRS they’re not going to call you in advance. The IRS is working with the Treasury Inspector General for Tax Administration to try to stop these frauds. The IRS asks taxpayers to be diligent as they work to “protect taxpayers from the ongoing trend of phone scams pretending to be the IRS.”

BBB reminds you that the IRS will never ask you for personal information using email or social media as a first contact: your first contact with the IRS is usually by mail. The IRS won’t ask for payment using a pre-paid debit card or wire transfer or ask for a credit card number over the phone. The IRS also does not ask for PINs, passwords or similar confidential access information for credit card, bank or other financial accounts. And the IRS won’t use threatening language or claim that you’ll be reported to other agencies such as the United States Citizenship and Immigration Services (USCIS) or local law enforcement.

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Warning: What to do about the “Heartbleed” bug


BUS-Warning-Heartbleed-web

By Katherine Hutt, BBB

Unless you’ve been vacationing on a tropical island for the past few days, you’ve likely heard of the “Heartbleed” bug, a computer security vulnerability that can reveal the contents of a server’s memory and expose private data such as user names, passwords and even credit card information.

The Heartbleed bug exploits a flaw in the Secure Sockets Layer (SSL) of popular open source software called OpenSSL. SSL is the standard security technology that establishes an encrypted link between a user’s web browser and the server where a website is hosted. It is used to secure numerous kinds of data transfers, including email, instant messaging, social media, and business transactions. Encryption is essential to Internet security.

The flaw, discovered on April 7 but apparently in existence for two years, means that attackers can copy a server’s digital keys and use them to impersonate servers to decode communications from the past (and, potentially, the future).

For businesses:

BBB recommends that businesses immediately check to see if their website(s) use Open SSL or have been vulnerable. One way to check, recommended by tech/media website CNET, is a tool at https://filippo.io/Heartbleed/ developed by a cryptography consultant. If vulnerability exists, businesses should work with their IT department or computer professional to install a more secure SSL on their websites.

For systems administrators:

Systems administrators should follow the advice of US-CERT, the Computer Emergency Response Team. Although this information comes from the U.S. government, it is applicable to systems in other countries.

For consumers:

CNET has also published a list of the top 100 websites, which it is updating regularly as it checks for vulnerabilities and repairs. Consumers can check this list or use the tool mentioned above to see if websites they regularly use are free of problems, or have fixed vulnerabilities.

It’s also imperative that consumers change passwords on all sites, particularly those that retain personal identifying information. Change your password after confirming that the site is not vulnerable or has fixed its SSL.

The “Stop. Think. Connect.” campaign offers the following suggestions to protect your identity:

Secure your accounts: Ask for protection beyond passwords. Many account providers now offer additional ways for you verify who you are before you conduct business on that site.

Make passwords long and strong: Combine capital and lowercase letters with numbers and symbols to create a more secure password.

Unique account, unique password: Separate passwords for every account helps to thwart cybercriminals.

Write it down and keep it safe: Everyone can forget a password. Keep a list that’s stored in a safe, secure place away from your computer.

Own your online presence: When available, set the privacy and security settings on websites to your comfort level for information sharing. It’s ok to limit how and with whom you share information.

BBB also suggests choosing passwords that are phrases (for instance, ilovetofish) and making each letter O into a zero to make the password more complex. Look into password management software to help you keep track of really “long and strong” passwords.

BBB’s servers do not use Open Source SSL. All of its websites have been checked and found to be free of vulnerabilities.

– See more at: http://www.bbb.org/blog/2014/04/warning-heres-what-to-do-about-heartbleed-bug/#sthash.5DtW50Dn.dpuf

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Scammers capitalizing on tornado victims


From the Better Business Bureau

The Salvation Army released the following warning:

We received word from one of our National Advisory Board members about a robo-call from an organization (no name given) mounting an emergency appeal for funds for tornado disaster relief in Oklahoma. The pitch included specific reference to American Red Cross and Salvation Army, with text along the lines of “The American Red Cross and The Salvation Army are on site working, and we need more funds to keep help coming.” There was an option to press 1 to donate. The call came from phone number 888-981-6499.

Please be advised that this is NOT authorized fundraising of either The Salvation Army or the American Red Cross.  We ask that you please warn your territories and/or Board Members about this scam.”

BBB Serving Western Michigan offers the following basic wise giving tips:

1. Get the Charity’s exact name. With so many charities in existence, mistaken identity is a common problem. Thousands of charities have “cancer” in their name, for example, but no connection with one another.

2. Resist pressure to give on the spot, whether from a telemarketer, door-to-door solicitor or telephone call.

3. Be wary of heart-wrenching appeals. What matters is what the charity is doing to help.

4. Press for specifics. If the charity says it’s helping the homeless, for example, ask how and where it’s working.

5. Check websites for basics. A charity’s mission, program and finances should be available on its site. If not, check for a report at www.give.org.

6. Check with state charity officials. In many states, charities are required to register, usually with the office of the attorney general, before soliciting. Check http://www.nasconet.org/documents/u-s-charity-offices/ for the relevant office in your state.

7. Don’t assume that every soliciting organization is tax exempt as a charity. You can readily check an organization’s tax status at www.irs.gov/app/eos.

 

 

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