Watch out for Prime Theft
As consumers flock to online markets to take advantage of seasonal deals they should remember, just like in brick and mortar stores, a really good deal may be too good to be true. Criminals have crept into online marketplaces polluting them with fraudulent and harmful products.
Online markets offer legitimate businesses the opportunity to engage with consumers all around the world regardless of the physical capacity limits of their brick and mortar stores.
It also offers significant benefits for fraudsters that use online markets to sell fake goods. Sometimes they can simply be of low quality, but other times they can threaten personal safety and health. The U.S. Customs and Border Protection had seized 3,487 items considered to have health and safety counterfeit concerns. 14 percent of those were pharmaceuticals. Counterfeit bike helmets and car seats were also seized.
Intellectual property theft is on the rise. Counterfeit and pirated goods accounted for about 3.3 percent of world trade in 2016, according to a joint OECD-EUIPO report. These numbers have only been increasing during the pandemic. E-commerce sales rose from 571.2 billion dollars in 2019 to 815.4 billion dollars in 2020.
Illicit trade also accelerated. The Tholos Foundation found that after alcohol and tobacco bans, as part of COVID-19 quarantine measures, the previously legitimate products found their way into illicit markets. Issues with illicit trade did not stop at just those goods, it created a new markets for counterfeit vaccines, personal protective equipment, even vaccine passports. The World Customs Organization, Interpol, and the Department for Homeland Security took initiative in dealing with this problem in many ways. One of which was starting ‘Operation Stolen Promise’which aims to stop harmful products from entering the American market.
Fake goods harm the reputation of the inventor and legitimate business that markets the original item. Consequences brands face when they are victims of such intellectual property theft include erosion of hard-won trust built throughout supply chains and financial costs of protecting their brand in court. Counterfeiters cause serious damage to small businesses that cannot be quickly fixed.
The private sector and governments have taken steps to enforce global trade rules and hinder prevalence of online fakes. Some companies now require a QR code in order to make sure that the product received is in fact the company’s product and not a fake. Some also use tracking devices and other technologies to record a digital footprint of where an item is and keep it safe.
The U.S Customs and Border Patrol seized a total of 26,503 items in 2020, most from China and Hong Kong. This accounted for 1.3 million dollars of manufacturer’s suggested retail price. The United States are not the only nation that is active in attempting to stop the counterfeit goods problem. It is joined by efforts around the world.
In São Paulo when factory operators were caught counterfeiting, authorities seized 2.5 million dollars’ worth of goods and the men were sentenced to 4-and-a-half-years in prison. The Intellectual Property Office of the Philippines (IPOPHL) has also been taking steps to stop IP theft. They have built public awareness and, increased customs and enforcement authorities.
The economic loss due to counterfeit products impacts all levels of a transaction, from the consumer to the company, to the nation being affected by loss in global markets. The best way to combat the counterfeiting problem is to make sure you as the consumer understands who you are buying from. Checking the third-party vendors legitimacy is the best thing you can do in order to prevent being scammed. Other steps that can be taken to combat counterfeits are to look at prices and know when something is so cheap that it is too good to be true.
Photo Credit: Andrea Piacquadio