Amazon spent $1.2 billion fighting fraudulent e-commerce products in 2022

Retail giant Amazon says that it spent $1.2 billion and employed over 15,000 people during 2022 in rising efforts to fight rising fraud in its online marketplace, according to the “Amazon Brand Protection Report” released this week.

From its earliest days, the e-commerce giant has struggled with the double-edged sword of every e-tailer, which are the fake reviews and counterfeit products that are so easily pitched in a virtual world. 

Seattle-based Amazon says it has boosted its efforts to fight those trends in order to maintain trust with customers—that they will receive an authentic product—and trust with vendors—that they will be free from competition with bad actors. The employees dedicated to that assignment include machine learning scientists, software developers, and expert investigators, who collaborate to protect customers, brands, selling partners, and the company’s store from counterfeit, fraud, and other forms of abuse, according to a statement by Dharmesh Mehta, vice president, Worldwide Selling Partner Services, for Amazon.

The company’s investment is just the latest effort by vendors and e-tailers to fix the problem. For example, the power tool industry trade association group the Power Tool Institute (PTI) warned this week that supply chain pressures have spurred an influx of counterfeit batteries. PTI said that “suspiciously lower-priced power tool batteries” are likely too good to be true, and are in fact often revealed to be knock-offs, counterfeits, or unauthorized replacements. The recent rise in frequency of the scam has happened because scammers are leveraging vulnerabilities in the global supply chain and the public’s continuing need for new batteries to sell and distribute a wider variety of fakes, the group said. 

In another example, the American Apparel & Footwear Association (AAFA) recently applauded a “Notorious Markets report” issued by the Office of the United States Trade Representative (USTR) and called for a tighter focus on the retail platforms that sell counterfeit goods. “We must do all that we can to stop counterfeits globally, including those promoted and sold on platforms based in the United States. As President Biden has stated, all platforms must be held accountable. Platforms have allowed and enabled the promotion and sale of counterfeit products, all while harming American consumers,” AAFA President and CEO Steve Lamar said in a release.

Despite that rising threat, Amazon says its efforts are paying off. The company’s report says that the number of “bad actor” attempts to create new selling accounts decreased from 6 million attempts in 2020 to 2.5 million attempts in 2021 and 800,000 attempts in 2022.

In other statistics, Amazon said that brands found fewer “infringing products” last year in its online store. The number of valid notices of infringement submitted by brands in the Amazon Brand Registry decreased by more than 35% from 2021. And the company says it has confiscated many of the frauds that do make it in to the store. Amazon identified, seized, and disposed of more than 6 million counterfeit items in 2022, the report said.