Microsoft is warning the channel to be on the lookout for counterfeit software in the run-up to Christmas.
The company claims that the piracy rate of software used by SMEs in the UK is between 60 and 80 per cent, and the year-end is the most popular time for businesses to upgrade their systems.
"Not only does using this software put businesses at risk prosecution-wise," said Julia Philpot, anti-piracy manager at Microsoft, "but it also runs the risk of containing viruses.
"We are warning resellers to watch out for online auction sites in particular, because they often offer bulk copies of cut-price software, and there is no way of knowing if they are genuine."
Many re-sellers are duped into believing the software is from bankrupt stock or grey imports.
"One customer recently bought 300 copies of Windows 98 from a reseller, only to discover that they were all counterfeit. Now that reseller is facing prosecution," Philpot said.
"I would advise resellers to be very cautious when buying software, and only to buy from recommended distributors and Microsoft sources.
"It is up to the channel to warn their customers of the dangers of using counterfeit software, and make them realise that they could face prosecution if caught. Microsoft takes this issue very seriously."
Mike Newton, campaign relations manager at the Business Software Alliance, also warned resellers to be extra vigilant.
"Sites offering cheap software are always risky, and anyone buying from these sites should ensure the software comes with the proper licences," he said.
"Those that sell this software are taking revenue away from legitimate resellers and damaging the industry as a whole," Newton said.
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