We show that an interaction between dark matter and dark energy generically results in an effective dark energy equation of state of w < -1 . This arises because the interaction alters the redshift-dependence of the matter density . An observer who fits the data treating the dark matter as non-interacting will infer an effective dark energy fluid with w < -1 . We argue that the model is consistent with all current observations , the tightest constraint coming from estimates of the matter density at different redshifts . Comparing the luminosity and angular-diameter distance relations with \Lambda CDM and phantom models , we find that the three models are degenerate within current uncertainties but likely distinguishable by the next generation of dark energy experiments .