Web tool aims to choke payments to rogue sites selling bogus goods

A global coalition of anti-counterfeiting groups hopes to reverse the growth of Web sites selling bogus goods by using online tools and working with financial institutions to choke payments to the rogue sites.

“We are now in discussions with financial institutions and card payment bodies to find ways how online payments to sites identified as selling counterfeit products can be stopped,” said Travis Johnson, vice president of the International Anti-Counterfeiting Coalition (IACC). The Washington, DC-based Johnson was part of a panel in Toronto that discussed the risks associated with faked products. The event was sponsored by Microsoft Corp., one of the companies leading the battle against counterfeit products.

“We have been in the battle for a long time now to realize that you cannot win it by litigating individual violators alone,” said Johnson. “We will be hitting counterfeiters where it hurts – it their wallet.”

Johnson did not identify specific payment agencies they are working with and to what extent discussions have progressed.

Part of the new strategy involves the development of a Web-based system which according to the IACC Web site will “help brands turn the light out on rogue Web sites selling counterfeit online goods.”

No details about the tool where given, except that G2 Web Services, LLC, a United States-based merchant compliance monitoring and risk management service had signed a deal with the IACC to develop the product. Apart from monitoring merchant sites for compliance, G2’s web site says the company specializes in investigating merchant history, sales processes or “connections with other entities.” G2 works with card networks, banks, sales organization and payment services to identify, monitor and mitigate risks posed by their merchant’s online transactions.

Online counterfeiters

Canadian shoppers and SMBs are likely to adopt a “spend less on everyone” strategy this Christmas season, and Microsoft Corp. and anti-counterfeit organizations are worried that in their search for a bargain, buyers will fall prey to peddlers of bogus software and other faked goods.

“We have seen a rising number of small businesses falling prey to online sellers of counterfeit software,” said Chris Tortorice, corporate counsel for Microsoft Canada.

Fraudsters’ strangest schemes on ecommerce sites

“We are talking about business, some of which are involved in technology that should have known better. Yet they are fooled by the slick Web sites and very authentic-looking packaging of the bogus products,” he said.

Special attention is being placed on the online market for faked goods because in recent years, e-commerce has exploded and surveys indicate that many consumers will be using the Internet in one way or the other in relation to their Christmas shopping.

For instance, a survey by Ipsos Reid indicates that 64 per cent of those ages 18 – 34 will make an online purchase during the holiday. While 56 per cent of those 55 and older are concerned with mistakenly purchasing counterfeit goods, only 34 per cent of those aged 18 – 34 are concerned about online deals being too good to be true. Anti-counterfeiting groups age worried that the 68 per cent of consumers aged 35 – 54 who said they would adopt a “spend less for everyone “ strategy this holiday might end up on sites selling bogus goods as discount prices

For businesses worried that they might be buying bogus software, Tortorice has the following advice:

Do your research – Take the time to find out what you are buying and who you are buying from. Check references and get advice from trusted retailers.

Compare the price – Make sure the price quoted in the site is reasonable. Deeply discounted prices are typically red flags for bogus goods. If it looks like the price is too low to be good, you could be looking at a counterfeit product.

Look for flaws – Nowadays counterfeiters are able to produce very convincing replicas of the real thing. But there are some slip ups, according to Tortorice. For example, faked Microsoft Office packaging will say the product was manufactured in the U.S.A. the real software is made in Mexico.

In the case of Microsoft products, Tortorice said, buyers can go to the company’s How to Tell site. Users can report suspicious Microsoft braded software and find out how to tell fake products from the genuine products.

Nestor ArellanoNestor Arellano is a Senior Writer at ITBusiness.ca. Follow him on Twitter, read his blog, and join the IT Business Facebook Page.

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