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U.S.: Attempts to buy counterfeit chips amid component shortages lead to increased fraud activity

U.S.: Attempts to buy counterfeit chips amid component shortages lead to increased fraud activity

According to ERAI Inc, an American company that tracks counterfeit chip shipments and industry fraud, the semiconductor shortage has led to a record number of fraudulent transfers of funds to sham contractors by U.S.
customers.Image source: Brian Kostiuk/unsplash.
ERAI reports that in 2021 there were 101 reported incidents of wire transfer fraud, compared to 70 incidents in 2020 and just 17 five years ago.According to ERAI President Mark Snider, companies are desperate to find chips not available from authorized and trusted distributors, so they turn to so-called \"shady brokers\" who they transfer money to, often without receiving any products in return.
It is alleged that all reported fraud cases involve Chinese brokers, reports to ERAI are made on a voluntary basis.Although there is a counterfeit parts database GIDEP and the Government-Industry Data Exchange Program in the United States, anonymous appeals to government agencies are not allowed, so the ERAI database has become the main for companies wishing to learn more about problems with counterfeit purchases or report on problems that have already occurred.The latest data show the number of incidents with counterfeit chips, information about which is not available to the public.
That's much lower than the 963 incidents reported in 2019.
Snyder said it is possible that quarantine measures related to the pandemic have made it more difficult for counterfeit suppliers to do business in such an environment.
The findings were made public at the Center for Advanced Life Cycle Engineering's Symposium on Counterfeit Parts and Materials, organized by the University of Maryland (USA) and industry group SMTA.
According to experts, the actual number of incidents may be much higher, because many companies are afraid of reputational damage and prefer not to report attempts to purchase counterfeit chips at all.

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