Scammers Go Beyond Fake Products, Impersonate Small-Business Owners

"Copycats are stepping up their attacks on small businesses.

Sellers of products including merino socks and garden accessories said they have lost customers to online scammers who use the legitimate business owners' videos, logos and social-media posts to assume their identities and steer customers to cheap knockoffs or simply take their money.

"We used to think you'd be targeted because you have a brand everywhere," said Alastair Gray, director of anticounterfeiting for the International Trademark Association, a nonprofit that represents brand owners. "It now seems with the ease at which these criminals can replicate websites, they can cut and paste everything."

Technology has expanded the reach of even the smallest businesses, making it easy to court customers across the globe. But evolving technology has also boosted opportunities for copycats; ChatGPT and other advances in artificial intelligence make it easier to avoid language or spelling errors, often a signal of fraud.

Imitators also have fine-tuned their tactics, including by outbidding legitimate brands for top position in search results. "These counterfeiters will market themselves just like brands market themselves," said Rachel Aronson, co-founder of CounterFind, a Dallas-based brand-protection company.

Policing copycats is particularly challenging for small businesses with limited financial resources and not many employees. Online giants such as Amazon.com and Meta Platforms said they use technology to identify and remove misleading ads, fake accounts or counterfeit products.

"Large corporations have the in-house ability or can connect with outside counsel to monitor and take down content. They are multilingual," said Thomas Moga, a patent attorney with Dykema. "Individuals and small businesses don't have that at the ready. They are really at a significant disadvantage."

Here are two small businesses battling these challenges:

Jen Rose, a ceramist in Dallas, used Instagram, TikTok and Facebook to build a following for Bee Cups, tiny porcelain vessels that hold water for bees and other pollinators. Rose has about 50 retail partners, but most of her handmade cups are sold through her website, priced at $20 to $200.

This April, hundreds of fake listings began popping up on Amazon.com and other shopping platforms using Rose's face and her images and videos to steal customers. Bee Cups now receives about 25 emails a day from people complaining that the watering cups they received are made of plastic or requesting a refund.

"They are taking my images that show my face and my employees," said Rose, who was a professor of ceramics when she started Bee Cups in 2020. "These videos are being translated into Dutch and Swedish and being put out overseas."

Amazon has a zero-tolerance policy for knockoff products and acts quickly to remove copycat listings and block accounts, a spokesman said. Artificial intelligence and other technologies have improved the company's ability to detect infringements. He said Amazon will also refund or replace items if shoppers are dissatisfied.

Andrea Porter, a beekeeper who lives near Spokane, Wash., received a set of fake Bee Cups in May from Amazon. "They feel very cheaply made and smell awful," said Porter. "I don't see them being safe for any pollinators."

Rose offers disgruntled buyers like Porter a $15 gift card if they send in the imitation cups, which are typically shipped from China. This spring, she took to Instagram to warn her 115,000 followers about the fakes.

The copycat explosion has had one unexpected benefit: Sales are up 30% this year. "The fact that all of my videos were mass-produced by fake companies made me so much more visible," Rose said.

Bee Cups recently hired a law firm that works with Amazon and other platforms to remove the fake listings, but finds it difficult to stay ahead. "I can't pay my lawyers to go after every single site," said Rose, who received a $27,000 legal bill for the month of April. "It feels like I've hit the viral mode for the scam products."

Darn Tough Vermont, a maker of merino socks, doesn't advertise discounts, and its markdowns are modest. That made it all the more surprising when ads started popping up on Facebook and Instagram promising large discounts on the 20-year-old company's products.

The ads carried Darn Tough's logo, images, photos and wording, all scraped from the company's website. "The more you buy, the more you save," a banner across one ad promised. At the top was the address darntoughonline.shop.

There were few clues that the ads were fake, said Ryan Dahlstrom, global director of digital commerce for the Northfield, Vt., company. "They'd find an old ad we had run," he said, "flip a 75% or 80% badge over that image and throw it up as a sponsored ad or a sponsored post."

Shoppers who took advantage of the special offers didn't receive Darn Tough socks -- or anything at all. Many called Darn Tough's customer service line to check when their merchandise would ship or to inquire if the discounts were legit.

"Half of my day, five days a week was spent tracking down these websites, taking down these websites," Dahlstrom said. Platforms would sometimes take down bogus postings in days; other times, the process stretched for weeks.

Mark Lee, chief executive of MarqVision, a brand-protection company now working with Darn Tough, said some ads retargeted consumers who went to the original Darn Tough website, while others were aimed at shoppers who searched for socks or used other specific search terms.

The fake websites could only be reached by those receiving the bogus ads, making it tougher for Darn Tough to find them and take them down, he said.

Meta said it uses technology to prevent fake ads from being posted and to detect and remove them from Facebook and Instagram. "It's against our policies to run ads that deceptively try to scam people," a Meta spokeswoman said.

Darn Tough and some of its customers have taken to social media to warn would-be buyers about the fake listings. Some fans have even incorrectly posted warnings on some of Darn Tough's official postings.

"It became very clear," Dahlstrom said, "that the consumer has a hard time differentiating between real and fake."" [1]

1. Scammers Go Beyond Fake Products, Impersonate Small-Business Owners. Simon, Ruth.  Wall Street Journal, Eastern edition; New York, N.Y.. 11 June 2024: A.1