Shopify Stores Hoarded With Thousands Of Fraudsters

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With the surge of eCommerce stores and e-shopping, tens of thousands of sellers switch to eCommerce platform Shopify to con consumers and sell forged useful items. Discovered through an eCommerce authentication service FakeSpot, it analysed more than 120,000 Shopify sites, as many as 21 per cent posed a risk to shoppers.

Shopify has been a winner corporate for the pandemic as it offered quicker tools for online selling. As lockdown took effect worldwide, many retailers rushed to Shopify — and so did the con artists. A few retailers were seen for collecting personal data without any intent actually to deliver a product. There were also a few other issues identified, including brand infringement and deplorable customer service. The Fakespot report also explained that many of the stores they found appeared to be China-based merchants posing as US small businesses.

After being notified by the Fakespot, Shopify took immediate action and suspended two sites.

The list included MDRN Supply Co, which appeared to be selling counterfeit goods imitating products from luxury brands Supreme and Louis Vuitton. Previous customers had left reviews on third-party sites, such as the Better Business Bureau, accusing it of not fulfilling orders. Its owners could not be reached for comment.

Touted as the “anti-Amazon”, Shopify’s software offers templates, inventory management and secure payment functions on a retailer’s website, rather than having to compete on the cut-throat Amazon marketplace. Since March, Shopify has more than tripled in value; its market capitalisation is now about $140bn.

However, unlike Amazon, where negative reviews or a high percentage of returns can quickly see a seller down-ranked or removed, the decentralised nature of Shopify means entire stores can operate with no apparent signs that its customers are unhappy. Specific measures are practised to attract a new business, including advertising on social media, particularly Facebook and Instagram, where legitimate retailers are mostly indistinguishable from suspicious ones.

The more significant investment in anti-counterfeit measures at Amazon, eBay and other marketplaces had seen criminals migrate, giving relative newcomer Shopify “growing pains” as it eagerly attracted new merchants.

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