CT officials target online stolen goods sales
As some of the largest retailers press Congress for a law to stop the online sale of stolen merchandise, Gov. Ned Lamont and Attorney General William Tong are convening a task force to thwart organized retail crime rings in Connecticut by having government entities work directly with the private sector.
Last week, the CEOs of some of the largest retailers in the country pressed Congress to vote on The Inform Act. An acronym for Integrity, Notification, and Fairness in Online Retail Marketplaces, the Inform Act would require online marketplaces to collect bank account numbers of third-party sellers that hit a certain threshold of volume on their platforms, as well as copies of ID cards like driver’s licenses and contact information.
The law would apply to those who sell 200 new or unused products annually with at least $5,000 in aggregate revenues. Violations would expose individuals or businesses to Federal Trade Commission penalties intended to thwart unfair or deceptive business practices. Online marketplaces would be required to suspend the account of any high-volume sellers that fail to re-certify their information at least annually.
“The Inform Act is a beginning step,” U.S. Sen.
Richard Blumenthal, DConn., said Tuesday in an interview with Hearst Connecticut Media. “Consumers ought to have confidence that the products they buy online are not counterfeit, unsafe or stolen. I’m very interested in holding the tech platforms accountable.”
At a CVS Pharmacy in West Hartford on Wednesday morning, Lamont and Tong announced plans to seek more cooperation from big tech firms to combat organized retail crime.
On Tuesday, Tong told Hearst Connecticut his expectation that online retailers like Amazon and eBay do more to identify those selling fenced goods and alert authorities, whether through artificial intelligence or people scanning transactions for red flags.
“I’m giving them the opportunity to show me that they are willing to make the investment of resources and time and energy to stopping the flow
of illegal goods,” Tong said.
An Amazon spokesperson told Hearst Connecticut on Wednesday that the company supports federal legislation to tackle the problem. Amazon spends more than $700 million annually to ferret out fraud and abuse on its platform, according to the spokesperson, and implemented a video conferencing policy last year to verify the identify of sellers.
“Amazon does not allow third-party sellers to list stolen goods in our store, and we work closely with law enforcement, retailers, and brands to stop bad actors and hold them accountable, including withholding funds, terminating accounts, and making law enforcement referrals,” an Amazon statement reads. “We regularly request invoices, purchase orders, or other proofs of sourcing when we have concerns about how a seller may have obtained particular products that they want to sell.”
On Wednesday, Tong noted the sophistication of “bigger bosses” in his words who are recruiting thieves off the street locally and then selling stolen merchandise online, whether pricey items like digital devices or basics like shampoo. Wayne Pesce, president of the Connecticut Food Association, asked local police departments to consider stationing squad cars regularly in retail lots this holiday season as a deterrent.
After Illinois Attorney General Kwame Raoul formed a task force in September to address organized retail crime by coordinating the efforts of detectives, retailers and online merchants, Raoul announced last week the task force’s first major bust in recovering millions of dollars of merchandise squirreled away in selfstorage facilities in the Chicago area.
In an early December press conference, Raoul said people can be alert for clues on whether items for sale online might be hot, whether priced far below competing products or other telltales like the lack of any warranty option for expensive products like appliances.
“This is something that’s evolving for law enforcement nationally,” Raoul said. “We can’t do it alone.”
In 2010, the Connecticut General Assembly made organized retail theft a class C felony in cases where thieves sell at least $10,000 of merchandise, and a class D felony otherwise. The maximum penalties are $10,000 and 10 years in prison for class C felonies, and five years and $5,000 for class D.
Blumenthal argues that online sellers enjoy “virtually complete immunity” due to an element of federal law designed to give them some protections in instances where their platforms are used by third parties for illicit purposes.
The initial federal legislation was proposed last spring by U.S. Sen. Dick Durbin, D-Ill., and Sen. Bill Cassidy, R-La., along with U.S. Rep. Gus Bilirakis, R-Fla., who later joined with Rep. Jan Schakowsky, D-Ill., on a version of the legislation in the House of Representatives.
“Online marketplaces are the No. 1 place for these professional crews to dispose of their products,” said Ben Dugan, director of retail crime prevention and corporate investigations for CVS based in Woonsocket, R.I., speaking at a November hearing of the U.S. Senate Judiciary Committee. “This is not a big-city crime — this occurs in all 50 states. Thefts and organized retail crime occur just as much in low-crime suburban neighborhoods as they do in America’s largest cities.”
While Dugan praised eBay for its efforts assisting in investigations, he argued no online marketplace has adequate transparent systems to prevent the criminal resale of stolen or counterfeit products.
Connecticut is home to one company in Potoo Solutions that polices Amazon and other websites for any bad actors among thirdparty sellers. More than 500 product companies retain the Norwalk firm to “protect” their brands.
CEO Fred Dimyan said Amazon and eBay have been “mostly ahead of Congress on this,” but crime rings are able to avoid detection by stealing in mass quantities and then flipping those goods online in small batches to evade detection.
“Sometimes the person selling it and the person stealing it are different people,” Dimyan said Tuesday. “You have a lot of people selling on the online platforms that are looking for discounts on an item, and now you have those organized retail crime units selling low quantities to those sellers. It could be quite sophisticated and nearly impossible to ... track and tie it all together.”
Tong said Amazon, eBay and other companies can start by sharply expanding the resources they are committing.
“My response to, ‘Well, this is hard,’ is ‘Well, it’s your job,’” Tong said. “It’s your responsibility — we don’t want excuses, we want action.”