Microsoft's investigators have caught 25 UK computer shops selling illegal software in the past six months.
The software company has reached settlements with 21 sellers, who admitted loading pirated software onto the hard discs of computers sold.
Whistleblowers also enabled investigators to identify four UK traders using the eBay online auction site to sell software illegally.
Customers believed they were getting discounts, but the computer shops were making huge profits on copies of genuine software or software downloaded from the internet.
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Many people are unaware that they are not being sold the genuine product, said Michala Wardell, head of anti-piracy at Microsoft UK.
The hotspots include London, Huddersfield, Warrington, Manchester and Bristol, which suggests the illegitimate trade is driven by demand from student populations, she said.
Most of those caught in the operation either claimed the illegal activities were carried out by rogue employees or that they were not aware that what they were doing was illegal, said Wardell.
However, most of them admitted the wrongdoing and have agreed to work with Microsoft on how best to source and sell software.
"We attempt to deal with most offenders ourselves, but where sellers persist in illegal activities, we call in UK trading standards officers," said Wardell.
Trading standards officers are empowered to conduct raids, launch criminal investigations and lay charges where they find the consumer has been harmed by illegal trade practices.
"At a time when UK resellers are looking to expand their business post-recession, piracy not only impedes growth, but puts local hard-working computer shops out of business," said Wardell.
After a Microsoft investigation, the following sellers admitted to selling software illegally
|Computer Services Repair||Birmingham|
|Discount Computer Warehouse||Birmingham|
|March Computers High Tech Trading||Kent|
|South Liverpool PC Repair||Leeds|
|Microsoft investigators found these sellers providing
illegal software on eBay:
|Little Laptop shop eBay (also known as Recovery DVDs)|
|Fizz Time (aka Electricbuy)|
|Custome PC Shop|