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Whether shoppers are looking for electronics, experiences, clothing, or toys, they’ll be searching for the best deals. And while it’s tough to turn away from low prices, shoppers must remain vigilant. Whatever you’re shopping for, you can almost guarantee there is a counterfeit version on the market, and counterfeit goods pose a serious threat to consumers and businesses alike.
Counterfeit products can pose a serious threat to consumers’ health and safety.
Counterfeiters are obviously not regulated and do not comply with laws or safety standards. That means, counterfeit, fake, substandard products are sold without any care or emphasis on quality or safety. Thus, fake toys are constructed with defective parts that can break off and cause choking hazards or toxic paint that may create severe consequences for children. Imitation electronics, such as chargers and accessories, made with cheap components can catch on fire and even explode. Counterfeit clothing often fails fire resistance standards, and fastenings, dyes, and other materials used in the production process may reek of chemicals and metals. Counterfeit cosmetics may contain high levels of mercury, arsenic, and even traces of urine and feces, all of which can cause severe allergic reactions and possible long-term harm to your skin, eyes, and hair. Counterfeit medicines may contain dangerously high amounts of active ingredient or worse, no active ingredient at all.
And these are just a few examples. Counterfeits are no longer limited to designer bags and shoes, especially as the convenience of online shopping becomes more popular. Criminals that make and sell fake products are highly sophisticated because of the low cost of entry to the counterfeit trade and the high rate of return. These cunning criminals prey on unsuspecting consumers.
Many counterfeiters operate websites that are nearly indistinguishable from websites selling legal goods. These websites deliver shoddy, sometimes dangerous counterfeit products. The hazards of counterfeit goods cannot be understated. See our piece here for more information. But when it comes to purchasing counterfeit goods online, consumers may be at risk from the first mouse click. Counterfeiters use their websites and various platforms to install vicious malware that launches these phishing attacks.
When it comes to your health and safety, you can’t overestimate the damaging weight counterfeits can carry.
Counterfeiting funnels money into organizations involved in criminal activity around the world. It’s not a victimless crime – exploited and child laborers and even terrorist networks lurk just beyond our sights and screens.
Globally, the scope of physical counterfeiting is the largest it has ever been—measured at $509 billion dollars by the Organization for Economic Cooperation and Development in its 2019 report, Trends in Trade in Counterfeit and Pirated Goods. Similarly, in a June 2019 report, Impacts of Digital Piracy on the U.S. Economy, the Chamber found that global online piracy costs the U.S. economy at least $29.2 billion in lost revenue each year. This growing scourge is a direct threat to all U.S. business, and especially the intellectual property (IP) intensive industries that serve as key engines of job creation, competitiveness, and economic growth for the United States.
Moreover, counterfeiters avoid paying taxes, so governments lose valuable tax revenue that could be used to develop important initiatives, like public health and education. It’s clear that counterfeit escapes regulatory certifications, taxes and duties, and other relevant legal checkpoints. But counterfeit also finances crimes of a much larger scale.
Counterfeiting funds international illicit trade and organized crime. Terrorist networks and crime rings use the profitable counterfeit industry to sponsor their organizations’ activity, from drug smuggling and weapons trafficking to military operations and member recruitment.
The counterfeit trade also perpetuates the systematic exploitation of labor. Those who are employed to produce counterfeit goods are low paid and vulnerable, exposed to egregious violations of labor laws and basic human rights. Illicit factories trafficking in counterfeit products infringe upon child labor laws.
According to the International Labor Organization, the majority of the 246 million child laborers work in the “informal” economy, the economy hidden from government and other authoritative supervision, which includes counterfeit.
Counterfeiting is certainly not a victimless crime, affecting people and communities in the U.S. and around the world.
Report unsafe products to the Consumer Product Safety Commission by calling 800-638-2772 or by visiting their website, https://www.saferproducts.gov/.
Many counterfeit and pirated goods are the product of complex illegal manufacturing and distributing operations. If you suspect an intellectual property crime, report it to the National Intellectual Property Rights Coordination Center at https://www.iprcenter.gov/referral/view or to local law enforcement.
Consumers can play an important role in keeping the market free of fakes by acting as a smart consumer. If you receive spam that directs you to a suspicious website, report the information to the brand owner and to the authorities. If you suspect you’ve purchased a counterfeit or pirated product, use the report IP theft button from the National IPR Center and the Stop Fakes initiative as part of the U.S. government.