There are lots of obstacles facing online merchants these days and here's the newest: cease and desist letters written by people pretending to be lawyers at law firms that don't actually exist. That's what reportedly happened to Brushes4Less, an Amazon Marketplace store whose most popular product is a replacement toothbrush head. Or at least it was, until Amazon delisted it shortly before Amazon Prime Day in July.

Amazon sent an email sent to Brushes4Less's owner to explain that the product was being suspended due to an intellectual property violation complaint filed by an attorney from the law firm Wesley & McCain in Pittsburgh. In order to get the product reinstated, the email said, Brushes4Less would have to contact the law firm and work things out.

But when he tried to do that, Brushes4Less's owner discovered that Wesley & McCain didn't really exist. Its website showed a photo of lawyers that appeared to have been stolen from a different law firm in Missouri. (The "Wesley & McCain" web address now leads to a 404 message.) Its phone number didn't work, and its physical address appeared to belong to a different law firm altogether. The email address listed in the complaint--which Amazon passed along to Brushes4Less, urging the store's owner to resolve the matter directly--turned out to be fake as well.

As Brushes4Less's owner told CNBC reporter Eugene Kim, Amazon could have figured out that the complaint was bogus with about five minutes of detective work. Instead, it took two months for Amazon to reinstate the product. That meant that Brushes4Less's most popular item was not available for sale on Prime Day, which turned out to be Amazon's busiest shopping day ever. Not only that, because Brushes4Less uses Amazon's fulfillment service, the brush heads spent those two months in an Amazon warehouse, so Brushes4Less's owner couldn't sell them elsewhere either. He says the two-month delisting cost him about $200,000 in sales. He says he generates about $2 million in annual sales on Amazon overall.

Caught up in the fight against counterfeits.

The Brushes4Less story is far from unique. There's a very real problem of counterfeit items for sale on Amazon, so much so that the retail giant faces lawsuits over the sale of allegedly fake and ineffective solar eclipse glasses. Unfortunately, Amazon seems to be responding to the flood of fake items with a simple strategy: The moment it receives an intellectual property complaint about any item, it immediately delists the item and then suggests that the seller contact the lawyer in question directly to seek a resolution. While this approach may help Amazon remove knockoffs from the site faster, it leaves the door open for abuse by Amazon sellers or others who want to make trouble for their most successful competitors. CNBC says it found numerous cases where Amazon Marketplace sellers had products suspended after Amazon received a bogus complaint.

According to a former Amazon employee who now consults Amazon Marketplace sellers, Amazon staff is overwhelmed with intellectual property complaints and is slow to take action when told that a complaint is fake. As for Amazon, it would not comment to CNBC on this case specifically, but provided a general statement:

Fraud is prohibited on Amazon.com. If we discover that bad actors have abused our systems, we work quickly to take action on behalf of our customers, which includes sellers.

It did not explain the apparent discrepancy between its claim that "we work quickly to take action" on behalf of sellers and the Brushes4Less owner's report that it took two months to relist the toothbrush heads when Amazon staff could have determined in minutes that "Wesley & McCain" was a fake.

Amazon is reportedly adding staff to help deal with intellectual property claims, which may possibly help the company deal with fraudulent complaints in a more timely way. If you sell brand name products on the Amazon Marketplace, you'd better hope so. Or else that you don't become successful enough to become a target yourself.

Published on: Sep 9, 2017
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