Consumer Groups Issue Warning: Holiday Shoppers Beware Of Dangerous And Fake Products Sold On Amazon

WASHINGTON, Dec. 11, 2020 /PRNewswire/ -- Today American Family Voices, Public Citizen and Athena issued a warning to Americans: Beware of the potentially dangerous and fake products sold on Amazon during this holiday season. Numerous press and investigative reports document Amazon's apparent pattern of selling banned, unsafe, counterfeit or mislabeled products, including some under its own AmazonBasics brand and with the "Amazon's Choice" label. For years, Amazon, has abused Section 230 of the Communications Decency Act, to claim that it has no liability when the products it sells are defective, or when they injure or kill consumers.

The consumer watchdogs are asking federal policymakers to end this practice, and to require that online retailers like Amazon are liable when they sell fake, defective and dangerous products just like their brick-and-mortar competitors.

"This holiday season, more people are turning to online retailers like Amazon to avoid being exposed to COVID-19," said Lauren Windsor, executive director of American Family Voices. "And this week many of us will rush to order products online to send to kids, grandkids and other relatives so they arrive before the holidays. What unwary consumers may not know is that unlike other brick-and-mortar retailers, Amazon uses an unintended loophole in the law to claim it has no liability for selling dangerous and defective products. That helps explain why they have a pattern of selling dangerous products with such impunity. Consumers should beware."

In response to exposés by CNN and the Wall Street Journal, Amazon agreed to remove a variety of banned, recalled, unsafe and fake products that media outlets found for sale on its platform. But the publications reported that within weeks, the same goods were listed for sale on Amazon again.

"Amazon has rigged the rules so it can rake in billions while dodging safety inspections and then responsibility when the products it sells hurt people or burn down houses," said Lori Wallach, director of Public Citizen's Global Trade Watch. "Whatever one thinks should be Big Tech's responsibility for content on their platforms, certainly shielding mega-retailers like Amazon from liability when they sell products that hurt people was never the intention of policy designed to protect free speech on the Internet. Combine this liability dodge with Amazon's abuse of the "de minimis" loophole in U.S. Customs law that allows its billions per week of Chinese imports to skirt border safety inspection and Amazon could threaten perfect people nationwide with a flood of dangerous products."

The "de minimis" loophole allows individual Americans to bring goods worth $800 or less into the United States without paying taxes or being inspected. Using huge shipping containers of goods pre-labeled to consumers' addresses, Amazon pretends that specific consumers, not Amazon, are importing products. Billions in such goods weekly from China and other nations thus dodge consumer safety and other border inspections and avoid millions in taxes that brick and mortar stores pay on identical goods. This combined with the waiver that Amazon claims Section 230 provides against product liability creates a dangerous dynamic for holiday shoppers.

"With the pandemic raging and winter holidays coming up, we're all relying more on online shopping. Customers deserve products that aren't dangerous or counterfeit. We also deserve to know that our shopping won't raise the risk that workers will be injured or exposed to COVID-19, and that it won't feed a corporate behemoth that uses data to target Black, brown, and immigrant communities. This holiday season, it's clear that Amazon has betrayed the trust the public once put in this American institution," said Dania Rajendra, Director of the Athena Coalition.

"Jeff Bezos's corporation has ignored growing concerns about unsafe products and used their monopoly power to avoid any accountability for this problem, just like it has used its power to evade responsibility for their abuse of workers, small businesses, and our communities. Amazon's callousness toward us all means elected officials must step in, curb Amazon's power, and break the corporation up," concluded Rajendra.

Facts You Should Know

• Amazon takes a 15 percent cut of all goods sold by third-party sellers, even if the product is counterfeit.
• Even products from Amazon's own brand, AmazonBasics, and the products it promotes with its "Amazon Choice" endorsement were found to be defective or dangerous in repeated investigative reports and reviews from consumers
• Unlike brick-and-mortar retailers, Amazon claims it has no liability for dangerous and defective products it sells.

THE FACTS ABOUT AMAZON'S FAKE AND DANGEROUS PRODUCTS

• A Wall Street Journal investigation documented that Amazon offered thousands of banned, unsafe or mislabeled products including dangerous children's products for sale. "A Wall Street Journal investigation found 4,152 items for sale on Amazon.com Inc.'s site that have been declared unsafe by federal agencies, are deceptively labeled or are banned by federal regulators—items that big-box retailers' policies would bar from their shelves. Among those items, at least 2,000 listings for toys and medications lacked warnings about health risks to children." [Wall Street Journal, 8/29/2019]
• The New York Times summarized other reports showing a continuing pattern of Amazon abuses. "A major Wall Street Journal investigation recently revealed that Amazon has listed 'thousands of banned, unsafe or mislabeled products' from dangerous children's products to electronics with fake certifications. The Verge reported that even Amazon's listings for its own line of goods are 'getting hijacked by imposter sellers.' CNBC found that Amazon has shipped expired foods—including baby formula—to customers, pointing to an inability to monitor something as basic as an expiration date." [New York Times, 2/11/2020]
• In September 2020, CNN reported that while Amazon says "Safety is a top priority," it has allowed many third-party sellers that sell dangerous products. "Amazon has already been under intense scrutiny for allowing third-party sellers with allegedly dangerous offerings to do business on the site, and multiple court rulings have found that the retailer can be held liable for defective items sold in its third-party marketplace. The retailer said 'safety is a top priority' at the company and that it takes a number of steps to ensure all AmazonBasics products are safe and high quality, such as selecting experienced manufacturers, monitoring customer feedback and testing items to ensure they pass safety and compliance standards both before and after they are available." [CNN, 9/10/2020]
• CNN reported that Amazon's products have exploded and harmed customers. "Since 2016, at least 1,500 reviews, covering more than 70 items, have described products exploding, catching on fire, smoking, melting, causing electrical malfunctions or otherwise posing risks, according to an analysis of AmazonBasics electronics and appliances listed on its website." [CNN, 9/10/2020]
• Of the products deemed unsafe from the Wall Street Journal investigation, a significant amount of the products were manufactured in China. "The Journal earlier this year uncovered 10,870 items for sale between May and August that have been declared unsafe by federal agencies, are deceptively labeled, lacked federally-required warnings, or are banned by federal regulators. Amazon said it investigated the items, and some listings were taken down after the Journal's reporting. Of 1,934 sellers whose addresses could be determined, 54% were based in China, according to a Journal analysis of data from research firm Marketplace Pulse. Amazon's China recruiting is one reason why its platform increasingly resembles an unruly online flea market. A new product listing is uploaded to Amazon from China every 1/50th of a second, according to slides its officials showed a December conference in the industrial port city of Ningbo. Chinese factories are squeezing profit margins for middlemen who sell on Amazon's third-party platform. Some U.S. sellers fear the next step will be to cut them out entirely." [Wall Street Journal, 11/11/2019]
• Many Chinese vendors on Amazon do not meet manufacturing standards in the United States. "The challenge for Amazon is that as it has allowed so many sellers into its marketplace, it's also made it difficult to police for dangerous goods. And some Chinese manufacturers and sellers, which it aggressively recruited to create a catalogue of products so extensive that no other retailer could match it, do not manufacture products to standards set by U.S. lawmakers and regulators." [Washington Post, 8/29/2020]
• Amazon profits around 15% off the sales of third-party sellers, whether or not they are counterfeit. "The Seattle-based e-commerce giant keeps a roughly 15 percent cut of the sales of third-party sellers regardless of whether the product is counterfeit. But losing out are not just luxury brands—many of the counterfeit products include safety items, baby food and cosmetics, according to recent testimony to the Commerce Department, which is probing counterfeit sales online." [Washington Policy Center, 12/14/2019]
• The Washington Post reported that Amazon has failed to protect customers from fake products. "Amazon executives have publicly lamented the scourge of counterfeits, saying they have spent hundreds of millions of dollars and hired thousands of workers to police its massive market of third-party firms that use the e-commerce site to sell their goods. But as the availability of the fake Hermès bracelet shows, Amazon's system is failing to stanch the flow of dubious goods even with obvious examples of knockoffs." [Washington Post, 12/14/2019]
• Sellers use Facebook to flood Amazon with fake reviews. "Many of these fraudulent reviews originate on Facebook, where sellers seek shoppers on dozens of networks, including Amazon Review Club and Amazon Reviewers Group, to give glowing feedback in exchange for money or other compensation. The practice artificially inflates the ranking of thousands of products, experts say, misleading consumers." [Washington Post, 4/23/2018]
• New York Times also reported that the majority of products on Amazon are sold by third-party sellers; many of these third-party sellers are selling fake merchandise. "Most people don't realize this, but the majority of listings on Amazon aren't actually for items sold by Amazon—they're run by third-party sellers. And even though many, many third-party sellers are upstanding merchants, an awful lot of them are peddling fakes." [New York Times, 2/11/2020]
• The Verge reported that Amazon's Marketplace was "so chaotic" that even Amazon's brand, AmazonBasics, had been "hijacked" by third-party sellers. "Amazon's marketplace is so chaotic that not even Amazon itself is safe from getting hijacked. In addition to being a retail platform, Amazon sells its own house-brand goods under names like AmazonBasics, Rivet furniture, Happy Belly food, and hundreds of other labels. Sellers often complain that these brands represent unfair competition, and regulators in Europe and the United States have taken an interest in the matter. But other sellers appear to have found a way to use Amazon's brands for their own ends." [The Verge, 8/29/2019
• Amazon has shifted responsibility to sellers to identify counterfeit versions of products. "Throughout the cases, Amazon has taken advantage of its unusual legal status as half-platform, half-store. If Home Depot sells a defective bandsaw, the store can be sued alongside the company that made the product. That liability means conventional retailers have to be careful about the products they stock, making sure every item on store shelves has passed at least the most basic product safety requirements. States have passed different versions of product liability laws, but they all put the burden of fault on more than just the original manufacturer." [The Verge, 1/28/2020]
• Amazon has a history of selling dangerous products in its AmazonBasics collection. "Global online marketplace Amazon has recently sparked controversy surrounding its 'Basics' line of products. Several products have been reported as defective or dangerous, and some have even caught fire or exploded. Despite the recorded dangers of some of these products bearing the Amazon name, many still remain on the market and are distributed globally each day. Launched in 2009, AmazonBasics was created to offer products, including consumer electronics, household appliances, and office accessories, at a similar or higher quality than name brands, but at a more affordable price. [Screen Rant, 9/10/2020]
• Amazon has attached "Amazon's Choice"—products that Amazon recommends as highly rated—to products with safety concerns. "Americans searching for last-minute Christmas gifts on Amazon.com will get lots of results that include 'Amazon's Choice' products. Many shoppers will assume that is a dependable stamp of approval. [...] Amazon attaches the badge to countless legitimate listings, but also to products regulators have raised safety concerns about, that make false claims or whose listings appear to have been manipulated by sellers to get the endorsement. Amazon sometimes gives the badge to items that violate its own policies." [Wall Street Journal, 10/22/2019]
• Wall Street Journal reported that Amazon has endorsed products with safety concerns. "Amazon attaches the badge to countless legitimate listings, but also to products regulators have raised safety concerns about, that make false claims or whose listings appear to have been manipulated by sellers to get the endorsement." [Wall Street Journal, 12/22/2019]
• Since 2018, only two AmazonBasic products have been publicly recalled by Amazon despite thousands of comments warning of dangerous malfunctions. "In the United States, Amazon publicly recalled two AmazonBasics items in 2018 and 2019, after the company received 53 reports in the US about power banks overheating and 25 about versions of a space heater overheating, burning or sparking. It said it proactively notified the CPSC of the results of the company's own investigation and its intent to recall the items. Beyond these two official recalls, the company has never publicly acknowledged that AmazonBasics products have any safety issues." [CNN, 9/10/2020]
• University of Maryland's Center for Advanced Life Cycle Engineering tested some of AmazonBasics damaged products in a lab and found many of them to be highly unsafe. "CNN obtained two damaged AmazonBasics products from customers: a microwave that a customer said caught fire and a USB cord a user said overheated and melted. These were tested by researchers at the failure analysis lab at the University of Maryland's Center for Advanced Life Cycle Engineering (CALCE) at CNN's request. The USB cord was too burned for researchers to determine what had gone wrong. The microwave testing found that the design of the panel covering the heating device inside the microwave could result in the machine catching on fire, and determined that the way the panel was secured could allow debris such as food or grease to collect behind it and possibly ignite. As soon as the researchers turned it on, the microwave began sparking and smoking, causing it to react as if its user put foil or other metal inside. The testing was cut short when the lab was closed due to Covid-19. 'There's a risk in using this machine for sure, and it's a safety risk because this clearly heated up to the extent a fire could occur,' said engineering professor Michael Pecht, who is the founder of CALCE and has previously assisted in government safety investigations. 'This is more than a reliability problem, this is a potential safety problem.'" [CNN, 9/10/2020]
• CNBC reported that Amazon Marketplace has shipped expired food to customers, including baby formula and coffee creamer; loopholes in Amazon's technology and logistics system causes this to happen without accountability. "From baby formula and coffee creamer to beef jerky and granola bars, items are arriving spoiled and well past their sell-by date, Amazon customers say. Interviews with brands, consumers, third-party sellers and consultants all point to loopholes in Amazon's technology and logistics system that allow for expired items to proliferate with little to no accountability. Consumer safety advocates worry that as the marketplace grows, the problem will only get worse." [CNBC, 10/20/2019]
• Department of Homeland Security said the sale of counterfeit and pirated goods by third-party sellers on online marketplaces (like Amazon) can threaten national security. "In the United States, e-commerce year-over-year retail sales grew by 13.3 percent in the second quarter of 2019 while total retail sales increased by only 3.2 percent as brick-and-mortar retail continued its relative decline. For example, Amazon reports third-party sales on its marketplace grew from $100 million in 1999 to $160 billion in 2018.6 In 2018 alone, Walmart experienced an e-commerce sales increase of 40 percent. Counterfeits threaten national security and public safety directly when introduced into government and critical infrastructure supply chains, and indirectly if used to generate revenue for transnational criminal organizations. Counterfeits also pose risks to human health and safety, erode U.S. economic competitiveness and diminish the reputations and trustworthiness of U.S. products and producers." [Department of Homeland Security, Combatting Trafficking in Counterfeit and Pirated Goods, accessed 10/19/2020]
• A rechargeable battery port purchased from AmazonBasics overheated and melted in a home, this product had over 20 reviews detailing similar events. "New mom Leeona Smail posted her review about an AmazonBasics battery charger late last year. When CNN reached her, she recounted how she and her husband were forced to evacuate their home in the middle of the night when they detected the unmistakable smell of something burning. They gathered their dogs, cats and 4-month-old baby by their front porch, called 911 and waited for help to arrive. It wasn't until after the firefighters left that the Smails said they found what they believed awas the culprit: an AmazonBasics battery charger. They had used the device for several years to charge batteries. But this time, Smail said, after unplugging it from the wall and placing it in a box on their coffee table, it began to melt and smoke. When the fire chief returned the next day to check on them, she said, he was amazed to see the source of the smell. A Vandergrift, Pennsylvania fire chief confirmed that his team was dispatched to investigate 'a smoke odor and light haze' at the Smail home. He said they ultimately learned that a battery charger 'overheated and melted,' and said it was unclear whether it would have caused the house to catch fire if it hadn't been found. At least 21 other reviews about the same battery charger, which had around 2,000 total reviews at the time of CNN's analysis, also said the device had overheated, melted or burned. Three described the same situation that Smail reported: the charger had not even been plugged in and had no batteries in it at the time." [CNN, 9/10/2020]
• An AmazonBasic surge protector burst into flames next to a baby nursery resulting in $1,000 worth of property damage. "Matt Citro purchased his AmazonBasics surge protector to protect his family from a fire. Instead, he said that in January 2018, the surge protector itself caught fire. A single phone charger was plugged into the device, but was not being used at the time. Sitting on the couch as his 9-month-old son slept in his nursery nearby, Citro said he noticed flames coming out of the surge protector -- turning it into what resembled a 'blowtorch.' He told CNN that he quickly pulled the flaming device from the wall. He wasn't injured but said he was left with more than $1,000 of damage after the surge protector burned a hole in the wall outlet and seared part of his wall. […] He had never experienced any electrical issues in his home before this, he said, and was convinced the AmazonBasics surge protector was to blame. 'DO NOT BUY THIS PRODUCT!!!...If I wasn't home my entire house would have burnt down from this cheap product,' Citro wrote in a review. 'I'm extremely disappointed in Amazon. We put a lot of faith in their products and to have (one) almost burn down my home does not make me trust them. This product has amazons name on it!' [CNN,9/10/2020]
• Within two years of Matt Citro posting his review on the explosive surge protector, more than 40 other customers reported similar issues on the same product. "Amazon continued to sell the surge protector for nearly two years after Citro posted his review, during which time more reviews about similar situations and other concerns piled up. More than 40 customers reported that the product was a fire hazard, had caused damage to their home or belongings or described other dangers." [CNN, 9/10/2020]
• Since 2016, at least 1,500 reviews on various Amazon products have detailed dangerous malfunctions including fire, smoking and melting. "But consumers have raised serious safety concerns about AmazonBasics items in complaints to government regulators and in reviews posted on Amazon's own website. Since 2016, at least 1,500 reviews, covering more than 70 items, have described products exploding, catching on fire, smoking, melting, causing electrical malfunctions or otherwise posing risks, according to an analysis of AmazonBasics electronics and appliances listed on its website. The reviews identified represent a small fraction of the overall purchases of the products, and fires caused by consumer electronics are not unique to Amazon branded items. […] Within the more than 1,500 reviews, many consumers explicitly called out items as potentially dangerous -- using terms such as 'hazard' or 'fire' or saying the product should be recalled. Around 30 items with three or more reviews like this remain for sale on Amazon.com today. At least 11 other products that fit this criteria were no longer for sale at the time of publication. Some became unavailable after CNN began its reporting, and at least four product pages were removed from the retailer's site entirely -- leaving behind dead URLs known by employees as 'dog pages.' Amazon confirmed that at least eight of these products had been under investigation, but said the company determined they all met its safety standards. [CNN, 9/10/2020]
• A consumer suffered second-degree burns and injuries to the throat after purchasing a phone charger sold on AmazonBasics, which ignited a house fire. "When firefighters arrived at Austin Parra's home on January 12, 2017, they could see smoke and the charred remnants of an office chair outside. Parra, then 20, had been transported to the hospital. His mother explained to firefighters that her son's chair caught on fire while he was sleeping, and he was burned as he carried the flaming chair outside. Anthony Dignoti, the Wethersfield, Connecticut, fire marshal in charge of investigating the incident, could see that the door and door frame were damaged by the fire as well. He noticed bowls strewn about, which he wrote in his official report had been filled with water in an attempt to extinguish the fire. […] Customers reported being shocked or burned in at least 100 reviews on Amazon's website. Parra from the Connecticut apartment fire said in a lawsuit that he suffered second-degree burns and injuries to his throat from smoke inhalation. Dignoti's report shows Parra spent around a day in the hospital. Parra sued Amazon in 2019, and the case settled. He and his attorney did not respond to interview requests." [CNN, 9/10/2020]
• A Wisconsin home was destroyed after a faulty bathtub adapter broke, resulting in serious flooding and water damage. "Luke Cain's Eau Claire, Wis., home flooded after an adapter for a faucet he purchased from a Chinese-based third-party seller on Amazon failed. State Farm insured Cain and took Amazon to court, arguing the retail giant was responsible for the damage. A Wisconsin judge denied Amazon's effort to have the case dismissed, and the company settled with State Farm without disclosing terms. Amazon declined to comment on the case. 'Insurance companies have the pockets they need to do the inspections and pursue the investigations necessary,' State Farm's lawyer in the case, Teirney Christenson, said. His firm currently has claims against Amazon pending in seven states thanks to the new trend, he added." [Washington Post, 8/29/2020]

SOURCE American Family Voices