Protect yourself from buying knock-offs online - MoneySense

Protect yourself from buying knock-offs online

How to make sure the site you’re purchasing from is legit


TORONTO — Consumers who purchase knock-off merchandise online have a lot more to be wary about than receiving an inferior product.

Knowing how to spot a fake website can protect your wallet, your identify and even your life, say experts.

Toronto lawyer Lorne Lipkus, who specializes in anti-counterfeiting, says the production and sale of imitation goods is a global, multibillion-dollar problem affecting everything from
what we eat to what we wear. The OECD put the value of imported fake goods worldwide at US$461 billion in 2013.

“Anything that’s being produced in the market is being counterfeited,” says Lipkus. “We’ve had deaths in Canada from someone who ingested counterfeit pharmaceuticals.”

The illegal activity is also a significant source of funding for organized crime activities, he adds, something often overlooked when people fork over their credit card details in the pursuit of bargain-basement priced goods.

“You give them the information and they’re going to use that information to steal your identity and perhaps put other charges through your credit card,” says Lipkus.

To avoid purchasing counterfeit goods, Barry Elliott of the Canadian Anti-Fraud Centre (CAFC) says consumers should thoroughly research an online store prior to making a purchase, as fraudulent websites selling counterfeit items will mimic legitimate sites.

In the case of popular retailers such as Canada Goose, Lululemon and Michael Kors, fake sites will typically offer discounted prices, using the concept of a limited, one-time-only sale to attract buyers.

Natasha Tusikov, an assistant professor of criminology at York University, says some sites such as Canada Goose’s now have search tools to help consumers determine if sites advertising and selling their authentic products online are from authorized retailers.

“Doing that will confirm you are dealing with the actual manufacturer,” Tusikov says.

The CAFC also advises looking for any obvious red flags on sites, such as spelling mistakes and grammatical errors, or online stores using a web-based email like Gmail, Hotmail or Yahoo under their contact details as opposed to a company email account. Merchants asking you to email them your credit card information should be also avoided.

Another more technical tip, Lipkus says, is to make sure a retailer’s website address starts with “https://” as opposed to “http://” — “that ‘s’ at the end shows that there’s more secure encryption used on the website,” he says.

If you are the victim of a knock-off scam, Lipkus says the damage can often be mitigated if a credit card was used to make the purchase.

“Talk to your credit card company,” he says. “If you’ve bought a counterfeit and report it to them, most of them have a zero tolerance policy when it comes to purchasing or selling counterfeits.”

Interac spokeswoman Teri Murphy says counterfeit purchases made using debit are not covered through Interac’s zero liability policy and would have to be investigated by the cardholder’s financial institution.

Tusikov says even more protection is offered for credit card holders through the CAFC’s Project Chargeback, a collaboration between the federal agency, credit card companies and banks who work together to reimburse victims of online fraudsters and then close counterfeit retailers’ accounts. The program has existed since 2012, but few Canadians are aware of it, she says.

How it works is a consumer files a complaint with the CAFC by providing a photo of the goods, the website address it was found on, the date and amount of purchase. Once the CAFC confirms the goods are not authentic, the information is relayed to the credit card company and issuing bank to assess and then initiate a chargeback.

“It’s very simple, it’s very fast,” says Elliott. “Altogether, 35,000 chargebacks have been issued and we’ve recovered over $10 million. The merchants have the ability to dispute the chargeback and none of them have.”

Through Project Chargeback, victims are also instructed not to return counterfeit goods to sellers, Elliott says. By not returning the item, that prevents the seller from trying to re-victimize someone else with the same product.