Click here to listen to the podcast episode on the topic of fakeshops:
Episode 18: How do I buy safely online?
Podcast channel of Verbraucherzentrale NRW
Click here to got to Fakeshop-Finder of VZ NRW
Excerpt from the transcript of the interview with Joachim Feist:
Dorian Lötzer: Joachim Feist and his company mindUp have been dealing with the issue of fakeshops for more than 7 years now. Originally, they wanted to index German-language websites. But they noticed how many sites lacked an imprint, for example. And many of them were classified as online shops. They wanted to track these down. They wanted to see what contact persons there were in Germany who could take action against them. And then they decided to take action themselves.
Joachim Feist: And about two years ago we said to ourselves, "Now we'll just do the part that we're particularly good at - the technical part. And for the last two years, we have been using these techniques - crawling and artificial intelligence - to search for new fake shops on a daily basis. To do this, we fill search engines with shopping-affine terms and then examine all the new domains that appear. And we can then identify new fake shops with the help of similarities that this artificial intelligence can recognise.
Dorian Lötzer: I'll come back to what has become of this technical part later. But all this work has also led to Joachim Feist now being a real expert on the subject of fake shops in Germany. So I was hoping that he could give me a feel for how big this problem really is.
Joachim Feist: Regarding the extent of the damage caused, I think we did a test order in a fake shop 3-4 years ago. At that time it was about football jerseys and in fact it was a fake shop, I would say, from the other side of the globe.
The credit card was then charged by a Chinese company, in this case, and we were then able to look on the internet through this name, which appeared on the credit card invoice, for this jersey, which we never received - are there now other people affected? And if you extrapolate something like that, you come to the conclusion that such a fake shop operator with a payment term like this just appeared by name and over a period of, let's say, 6-8 months, in which something like this is online, can earn money in the one to two-digit million range.
And the whole thing was just a payment target, which doesn't mean that this fake shop operator doesn't bring his money to himself in other ways.
Dorian Lötzer: Unfortunately, even Joachim Feist cannot give more precise information on the amount of damage caused by fake shops. However, he estimates that in Germany alone, millions of euros are involved. And that is no small problem.
But not all fake shops are the same. And you can't just put any site on the internet, put your feet up and wait for the money to flow in. But where there is money, there is also a "market". And I wanted to find out more about that.
Joachim Feist: There are also various "fake shop operators" (I'll call them that now). We see these fakeshops that still don't have an imprint. We assume that they are somehow controlled from the other side of the globe. They also operate in different languages and their approach is "mass instead of class", as I call it now. Then there are fake shop players who are more local. They know exactly what a fake shop or an online shop has to have - that there has to be an imprint, that there has to be a data protection statement somewhere, that the right of withdrawal has to be discussed somehow. And they tend to do "class instead of mass," which means that they might have 23 fakeshops online in parallel and only add the new fakeshops when someone has closed the old one.
And what you also have to realise is that this fakeshop activity has actually increased. On the one hand, people say that it is perhaps even used by organised crime today, because it is actually a form of fraud that is much less risky than selling drugs now.
Dorian Lötzer: This insight is important. Because in the case of fakeshops, the assumption is often that it's about lone offenders in some cellar. And then the problem tends to be neglected. In reality, many operators of such fake shops have become highly professional, sometimes with company-like structures. And this professionalism is also reflected in their strategies.
Sometimes fakeshops have a really good understanding of the market. When graphics cards for computers are hard to get, they focus on them. If sneakers or game consoles are in demand, they target them. The higher the victims' desire to get their product, the easier it is for fakeshops.
Joachim Feist: Well, it has to be said that these fake shop operators are very creative and, on the other hand, we are also seeing more and more criminal machinations. This means that a fake shop operator actually has the same problem as a normal online shop. He puts his fake shop online and nobody knows it. There will also be no one who says, "Oh, I recently shopped in this nice new shop, everything went to my satisfaction." That doesn't apply to him either. And that means for him, he might have to place advertisements, but that is of course also risky, because he then has to work with falsified account details again at these places where he places advertisements, or he has to give his address data.
In fact, we noticed about 4-5 years ago that fake shops are also hacking third-party websites, especially in the area of prescription drugs, where there is a lot of money to be made. That is, in order to get into the search engines, they attach substandard .de addresses with their content. And then suddenly I see a completely normal German-language domain in the search engine, which suddenly becomes visible with its sub-pages for this fake shop. The website remains completely normal from the start.
This means that when we talk to website operators about the fact that they have been hacked, they say, "My website looks the same as always. Everything is normal, there's no problem", but coming from the search engine, the click is then redirected to the fake shop.
Dorian Lötzer: Fake shops have become extremely professionalised. They not only exploit the algorithms of search engines in order to appear at the top with their advertisements, but sometimes also hack into other websites in order to profit from their customers' trust. Depending on the type of shop we are talking about, the times are also over when you could still tell at first glance that it was a scam. It is becoming increasingly difficult to quickly identify dubious shops on the internet.