Homepage / Technology / Amazon was tricked by a fake law firm into removing a hot product, costing this seller $200,000
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Technology

Amazon was tricked by a fake law firm into removing a hot product, costing this seller $200,000

Shortly before Amazon Prime Day in July, the owner of the Brushes4Less store on Amazon’s marketplace received a suspension notice for his best-selling product, a toothbrush head replacement.

The email that landed in his inbox said the product was being delisted from the site because of an intellectual property violation. In order to resolve the matter and get the product reinstated, the owner would have to contact the law firm that filed the complaint.

But there was one problem: the firm didn’t exist.

Brushes4Less was given the contact information for an entity named Wesley & McCain in Pittsburgh. The website wesleymccain.com has profiles for five lawyers. A Google image search shows that all five actually work for the law firm Brydon, Swearengen & England in Jefferson City, Missouri.

The phone number for Wesley & McCain doesn’t work while the address belongs to a firm in Pittsburgh called Robb Leonard Mulvihill. The person who supposedly filed the complaint is not registered to practice law in Pennsylvania. One section on Wesley & McCain’s site stole language from the website of Colby Law Office.

The owner of Brushes4Less agreed to tell his story to CNBC but asked that we not use his name out of concern for his privacy. As far as he can tell, and based on what CNBC could confirm, Amazon was duped into shutting down the seller’s key product days before the site’s busiest shopping event ever.

“Just five minutes of detective work would have found this website is a fraud, but Amazon doesn’t seem to want to do any of that,” the owner said. “This is like the Wild Wild West of intellectual property complaints.”

Brushes4Less is just one small business among millions that use Amazon’s massive global operation to reach customers. But as the marketplace has grown to account for more than half of all goods sold on the site and as Amazon has expanded its dominance across online commerce, seller complaints have multiplied.

Hot items are booted and innocent sellers are suspended, victims of malicious complaints that some experts suspect are coming from rival sellers masquerading as lawyers. Just ahead of last year’s Black Friday and Cyber Monday rush, a number of Samsung device sellers were suspended due to mistaken claims of infringement. And sellers of hot brands ranging from Nike to Michael Kors say they’ve received violation claims and suspension notices even if they’re buying inventory from legitimate distributors.

“Virtually any person can push the right buttons to get Amazon’s attention for particular issues,” said Paul Dworianyn, founder of Amazon Seller Consulting, which helps brands on the site.

During the course of our reporting, CNBC heard of numerous cases in which complaints were made by a competitor or a third-party law firm with bogus contact information. One seller of Keurig coffee pods was recently reinstated on Amazon after being suspended due to a fake complaint filed by a competitor, Dworianyn said.

The owner of Brushes4Less said he generates about $2 million in annual sales on Amazon. In addition to electronic toothbrush heads, his storefront features brushes for cleaning auto parts as well as wine tote bags, a camera lens and a set of microfiber towels.

He said the issue with Amazon was finally resolved on Tuesday after two months of waiting. Losing his best-selling item — a particular type of toothbrush replacement head — resulted in at least $200,000 in lost sales, he estimates. During that time, his inventory was in Amazon’s fulfillment center and inaccessible.

The Brushes4Less owner suspects the complaint was filed by a competitor and isn’t even sure of the specific alleged violation. He hired an intellectual property law firm, which attempted to reach the complainant five times from July 21 to Aug. 3.

“Due to the complainant’s failure to respond to our attorney’s attempts at contact (or even confirm receipt), we believe these complaints are baseless and were filed in bad faith,” the Brushes4Less owner wrote in a memo to Amazon.

Amazon didn’t provide a comment on the Brushes4Less incident. The company emailed the following statement to CNBC:

“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. If a seller believes we’ve made a decision that requires further review, we encourage them to contact us directly so we can investigate and take the appropriate action.”

For sellers, Amazon doesn’t offer much by way of guidance in resolving IP issues. In the notice sent to Brushes4Less, the company provided little more than the complainant’s email address, which turned out to be fake.

Brydon Swearengen said in a statement that it has nothing to do with the hoax and that its images have been stolen.

“Brydon, Swearengen & England P.C. has no association with the ‘Wesley McCain’ web site which has misappropriated attorney photographs from our web site,” the firm wrote in an email. “We have brought this matter to the attention of the Missouri Bar and the Pennsylvania Bar Association.”

CJ Rosenbaum, a lawyer who represents suspended Amazon sellers, is getting used to these types of stories. False claims from sellers with malicious intent have become common, he said, because Amazon offers so little resistance to such trickery.

“There are so many good sellers who get suspended needlessly,” said Rosenbaum, who’s also the author of the “Amazon Law Library,” published last year.

Amazon’s aggressive suspension practices of late followed an explosion of counterfeit sales in recent years and a series of negative news stories and unflattering lawsuits.

Reinstatement can be a major challenge for sellers facing IP violations. There are so many merchants to replace them that Amazon does almost nothing to help suspended sellers get back up and running, said Chris McCabe, a former Amazon employee who now helps sellers get reinstated and stay compliant.

“Amazon does little to vet the complaints to make sure they are legitimate, and typically they refer you to the accusing party for any info or resolution,” McCabe said. “Amazon internal teams are overwhelmed with these complaints and are very slow to react to fake submissions.”

McCabe said Amazon has recently beefed up its appeals team to combat these types of problems. Still, while the time to get complaints overturned has sped up, false submissions still come in on a daily basis, he said.

Amazon’s business has yet to suffer from its marketplace chaos. Sales rose 25 percent last quarter and the stock is up 31 percent in 2017. But the seller problems are putting the company’s reputation at risk, McCabe said.

“If Amazon continues to process brand or buyer complaints as they are now, suspended accounts will continue to spike,” he said. “It undermines faith in the marketplace.”

Source: Tech CNBC
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