Counterfeiting causes economic damages to businesses and physically harms consumers

[Rachel, 8/2/2022, Forbes, “The Impact Of Fakes And How To Combat Them”, https://www.forbes.com/sites/forbesbusinesscouncil/2022/02/08/the-impact-of-fakes-and-how-to-combat-them/, accessed 7/8/2024, LR]

In the last decade, counterfeits have become a major problem for businesses across the world, with recent figures revealing that trade-in fake goods now accounts for 2.5% of world trade every year, the equivalent of $464 billion.

Counterfeits are fakes, or unauthorized replicas, of a genuine product. They are most frequently produced to bank on the success of an authentic product, tricking users into purchasing something they erroneously think is original.

The Internet: A Counterfeiter's Playground

Traditionally, counterfeiters have focused on luxury brands and the fashion industry, making copies of clothing, handbags and accessories and selling them through pop-up physical marketplaces for much cheaper. Today, however, social media and online marketplaces have made it infinitely easier and more lucrative for fraudsters to sell illegal products while slipping under the radar of authorities. Through what look like authentic links promoted by influencers, fraudsters are duping individuals and businesses into thinking they are buying genuine products, while using complex distribution systems that make finding out where fake products originate an almost impossible task.

For many businesses, counterfeits can mean loss in revenue and damage to customer trust and reputation. However, in some cases they can actually put health and safety at risk. Take the pandemic: Over the last two years the healthcare industry has become a prime target for counterfeiters who have produced pirated face masks, personal protective equipment (PPE) and antibacterial hand gel, all of which have the potential to put people’s health at serious risk.

The beauty, toy and technology industries are also getting hit heavily and, with fraudsters bypassing safety checks, these also have the potential to cause harm, even death. Fraudsters use cheap material and toxic chemicals to build their products, which means they might have faulty electrics, catch fire more easily and/or cause serious health and safety issues. The dangers are endless.

Given the scale and potential impact of the problem, what can businesses and consumers do to protect against counterfeits?