Research has found that online marketplaces and social media platforms are suffering a significant uplift in illicit activity from counterfeiters taking advantage of Black Friday buzz.

One particularly problematic platform has been identified as Instagram, with one senior in-house attorney telling WTR that fraudulent adverts have been rife in recent weeks.

According to research from Incopro, this year’s Black Friday is proving to be a potential goldmine for counterfeiters. On Amazon, one major cosmetics brand has been the subject of “a 165% month-to-month increase” in high-risk and possibly fake listings in recent weeks. Meanwhile, one luxury fashion brand has experienced “an 86% rise” in suspected listings for counterfeits on eBay. “The increase in infringement experienced on marketplaces is echoed on social media,” explains Incopro brand advisor Tosshan Ramgolam. “Posts promoting counterfeits are often hijacking both generic Black Friday hashtags (eg, #blackfriday and #promoblackfriday) and those set up by brands. For example, we are aware of one luxury brand that has seen a 233% increase in the use of the ‘#blackfriday’ hashtag on Instagram by users promoting counterfeit watches.”

Such a rise has also been witnessed by Alastair Gray, senior brand protection manager at Tommy Hilfiger. Talking to WTR, he explains he has observed a massive increase in fraudulent adverts on Instagram since mid-November. “Starting two weeks ago, there has been a significant spike in the number of scam paid adverts posted by generic new accounts (often created just days in advance) using ‘Black Friday’ as a keyword that are directing consumers to identical websites with different URLs,” he explains. “These websites offer huge unrealistic discounts and often have no contact or company information displayed. I have seen these sponsored adverts targeting popular toys, handbags, winter jackets and boots, guitars, and fitness trackers, as well as many popular fashion clothing brands. They rely on the fact that discounts from legitimate businesses may be higher than normal around Black Friday.”

Remarkably, Gray says he discovered dozens of fraudulent ads promoted to a single Instagram profile in one day (see examples below). “This highlights just how fiercely aligned to global shopping events these criminal networks are, orchestrating the creation of hundreds of ad accounts, websites, hosting and payment infrastructures in order to maximize their return on investment whilst competing against the legitimate brands in the same space,” he adds. “I’ve seen some counterfeit ads for some well-known brands attracting well over 160,000 and 240,000 views, so their reach cannot be underestimated.”

A variety of Instagram ads identified in the past few days

Dozens of paid adverts on Instagram promoting suspected counterfeit goods – most of which are still running – have been found targeting brands including Furla, Justin Boots, LVMH, Nintendo, Timberland, and the NFL (incidentally, another regularly targeted brand, Stone Island, posted a warning on Instagram this week about fake products). A majority of these ads use link shorteners (eg, Bit.ly) to misdirect users, with some counterfeiters creating links that are only accessible when viewed within the Instagram app (and not on the desktop browser). For example, Gray says he recently found one Instagram advert for counterfeit goods that used a domain linked to 3,200 more domains – 800 of which were still active and featured ‘high discounts’ for branded items and no contact information.

“This means that counterfeiters have figured out precisely how to hide their activities from snooping brand owners and possibly even Instagram itself,” Gray explains. “Therefore, unless you can find an ad ‘in the wild’ (ie, within a profile’s feed), it can be extremely difficult to determine the actual destination website where potentially-deceived consumers end up. So while a counterfeit ad itself may be reported and removed from the platform, the website it once directed to will continue to operate and probably be used again in another advert. On top of that, some scammers use an innocuous website address when configuring an advert (such as a legitimate website from a department store) only to be swap it to a counterfeit website as soon as the advert has been approved and gone live – this is ninja-level counterfeiting activity!”

Tips for success

All of this, unsurprisingly, is a headache for brand owners – especially at a time when resources may be tighter than usual (due to Thanksgiving and other holiday festivities). To that end, Gray has a number of tips for rights holders to help identify and tackle fakes on Instagram:

Of course, this advice is not just for the holiday period – such illicit activity continues throughout the year.

Courses of action

So while brand owners should ensure they have an effective Instagram enforcement strategy, Gray urges Facebook – the owner of Instagram – to consider vetting advertisers. “For online shopping, and in particular sponsored advertising, transparency and being able to definitively attribute an advertiser from an advertisement is essential for consumer trust and safety,” he says. “This means being able to have confidence that whoever is selling a particular product or service can be identified, contacted and held to account if things go wrong.”

Therefore, he suggests that Facebook should “elevate” its protocols to ensure that illicit advertisers can be identified. “At the current time, it appears relatively easy to run a sponsored advert; with just a name and email address to create a community page and a credit card – this might explain why so many of the advertising accounts are apparently bot-generated,” he notes. “Therefore, Facebook can start with enhanced ‘Know Your Customer’ protocols such as verifying advertisers’ individual/business name (proven with recognized ID) and street address, phone number, email and any business registration details. Ultimately, when jointly targeted by sustained criminal activity, there should be a determined willingness to work together and hold those ultimately responsible to account, and make it as difficult as possible for counterfeiters to continue to operate and infiltrate genuine buyer experiences.”

This message is echoed by the American Apparel & Footwear Association (AAFA), the influential industry trade group which represents hundreds of fashion companies and their suppliers. “Certainly the platforms should be doing more,” contends Christina Mitropoulos, the AAFA’s government relations representative, to WTR. “Social media platforms are becoming more and more of a concern when it comes to the sale of counterfeit products, whether it is in the form of paid advertisements, fake brand profiles, or fake endorsements. Therefore, just verifying the information in the ads they push to users would have a major impact. Beyond that, social media platforms should be working with brands to ensure that the content and ads that they are hosting are for legitimate products.”

For its part, Facebook is aware of the issue and recently pointed to its anti-counterfeiting tools and efforts. In a post published last week, Facebook recognized that the issue of fake goods “is especially top-of-mind for advertisers” in the lead up to the holiday season, and pledged that the company has “strict policies against counterfeit goods and other kinds of IP violations”. To prove that point, it revealed that in the first half of 2019, it removed 359,000 pieces of content on Instagram in response to 39,200 counterfeit reports submitted by brand owners. Furthermore, it claimed to be investing in machine learning and artificial intelligence “to help block or reduce the distribution of potentially counterfeit content on both Facebook and Instagram”. WTR has reached out to Facebook for additional comments.

While positive strides are being taken by Facebook, some brand owners and industry associations clearly feel that more needs to be done. As Gray concluded in his conversation with WTR, he is hopeful that things will improve with more effective cooperation: “Platforms and brand owners share a responsibility to keep their users and consumers safe and the only way to achieve this is to collaborate in everyone’s best interests.”

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Read the article on WTR here