Counterfeit products have long plagued online marketplaces, posing challenges for both businesses and consumers. The issue has skyrocketed in recent years, with nearly 70% of consumers reporting they were tricked into purchasing fake products online in 2023 alone. 

With the Digital Services Act in effect since February 2024, the responsibility now falls on platforms to take reasonable measures to prevent the sale of counterfeit goods on their sites. However, this presents a daunting challenge, as counterfeiters are increasingly using sophisticated AI technology to improve their deception, raising questions such as - 

“How can we differentiate between fake and genuine products when they appear identical?”

Well, what if I told you that the key to detecting fake products lies not in scrutinizing the product listings themselves, but in addressing the root cause - fake accounts. 

Whether it's counterfeit fashion items, knock-off electronics, pirated pharmaceuticals, or fake everyday goods, they can be directly linked to the presence of fake accounts on platforms. This article will unpack this concept, and explain how we can help you combat the fake accounts problem. 

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So, why should you care about fake product detection?

• Legal compliance: Failure to prevent the sale of counterfeit goods can have serious legal consequences for online platforms. E.g. The European Commission can now impose fines of up to 6% of a company's global annual revenue for DSA violations. 

• Consumer trust: The presence of counterfeit products undermines consumer trust in marketplaces, potentially leading to diminished loyalty and increased user churn.

• Marketplace reputation: Platforms known for offering genuine products naturally attract more customers and sellers, enhancing their reputation and contributing to long-term growth.

• Health risks: Counterfeit products, especially food and pharmaceuticals, can pose serious health risks to consumers. These dangers were tragically highlighted by a fatal fire in New York in 2023, sparked by an electric scooter with a counterfeit safety label.

• Revenue protection: Detecting fake products safeguards the financial interests of legitimate businesses by preventing revenue diversion to counterfeit goods.

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The common mistake: focusing on the product rather than the account

Can you imagine trying to identify fake products from their product image alone? What’s to say the image even matches the product being sold? Counterfeiters can use genuine product photos from other sites or even AI-generated images to make their listings appear legitimate. This makes manual fake product detection online impossible in many cases.

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Think about it like this: every counterfeit product sold online originates from a seller, and behind every seller lies an account. Who’s behind the account?

Selling counterfeit goods is illegal in most countries because they infringe on intellectual property rights. As a result, these sellers usually hide their identity using fake accounts, so they can’t be detected. It’s the same for scams, fake reviews and any other bad behavior you can think of online… The bad actors behind these cybercrimes know they’re wrong and don’t want to get caught, so they hide! They often masquerade as legitimate sellers, using sophisticated techniques to bypass ID verification systems including creating convincing fake ID documentation, manipulating biometric data, using AI-driven chatbots, buying aged accounts, generating deep fakes and more. 

A multi-layered approach to fake product detection

To stay ahead of these cunning tactics, platforms must scrutinize the behavioral patterns of sellers on a large scale. This is where AI-powered solutions, such as Themis's Trust & Safety platform, come into play. We use a multi-layered approach to address the fake accounts problem. By understanding the "who," "what," "where," and "why" of fraudulent activities, we help marketplaces effectively fortify their defences against counterfeit products and the fraudsters peddling them.

• Who: Assess the current behavior and connections of users to ensure alignment with typical patterns of genuine users.

• What: Identify any deviations in user activity compared to their usual behavior, along with evidence of account takeovers or connections to other suspicious accounts.

• Where: Pinpoint the areas on the platform where suspicious behavior occurs, such as reviews, listings, comments, or direct messages, to provide context for classification.

• Why: Understand the motivations driving fraudulent activities, which are crucial for strengthening platform defences against future threats.

So, the next time you suspect there are counterfeit products on your platform, remember: behind every fake product likely lies a fake account. And with the right tools and strategies in place, we can dismantle this web of deception and pave the way for a safer and more authentic shopping experience for your customers.