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Transnational Alliance to Combat Illicit Trade
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Fraudulent Advertising Online

Fraudulent advertising is rapidly emerging as a new risk to consumers shopping online, where millions of consumers are exposed to thousands of fraudulent advertisements taking them to thousands of illegitimate e-commerce websites that defraud and/or sell counterfeit products and deceitful services.

​A new report from Transnational Alliance to Combat Illicit Trade (TRACIT) and the American Apparel & Footwear Association (AAFA) shows that 70 major international brands were targeted by fraudulent advertisements on Instagram and Facebook since 2017, some of which receive up to a quarter of a million views before they are detected. 

​The report investigates and points out that Internet-based platforms for social networking and shopping from home have inherent systemic weaknesses that are exploited by criminals to sell any variety of counterfeit or illegal product with little risk of apprehension. The lack of sufficient policies and procedures to verify an advertiser’s true identity and limited vetting during the onboarding process are identified as the main vulnerabilities that enable fraudulent advertising online. 

Featured Webinar: Argentina

TRACIT presents report to AntiPiracy Association of Argentina

1 September 2020, (Buenos Aries, Zoom). At the invitation of the Anti-Piracy Association from Argentina, TRACIT presented the findings from its report on “Fraudulent Advertising Online: Emerging Risk and Consumer Fraud.”

The webinar explained how Internet-based platforms for social networking or shopping from home have inherent systemic weaknesses that enable criminals to exploit these gaps to sell any variety of counterfeit—or any illegal product or substance—with little risk of apprehension. Participants discussed the application of policy recommendations to Argentina.
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WHAT ARE THE DANGERS?
  • ​Consumer risks - Fraudulent adverts give innocent consumers a false impression of authenticity. Counterfeit goods are generally of poor quality, will not last, are not guaranteed, and may be dangerous.  
  • Business and brand owners - IP theft in the form of trademark counterfeiting and copyright piracy stifles economic growth and job creation by discouraging innovation, reducing incentives for companies to invest in R&D and inhibiting creative industries from realizing their full potential. 
  • Data privacy - Most fraudulent websites show a disregard for data privacy of any type, including customer data, security, and financial information. Since these websites rarely use any form of security, consumers are often also exposed to credit card fraud, identify theft, and other cybercrimes.
  • Organized crime - The fraudulent and infringing adverts discovered on Facebook often share similar characteristics and suggest that organized crime groups or organized illicit networks are operating these fraudulent ad campaigns. 

MEDIA CENTER
Supporting materials
  • TRACIT Media Release
  • AAFA Media Release
  • Key messages​
  • Executive Summary (english)
  • Executive Summary (español)
  • TRACIT endorses INFORM Consumers Act, Supports legislative measures to improve verification of online suppliers, 30 July 2020
​Press coverage
  • More than 70 companies victims of ad fraud on Facebook, according to new report​ (The Washington Post, 22 July 2020).
  • Call for government to do more on brand misuse and ad fraud on social media as report reveals scale of problem, (World Trademark Review, 22 July 2020).
  • Report: 70-plus Brands Targeted By Fraudulent Social Media Ads, (Women's Wear Daily, 22 July 2020).
  • Contrefaçon: mise en garde contre les publicités frauduleuses sur internet, (Agence France Presse Economique, 22 July 2020).
  • Ad fraud on social media a “systemic problem”, says report, (Securing Industry, 23 July 2020).​​
  • US business groups seek steps to stamp out online fraud, (Just-Style, 24 July 2020). 
  • Business groups call for action on fraudulent social media ads, (Yahoo Finance UK, 25 July 2020).
  • Reclaman a Instagram, YouTube y Facebook que sean más proactivos con la publicidad fraudulenta que a veces alojan, (Confilegal, España, 26 July 2020).
Related
  • FASHION VICTIM Huge spike in fake Facebook ads selling rip-off clothing during coronavirus pandemic, (The SUN, 10 July 2020).
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    • Fraudulent Advertising Online
    • Global Illicit Trade Index
    • Illicit Trade and the UNSDGs
    • Link Between Illicit Trade and Sovereign Credit Ratings
  • Sectors
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