Kyle Burgess, Consumers’ Research executive director, discusses the economic and health risks posed by counterfeit products, in this interview with Shirley Rooker on her radio show Of Consuming Interest, hosted on Federal News Radio.
Fake or counterfeit products are a big problem, even more so during the holiday season when so many people are buying gifts for their friends and family. On December 11, 2017, the Global Innovation Policy Center at the U.S. Chamber of Commerce held a briefing on Capitol Hill titled, “Counterfeits and Consumer Safety during the Holiday Shopping Season.” This event focused on the negative consequences of counterfeit products, and how consumers can avoid falling for fake products, and featured panelists from a number of law enforcement groups and industry associations.
The moderator of the talk, Brian Winterfeldt of the Winterfeldt IP Group, asked all the panelists to give their tips to consumers for how they can avoid counterfeit products and buy safe products. The main points the panelists made were:
The panelists also offered their thoughts on the issue of counterfeiting and intellectual property (IP) protections, and took questions. John Leonard, the Executive Director of Trade Policy and Programs for U.S. Customs and Border Protection, cited the 31,560 IP seizures that CBP made in 2016 as evidence of the scale of the problem.
Leonard said that the public “doesn’t understand” the seriousness or scale of IP violations. He said that it’s not just an issue of profit loss for companies, but also a health and safety issue. Fake auto parts, medications, and other products can be dangerous as well as misleading. For example, two individuals in New Mexico were caught in May 2017 selling fake airbags. This is an example of a fake product that can be potentially life or death. Leonard said that public awareness will “go a long way” towards changing the conversation around counterfeit items and to helping drive them out of the marketplace.
William Ross, the Deputy Director of the National Intellectual Property Rights Coordination Center, noted that while a small amount of fake products are made in the U.S. the vast majority are manufactured overseas and then shipped over here. Ross said that no consumer will willingly buy counterfeit medicine, airbags, electronics, or other products that could harm them.
Ross also cited an Immigration and Customs Enforcement (ICE) report released on Cyber Monday that reported on the seizure of thousands of copyright-infringing websites and sites selling dangerous counterfeit products.
Rebecca Mond, Senior Director of Federal Government Relations for the Toy Industry Association, noted that toys sold in the U.S. must go through extensive safety tests. However, toys that are infringing on IP rules can be unsafe, particularly if they are shipped directly from overseas. Mond said that e-commerce has made it more difficult to enforce IP protections and guard against counterfeit products, a point echoed by all the panelists.
Mond stated that consumer education, awareness, and strong IP protections are very important in combating counterfeit and unsafe toys.
The final panelist was Christina Mitropolous, Government Relations Representative for the American Apparel and Footwear Association. Mitropolous noted that social media is a growing target for counterfeiters and scammers. For example, scammers hacked Facebook accounts and used the accounts to send ads for fake, very cheap Ray-Ban sunglasses to users’ friends’ lists.
Mitropolous said that the industry is seeing increased use of encrypted messaging apps like WhatsApp. She said that if you have to contact a seller on WhatsApp to buy something, it is almost certainly fake. She gave an example of a fake clothing product that can be dangerous: Canada Goose jackets. Real down feathers are sometimes substituted with substances that are infected with bacteria, mold, or mildew, and this can cause health problems. Dog or raccoon can be used in substitute of Canada Goose’s coyote fur. Fake Canada Goose jackets can be harmful to consumers who rely on their warmth in very cold climates.
Finally, Mitropolous touched on the trend of “parasite brands.” These are knockoffs that feed off of well-known companies. They use similar names or branding to trick unsuspecting consumers, often overseas. American consumers usually don’t see these brands, but they are very prevalent in China and prey on consumers who want the trendiest brands but may not be able to recognize fake versions of those brands. New Balance shoes are a prevalent example of this issue.