Ads for Counterfeit Shoes Hitting Instagram

Counterfeit items sold online have been a difficult problem for e-commerce sites from Amazon.com Inc. (NASDAQ: AMZN) and eBay Inc. (NASDAQ: EBAY) to local sites that accept advertising that could be offering fake products at steep discounts to the price of the real thing.

Now Facebook Inc.’s (NASDAQ: FB) Instagram has appeared in the fraudsters’ sights. The ads are real but the goods are fake and it is easy for unwary Instagram users to be duped into clicking on that Shop Now button. By featuring fraudulent ads in users’ feeds, Instagram is “essentially validating” them and the social media site needs to do a better job of cleaning up the ads for fake products.

Putting an end to the selling of fake goods is a lot like playing whack-a-mole. When a website finds one and shuts it down, a new one can pop up with the same goods, a different name and the same owners within hours.

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According to marketing firm Digiday, one particularly vulnerable product is sneakers (or do you call them tennis shoes?) Here’s a tweet that includes an ad for Adidas’s popular Yeezy shoes at a discount of 70%. The pictured Yeezy 750 Boost retails for $350 and is advertised at a discounted price of $119. As the comments indicate, these are fakes.

Nike Inc. (NYSE: NKE) made some noise recently when it announced late last month that it would begin selling its gear on Amazon, the company was not looking to boost sales volume but to close down unauthorized resellers of its products, primarily shoes. And bad publicity from customers who purchase fake shoes through a direct link on Instagram or from a fraudulent Amazon reseller also hurts Nike’s brand.

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