As we’ve shared many times, until you trademark your business name, you do not own your business name. This alone is an incredibly important reason why every business owner needs to trademark their business name (after all, do you really want to be forced to rebrand, change your business name, and deal with any legal fallout that might also occur?)
However, a recent scenario that recently arose for one of our clients further highlighted the incredibly important need for trademarking: What recourse do you have in place if a scammer creates a website that copies your own, using your images, copy, similar domain, and even more person information?
Here’s how these situations usually unfold: you open up your inbox one day to find an angry email from a customer who never received their product/download/etc. You have no idea what they’re talking about-you check your records, and have no record of this customer.
You ask the customer to send you a screenshot of their purchase, and discover that while it looks like the customer purchased from your website, they actually purchased from a fake website mimicking your own.
In fact, I see this happen most commonly with small businesses. If you think about it, they’re the perfect target; what startup wants to pay a full 5 figure legal bill to pursue a fraud claim? Not many.
“The Federal Trade Commission received more than 2.1 million fraud reports from consumers in 2020, according to newly released data, with imposter scams remaining the most common type of fraud reported to the agency.
Online shopping was the second-most common fraud category reported by consumers, elevated by a surge of reports in the early days of the COVID-19 pandemic. Internet services; prizes, sweepstakes, and lotteries; and telephone and mobile services rounded out the top five fraud categories.
Consumers reported losing more than $3.3 billion to fraud in 2020, up from $1.8 billion in 2019. Nearly $1.2 billion of losses reported last year were due to imposter scams, while online shopping accounted for about $246 million in reported losses from consumers.
Just over a third of all consumers who filed a fraud report with the FTC—34 percent—reported losing money, up from just 23 percent in 2019.”
Here’s the way it usually plays out: a scammer buys a domain that is just one or two letters off from your own-close enough for customers to easily confuse. They copy your website copy, your images, most likely your legal documents, and they link to your social media accounts. They may even put your own phone number and business address on the site. For all intents and purposes, it looks legit.
Customers begin purchasing, and never receive their products or downloads. They begin to get angry. Some may reach out to you directly asking where their purchase is, but a good number of them will air their grievances on public forums, such as leaving google reviews, social media reviews, or contacting the Better Business Bureau.
If enough time has elapsed by this point, the scammer may even be able to set up website redirects, so that potential customers landing on your website are immediately redirected to the fake website.
It’s worth repeating: no business is too small to be targeted. The US Department of Justice literally counts these cases by the minute, they occur so frequently. And while yes, you should get the FBI involved (more on this below), know that these are just some of the reasons why you may be targeted:
Unless decisive action is taken quickly, they will disappear into the abyss, leaving you to deal with bad reviews, or worse.
Generally speaking, if you do not have a trademark, you do not have standing to file a UDPR (successfully).
In other words, your recourse is more than limited.
However, if you DO have a trademark, and you’re able to establish a likelihood of confusion between the fake domain name and your trademark, as well as the fact that the scammer’s domain name is being used in bad faith, you can actually have the fake domain name transferred to you, so you can shut it down and prevent further fraudulent use.
In other words, if you do not have a trademark, you’re a sitting duck. You are hanging on to the hope that a. your lawyer can pull a rabbit out of his or her hat, or b. that the scammer is located in the US (again, they’re probably not) so that you can file a DMCA, or c. your complaint doesn’t get lost in the Google abyss.
If you’ve been waiting to trademark your business, please heed this warning: cases of online fraud and scamming are on the rise, and again, if you do not have a trademark, you are hamstringing your best opportunity to shut down scammers. Being forearmed means being forewarned. Contact our offices today to discuss whether trademarking is an appropriate next step for your business.