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Today Show: Are Top Websites in Business with Counterfeiters?
Author:  Paul Hortenstine
Date:  02/24/2012

This morning, Jeff Rossen of the “Today” show reported on the techniques cyber criminals use to scam consumers into buying counterfeit products online.  These cyber criminals make billions ripping off Americans by selling counterfeit goods and pirated content, and are increasingly sophisticated in selling their products through popular online search engines and advertising services that make their products appear to be legitimate.  The report also showed how American companies profit from this illegal activity by selling advertising to cyber criminals. 

Here’s the story of one consumer who thought she was buying a real product but unknowingly purchased a counterfeit:

“High school senior Lauren McMillen just wanted to learn Spanish. So her dad went on eBay and spent $200 on what he thought was a never-opened Rosetta Stone software kit. ‘The ad said it was brand new and shrink-wrapped,’ Brian McMillen said. ‘Seemed absolutely legit.’  It arrived and it looked legit, down to the instruction manual, stickers, even inscriptions on the disks. But, Brian said, ‘We tried to install it, and it kept popping up an error message every time you started the product.’  It didn't work because it's a fake. Authorities say some even install viruses on your computer to steal your personal information. ‘It's not just some college kid in their basement putting this together,’ Lauren McMillen said. ‘This is a real business going on, and somebody is making a lot of money off of it.’”

And the counterfeit software came from overseas:

“Part of the problem: Many of these criminals are based in China — out of reach for U.S. authorities. That's where Lauren McMillen's kit came from. After she complained, eBay ultimately gave her a refund.” 

American companies turn a profit by selling advertising to cyber criminals: 

“And some say it's not just the criminals cashing in; it's the popular sites that allow them to advertise. Tom Adams, the CEO of Rosetta Stone, said they've caught Google selling coveted top-of-the-page ad space to more than 1,600 rogue websites peddling fake Rosetta Stone. Here's how it works: You go to Google and type ‘Rosetta Stone’ into the search bar and you get a list of websites — the real one and, on the day the company showed us, many fakes offering discounts. Click on them and they look legit.”

Video of the report is here.

Currently, there is broad agreement among the technology and entertainment industries and between members of Congress and the President that additional tools are needed to target online piracy and counterfeiting.  Everyone should join in a constructive dialogue about a solution to this growing problem that is a danger to consumers and a drag on the economy.