Brand

What you should know about brand abuse and online counterfeiting if you own an e-commerce site

The more brands invest in advertising to enhance their online sales, the greater the business potential for cybercrime.

An estimated 15.5% of online publications related to fashion items correspond to fakes.

Combatting illicit business is like a game of chess: for every move that a brand makes to protect itself, cybercriminals make a countermove. Activities such as counterfeiting or brand impersonation are constantly adapting to take advantage of emerging market potential and changing consumer habits. Sitting in their crosshairs are the brands most familiar to users, those which invest in advertising and e-commerce to increase their notoriety on the Internet.

There are several types of fraudulent operations which vary depending on the channel in question and the nature of the fraud. We explain what each of them consists of in this article.

Fake merchandise on online marketplaces and other websites

Counterfeiting operations can be found on various types of e-commerce sites, from online marketplaces, such as Amazon or Alibaba, to websites that mimic the official brand. The behavior of cybercriminals is different in each case:

Online Marketplaces

Returning to the simile of the chess game, counterfeiters know which moves will expose them and which are safe. For that reason, counterfeit products do not appear on online marketplaces with the name of the brand or the product, nor do they place images on the main product page, since these would be detected quickly. On the contrary, cybercriminals try to disguise counterfeit merchandise as much as possible by promoting it solely via social networking, often by first sending the user through a string of websites until they land on the product.

Both on search engines and e-commerce sites, fake merchandise can be located through the keywords employed, such as the brand name, along with other terms such as “outlet” or “discount”. However, the volume of data returned from these keyword searches is enormous and it is difficult to analyze the results to discern which links lead to a counterfeit, and which do not. For example, consider that our Smart Brand Protection platform on average rejects 98% of the links detected during the initial scan that forms part of our antipiracy service process.

To classify the detected links, matching and filtering criteria are applied, using factors such as image recognition or identification of prices well below the recommended retail price (RRP) set by the brand. It would be impossible to process the sheer volume of Big Data without the aid of machine learning algorithms and automated computer vision techniques, a scientific methodology which processes, analyzes and “understands” images, and whose recognition algorithms allow us to find similar images, even if they have been altered (for example, a distorted logo).

Once the fake merchandise made available on a given online marketplace has been identified, a request for takedown is issued, documenting the applicable legal rights using the copyright protection mechanisms available on these types of e-commerce sites. This process is automated and validated by means of the agreements that Smart Brand Protection has in place with the main online sales platforms.

When acting against illicit business, it is important to take into account the online share in terms of visits that each marketplace has in order to prioritize the search for counterfeit goods, and target those that can cause the greatest negative impact on the brands in question.

Websites that contain fake merchandise or which entail fraud

Online marketplaces are not the only place where one can find illicit business practices. Brands with a strong e-commerce projection face an even greater threat: rogue sites. A “rogue” is defined as a person who behaves in a way that is detrimental to others. Rogue sites are websites that use the identifying features of a brand to market counterfeit merchandise. These sites target users favorable to the brand who, in many cases, are not aware that they are buying on a fraudulent website. As in the case of the major online marketplaces, the products are promoted on social networks using an attractive image and price.

In some cases, users who make a purchase on a rogue site do not become aware of the deception until they receive the counterfeit goods, while in other cases the product never arrives. Other times, the website disappears overnight and there is no way to file a claim or even prove its existence. Thanks to our participation in the Google Trusted Copyright Removal Program (TCRP), we at Smart Brand Protection are able to quickly and efficiently delist such rogue sites from all Google result pages.

If, however, copyright owners do not act on time, this type of fraudulent website can have a negative impact beyond simply causing harm to brand image: loss of sales, distrust in advertising campaigns or even a collapse in customer service by flooding the department with incidents corresponding to rogue sites, and not the authentic product itself.

Online brand abuse

Apart from counterfeiting, the impersonation of a brand by cybercriminals may have other purposes, such as obtaining personal information from users (phishing) or fraudulently profiting in other ways.

Online brand abuse using domain spoofing

Although brands use a small number of domains to facilitate access to their customers, they usually acquire a larger set of domains to prevent others from using such domains to supplant, or “spoof” them. However, there are always free domains that pirates can take advantage of.

Cybersquatting (or brandjacking) is the misappropriation of domain names that closely mimic the legitimate sites in order to then divert traffic from them, make fraudulent use thereof, or benefit from the online traffic or advertising. To be considered cybersquatting, the owner of the domain (without any right or legitimate interest in the trademark) must use an identical or very similar domain name for fraudulent purposes.

Typosquatting (also known as URL hijacking) is another form of cybersquatting, which consists of acquiring domains that utilize the common typographical errors (spelling mistakes) committed by users when they enter the address of a website in a browser; for example, smartproteccion.com in place of smartprotection.com. The most common techniques for performing this type of brand abuse include adding characters at the end of the domain name, replacing a letter with a similar one, separating the name with a hyphen or changing the top-level domain suffix.

Online brand abuse through logo misuse

In addition to domain spoofing, there are other identifiable features of a brand that can be used for illicit activities, one of the most common being the logo or trademark. Cybercriminals use the brand image, or a very close facsimile, to attract customers and create a false sense of security.

Brand abuse through advertising

Pirates also invest in ads that supplant the identity of the real brand to sell counterfeit products familiar to users at bargain prices. These ads are frequently posted on social media networks and usually link to a rogue site, where buyers can easily make the in just a few clicks.

What’s more, pirates invest in SEM to get better search rankings based on brand names and/or products that do not belong to them. There are existing legal precedents where this practice has already been found to be illegal.

The presence of this type of advertising is especially widespread on Instagram, a social network that is increasingly popular among young people. According to figures from Ghost Data (2019), Instagram hosts an estimated 6,769 active accounts that advertise counterfeit merchandise, 171% more than three years ago. In the case of fashion brands, which suffer the most from this type of abuse, 15.5% of the industry-related hashtags published correspond to counterfeit goods.

Brand abuse through advertising can lead to user distrust, and consumers may come to doubt the authenticity of the ads he/she sees on social networks, even when they are genuine, which leads to a loss of effectiveness in advertising expenditure. To this we must add that, following a purchase on a rogue site, the customer may also associate the brand with a bad user experience or with low quality merchandise.

As we can see, the moves made by cybercriminals in their metaphorical chess game are many and meticulously crafted. With this in mind, the best choice is not to move a piece and then wait for the opponent’s turn, but rather to sweep all his pieces from the board.

Whenever brand abuse occurs, there are two basic approaches to remedy the situation: by means of a legal proceeding, and/or through the immediate de-listing of the URL. We at Smart Brand Protection are able to de-list an illicit URL in a matter of hours, meaning that we can act to eliminate access to pages containing the most common and higher volume of abuses. In order to definitively take down a fraudulent domain, it is necessary to initiate a legal proceeding by engaging legal teams specialized in intellectual property rights. The combination of both approaches serves to checkmate cybercrime, but let’s not forget that, on the internet, whenever one game ends, the next one begins. Therefore, it is essential to be constantly protected by specialized platforms for the detection and takedown of illegal content.

Would you like to know if your brand is plagued by fake merchandise or is abused improperly online?

If you would like to find out if your brand is at risk online, request a free audit from Smart Brand Protection