PHOENIX — "It's electrical. Do you want to put a 220-volt bomb in your house?" asked Let Joe Know volunteer, Grant.
He bought a new heater for an indoor hot tub, but when it arrived he realized it wasn't right. Grant was sent a counterfeit, knock-off product.
Now he's warning others: "There's a scam out there for all of us and this one got me."
Grant did research and found a reputable company, Coates, which produces the equipment he needed. Then, Grant went to Amazon and bought what he thought was a Coates heater from a third-party seller.
When the heater arrived, Grant had questions about installation. He went to the Coates website and called for help. That's when he realized something was wrong.
"They asked us for the model number and, lo and behold, our model didn't fit anything that they'd ever made," he explained.
The counterfeit was convincing.
They used the legitimate Coates logo with a few modifications and changed the lettering so their heater read 'Coasts.'
"I said - wait a second, this is a knockoff, this is a copy. It's not the right one. This is a crime, it's fraud," Grant recalled when realizing the item wasn't legitimate.
He reached out to Amazon. They did refund his money and removed the third-party seller for selling counterfeit products, but there are others.
We did a quick search for 'Coates heater' on Amazon and found several that had the same slightly altered logos as the one Grant purchased.
"We started getting contacted from people around the globe with these heaters that look like ours," explained David and Justin Heinen, the president and vice president of Coates.
They say counterfeit products are impacting their business to such a degree that they've created a warning and information page specifically about spotting and avoiding counterfeits on their website.
Safety is a major concern when it comes to these counterfeits.
People may not realize they're knock-offs and hook them up, but oftentimes the counterfeits are not UL-listed. UL are standards that electrical products sold in the U.S. must meet. If a product doesn't meet these standards, you cannot be certain it is wired correctly and doesn't have potential problems.
Besides safety concerns, the Heinens say counterfeits are also hurting their brand name and reputation.
"There's a good potential that there's customers out there that bought one of these counterfeits and believe it's ours."
Coates tried flagging some of the fake products, but there are too many, and sometimes a product can only be flagged as counterfeit after a consumer has purchased it.
We asked Amazon what steps they take to protect companies and consumers. A spokesperson responded with this statement:
Amazon has a zero tolerance policy for counterfeit products. We have proactive measures in place to prevent counterfeit products from being listed and continuously monitor our store. If we identify an issue, we act quickly to protect customers and brands, including removing counterfeit listings and blocking accounts. Customers are also always protected by our A-to-Z guarantee. If a product doesn't arrive or isn't as advertised, customers can contact our customer support team for a full refund of their order.
We also asked major e-commerce site Walmart about their policy when it comes to third-party sellers and consumers. Below is the email from their spokesperson:
-Walmart invests heavily in technology, people and the development of robust policies and processes to protect customers and provide a safe channel for third-party sellers.
-We have zero tolerance for fraudulent sellers or the sale of prohibited items, including counterfeit products. We take claims of counterfeit items and fraudulent sellers very seriously, and we make it easy for customers, sellers and brands to report concerns (including compliance, counterfeit, IP and fraud). We review these claims rigorously to take appropriate action.
In today's rapidly changing retail environment, we lead with a continuous improvement mindset and value input from customers and sellers as our platform evolves.
Counterfeit section of Prohibited Products Policy: Easy-to-use online form for customers, sellers, third parties and rights owners to flag items that may be counterfeit. Customers can also report counterfeit items by contacting Walmart Customer Care. Our dedicated global Trust and Safety team implements Walmart's high standards and ensures continuous improvement of our controls. We leverage emerging technology to build custom capabilities.
We asked online marketplace Alibaba the same questions but didn't get a response.
There is good news.
A new law, the INFORM Consumers Act, took effect at the end of June. It holds online selling platforms accountable for the sale of outdated, stolen, or counterfeit products by third-party sellers. Online marketplaces must collect and verify bank account information, contact information, and tax ID information for high-volume third-party sellers and disclose to consumers some of the sellers' identifying information so they can make informed decisions.
The act also requires online marketplaces to suspend parties who do not provide the information or provide false information and to give consumers a way to report suspicious activity.
Marketplaces face a fine for each violation.
You can read more about the law or make a report on the Federal Trade Commission's website.
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