Return Fraud for Counterfeit Processors

The American chip manufacturer Intel reports a massive increase in counterfeit Intel CPUs (Central Processing Unit) for the Chinese market. The fakes are sold via e-commerce platforms such as AliExpress or Amazon, and third-party dealers try to smuggle large quantities of fake CPUs into the market by returning (Return Merchandise Authorization, RMA) allegedly original products. In such return fraud cases, counterfeiters return counterfeit CPUs to the original manufacturer through the vendors’ authorized return merchandise authorization programs and keep the original product.

RMA fraud is not uncommon in China. According to the Chinese Consumer Rights and Interests Protection Law, buyers have the right to return products purchased online within seven days without giving reasons. RMA fraudsters take advantage of this consumer-friendly policy. Example Apple: Fraudsters ordered the iPhone from Apple, removed the original motherboard and replaced it with a counterfeit. They then return the modified iPhone, often in exchange for another original product. They sell the removed original components on the second-hand market.

We expect that brand and product piracy of chips will continue to increase due to the US sanctions against China. China cannot manufacture many processors for mobile phones and computers itself and is therefore heavily dependent on imports – from American chip manufacturers or from foreign companies that use American chip manufacturing technology. Continuing and likely increasing US sanctions are cutting supply chains and reducing supply in China, which will further fuel counterfeiting and piracy. Chip manufacturers are well advised to identify their counterfeiter networks, which often operate internationally, and to take legal action to combat them.

Source: HKEPC /  Picture:

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