Remember Xu Ting, the Chinese woman who, along with her family members, was sued for counterfeiting millions of dollars worth of luxury products? The story of this successful con that ripped off big brands like Gucci, Balenciaga, and Yves Saint Laurent might amuse some readers. However, not many of us know that counterfeit goods cost the U.S economy losses that range from $225 billion to $600 billion every year.
A recent survey sponsored by Bayer revealed that 66% of Americans are seriously concerned that about 29% of products manufactured and sold in the United States are fake. In fact, the majority of the participants believe the issue is worse now than it was three years ago.
From fake designer perfumes to bogus medication, the counterfeiting business is one of the largest underground industries — and it is thriving.
The Real Dangers of Fake Goods
When Americans think of counterfeit goods, they think of unrealistic scenarios that affect only the fashion or art industry. However, most people don’t realize that counterfeit goods have also snuck their way into pharmaceutical, automotive, aerospace, and electronics industries. Although the risks posed by sham products aren’t always apparent to consumers, they can have grave health and safety consequences.
When it comes to buying electronic goods, many Americans are more concerned with paying the lowest price while ignoring the harmful effects fake products can have on their safety. Counterfeit iPhone chargers and poorly made batteries have resulted in explosions and electrocution, resulting in serious injuries. Fake products also affect businesses as they can hurt a business’s reputation, lose profit as well as increase its price.
Since counterfeit medications are not subject to regulatory authorities like the FDA, their consumption can result in life-threatening health risks. Around 10% of the world’s medicines are counterfeited. This includes high-end lifestyle drugs that reduce fat or life-saving anti-carcinogenic and antibiotics. Imagine the harm it can cause to patients who consume these drugs to manage their condition and relieve pain.
Years ago, counterfeit medication could be detected via careful observation or reading the labels. Irregularity in appearance caused due to the carelessness on the part of the counterfeiters would give away the con. However, they have now become much more sophisticated and chemical analysis is the only way to find if a drug is genuine or not.
Not only do counterfeit products cause health and safety issues for humans but they also result in significant cost to the economy. The Organization for Economic Co-Operation and Development has estimated that fake products will result in the loss of up to 5.4 million jobs by 2022. Moreover, the proceeds from the fake goods are more often than not used to fund terrorist organizations and crime syndicates.
How Can Americans Be Aware of Counterfeit Products
It is getting increasingly difficult to distinguish counterfeit products from real ones as these criminals go to great lengths to make sure their product closely resembles the original. However, fighting trade of counterfeit goods is very important.
For Consumers: Consumers can watch out for ridiculously low prices that seem too good to be true — because they probably are. If buying products online, consumers should check out the designer’s website for the list of authorized dealers and buy only from them. Some other red flags include misspelled names of the brand, unusual designs, and unknown factory outlets.
For Brands and Manufacturers: Brands should make sure they have a very secure and transparent distribution network. They should have a mechanism in place for reporting counterfeit goods on their website as well as a comprehensive “cease and desist” policy to ward off counterfeiters. They should also monitor authorized retailers who sell their products as even they resort to selling counterfeit products sometimes.
People have a duty to cooperate with regulatory authorities and verify the authenticity of their purchased products. If people refuse to buy bogus products at cheaper prices, these counterfeiters will suffer losses and may even disappear with time.