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More Than Just Unauthorized Sales: Scammers are Creating Whole New Websites

January 20, 2023
ecommerce

We have written extensively about the problem of unauthorized resellers. These are resellers that source a company’s products (whether legitimately or illegitimately) and then resell those products on eCommerce websites such as Amazon, eBay and Walmart.

Often, these resellers are selling used, returned or damaged goods. Unauthorized resellers generally do not handle products with the same care as brands (or their authorized resellers) do, and frequently, products sold by unauthorized resellers do not come with the manufacturer’s warranty. Unauthorized sellers also routinely undercut brands on pricing.

Resellers Are Creating Fake Websites to Scam Customers

This is all to say that unauthorized resellers are bad for business. Not only do they cut into profits, but the manner in which the goods are sold hurts a brand’s image, infringes on its intellectual property and ultimately results in a poor customer experience. And because the products are sold anonymously online, the customer relates that poor experience not with the unauthorized reseller, but with the brand itself.

There are ways to combat unauthorized resellers, but brands are now facing a new form of unauthorized reseller. Resellers are not just selling on third-party sites; instead, they are creating whole new websites that have the look and feel of a brand’s website, but are in fact fake sites designed to scam customers.

Typically, scammers will buy ads on social media sites, offering huge discounts or sales on products to entice users to visit what appears to be a legitimate website. Unwitting users than go to these websites and purchase products, thinking they are buying directly from the brand. In reality, they are buying from an unknown seller who may or may not have legitimate products (if they even have any products at all). These sites are prolific and growing. According to a recent New York Times article, there are thousands of these websites. The Times reported that in 2022, the sock retailer Bombas identified 900 different websites claiming to be Bombas.

Companies Should Be on the Lookout

Ultimately, the issue here is that customers are being ripped off. And as with unauthorized resellers, the customer associates this bad experience with the brand and looks to the brand to remedy the situation. Companies should be aware of this growing problem and should be on the lookout for these types of imposter websites.

Fortunately, as with unauthorized resellers, these types of scams can be stopped and these websites can be taken down. If your brand is dealing with the problem of fake websites or with unauthorized resellers, contact Partner Alex Jones (440.832.0599; AEJ@kjk.com) or another member of KJK’s eCommerce Team.

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