Crackdown on Counterfeiting – Seattle Business Magazine

Amazon’s massive anti-fraud efforts are paying off.

The Seattle-based e-commerce giant says it stopped more than 700,000 “bad actors” trying to create new sales accounts last year. Amazon’s recently released 2023 Brand Protection Report shows that the company invested a staggering $1.2 billion in the fight against fraud last year. Amazon has more than 15,000 fraud prevention employees.

“When a customer makes a purchase in our store, he or she can be sure that he or she will receive an authentic product,” writes Dharmesh Mehta, Amazon’s vice president of global sales partner services, in the report. “We continue to successfully hold more and more bad actors accountable, stopping them from abusing our stores and those of other retailers.”

Overall, fraud continues to increase as digital shopping becomes an increasingly preferred way to shop. Mastercard’s 2024 report shows that global e-commerce fraud losses reached $41 billion in 2022, and were expected to exceed $48 billion last year. North America boasts the highest volume of fraudulent transactions in the world, accounting for 42% of all frauds. Citing research by Juniper, the report notes that data breaches and credit card theft are particularly concerning.

“The United States is the country most susceptible to fraud,” the report says. “Thirty-four percent of consumers say they are most likely to have been the victim of a scam, and that percentage is likely higher today.”

Fraud takes many forms. “Promotional abuse” is the use of promotional incentives. “Friendly fraud” occurs when a consumer makes a purchase online and then disputes it with their bank. Hackers can also take over accounts and are increasingly using ChatGPT to do so. Mastercard research shows that more than 50 fake AI apps are deceiving unsuspecting users by launching phishing attacks to capture personal and payment data.

It also found that 70% of companies use three or more anti-fraud tools. Amazon’s strategy focuses on four key areas: extensive seller vetting; using machine learning to identify violations; close links with brands and law enforcement agencies around the world; and consumer education.

The company says that last year, “proactive checks” blocked more than 99% of suspected infringing listings before the brand even discovered them. Amazon makes extensive use of artificial intelligence to protect intellectual property.

“Since 2020, while the number of products available for sale on our store has increased significantly, we have seen a more than 30% decline in the total number of valid infringement reports submitted by our brands,” Mehta writes in the report, noting that the company’s Counterfeit Crimes Unit has prosecuted more than 21,000 “bad actors” through court proceedings and criminal law enforcement referrals.

“This required significant innovation,” adds Mehta. “We will not rest until we eliminate counterfeits to zero.”