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06/10/2020

3M, Amazon collaborate against e-commerce fraud

Dan Berthiaume
Senior Editor, Technology
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Amazon is supporting 3M legal action against Amazon sellers who allegedly sold counterfeit N95 respirators.

3M has filed suit in federal court in California asserting that a seller on Amazon defrauded the CPG/healthcare giant’s customers by charging grossly inflated prices for fake, defective, and damaged respirator products. The lawsuit alleges that Mao Yu and his affiliated companies falsely advertised as third-party sellers on Amazon under the 3M brand. 

The defendants, according to 3M’s complaint, charged unsuspecting customers more than $350,000 when the customers responded to false listings that claimed to be reselling authentic N95 respirators, while actually selling damaged and fake goods at highly-inflated prices. 3M alleges that the defendants charged prices for the fraudulent respirators that exceeded as much as 20 times its N95 respirator list prices. 

Amazon learned that the defendants misrepresented what would be delivered for excessive prices, and that buyers had received non-3M respirators, fewer items than purchased, products in suspect packaging, and defective or damaged items. The e-tailer has blocked the accounts on its platform.

The complaint seeks both monetary damages and injunctive relief to require the defendants to cease their unlawful activities. 3M says it will donate any damages recovered to COVID-19-related nonprofit organizations.

“3M customers deserve authentic products at fair prices, and this scam is aimed at exploiting the demand for our critical products during the pandemic using 3M’s name connected with price gouging and counterfeiting,” said Denise Rutherford, 3M senior VP, corporate affairs. “Our collaboration with Amazon is one of the important ways we are working to prevent and combat fraud, and we will report this unlawful activity to law enforcement, as well.”

“There is no place for counterfeiting or price gouging on Amazon and we’re proud to be working with 3M to hold these bad actors accountable,” said Dharmesh Mehta, Amazon VP, customer trust and partner support. “Amazon has long-standing policies against counterfeiting and price gouging and processes in place to proactively block suspicious products and egregious prices. When we find a bad actor violating our policies, we work quickly to remove the products and take action on the bad actor, as we’ve done here, and we welcome collaboration from brands like 3M.”

Amazon has been heavily focusing on identifying and removing counterfeit items from its site, particularly the third-party Amazon Marketplace platform. In May, the e-tailer reportedly patented a new blockchain solution designed to provide verifiable tracking of items through the supply chain. In February 2019, Amazon launched Project Zero, a program providing automated protections that continuously scan Amazon’s online stores using its machine learning capabilities.

Amazon and other online retailers have been coming under increased pressure from the U.S. government to take a more active role in preventing fraudulent and counterfeit transactions from occurring on their platforms.