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Published: Thursday, 2/26/2009

Hot products fuel market for stolen goods on Internet


SAN FRANCISCO - Consumer demand for hot new products at huge discounts is fueling organized retail crime, with goods stolen from retailers finding an audience in secondary markets like the Web, a retail trade group said.

High on the list are the latest video games or trendiest new handbags that can be easily resold, the National Retail Federation said.

"The demand for product at a reduced price is significantly up. Consumers are looking at alternative resources to find products," said Joe LaRocca, the group's vice president of loss prevention.

"Unfortunately, consumers and the economy are fueling a drive for this illegal or anonymous commerce that is taking place across the country."

Black markets for stolen goods can be deceptively bright: flea markets, swap meets, and corner markets teeming with bargain hunters, as well as online auction sites like eBay Inc. and classified sites like craigslist.com, Mr. LaRocca said.

Three federal anti-retail crime bills are expected to be introduced in Congress, designed to give law enforcement more authority to fight organized retail theft, including online, the NRF said.

EBay's deputy general counsel, Tod Cohen, said in a statement that the company has been working cooperatively with other companies and law enforcement in order to fight the online sale of stolen goods.

He called discriminatory the legislation soon to be introduced in Congress.

"These bills are less about fight-ing shoplifting and more about big-box retailers wanting to crush legitimate small-business online competition that delivers real value and greater choice to consumers," Mr. Cohen said.

Craigslist called misuse of its site for illegal purposes "absolutely unacceptable" and cited its work with law enforcement to combat it.

About 85 percent of the retailers that were surveyed by the retail federation last year said they had been victims of organized retail crime. Moreover, respondents estimated that nearly 40 percent of goods sold on auction Web sites advertised as "new in box" were stolen or fraudulently obtained.

Those trends have picked up as the economy has worsened, Mr. LaRocca said. "These cases are not little Johnny walking in and stealing a pack of bubblegum," he said.

The FBI has estimated that U.S retailers lose $15 billion to $30 billion each year from organized retail crime.

To combat the escalating crime, retailers have been using global positioning systems (GPS) to track cartons and suspect vehicles. They are also hiring staff from law enforcement, sharing intelligence information, and putting their investigators through specialized training, the retail group said.

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