Pirated goods, knock off, counterfeits – fake products are dangerous, whatever term we use to describe them. Violations against Intellectual Property are increasing and with every bogus product that hits the market, the risk of damage to people and to enterprise grows.
Consumer electronics are heavily affected by trade in fake products. Counterfeiting of iPhones is rampant in China, such that police in Beijing last year shut down a counterfeit manufacturing operation and seized more than 40,000 fake iPhones valued at more than £13 million.
Other cases include memory chips manufactured in India, software purporting to be from Microsoft – but later proven fake – being sold in Russia and knock-off HP printer cartridges emanating from Dubai.
While fake consumer electronics products usually grab the headlines, the phenomenon affects the entire tech sector as well as many other industries. According to a situation report recently prepared by Europol and OHIM (Office for Harmonisation in the Internal Market), customs statistics clearly indicate that the majority of counterfeits are being sourced from outside the EU.
China is a major source despite ongoing attempts to tackle its counterfeit production, but problems also exist in other Asian countries that specialise in certain categories.
Counterfeiting is difficult to police and control, and despite the harm it causes, it remains attractive to organised crime because of the money it generates. A study commissioned by the International Chamber of Commerce and carried out in 2010, showed that €10 billion and more than 185,000 jobs were lost in the EU due to piracy alone.
In the UK in 2013/14 HM Revenue & Customs collected over £34 billion in customs duties and border officials detained 21,494 consignments of IPR-infringing goods at the UK border.
Combating this crime is a priority whilst it continues to have a dangerous impact on businesses and consumers. Electrical Safety First (ESF) estimates that over one million people in the UK have bought a counterfeit product in the last year.
Many are taken in by convincing stock images online, slightly discounted pricing set just below RRP and when they receive the product, safety symbols that appear to be genuine.
In the technology sector consumers are at risk from counterfeit mobile phones and tablets and fake and often dangerous chargers and batteries for numerous smart devices and laptop computers.
As with so many products, the key giveaways are the price being too low, the goods being available before they have been officially launched, the look and feel of the product and the lack of a genuine manufacturer's product code and warranty.
ESF advises consumers who have bought a counterfeit item to contact the supplier immediately asking for an explanation, and if this is not forthcoming to contact the retailer managing the marketplace, e.g. Amazon, to intervene.
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Counterfeit batteries and chargers are particularly dangerous because they may contain faulty parts that can overheat, catch fire, or even deliver an electric shock. If the retailer is unable to help, ESF suggests trying the Citizens Advice consumer helpline.
While there are health and safety risks to consumers there are other issues for manufacturers and retailers to deal with. Counterfeit products can reduce demand for genuine goods which lowers revenues, but in order to protect their brand reputation, companies often have to get involved in product recalls, investigations and legal action which is costly in terms of both time and money.
If a company’s products have been faked, it might be advisable to consider a recall in order to take control of the situation. This will allow the company to protect its brand and the safety of its valued customers.
It’s worth bearing in mind that a good recall experience will enhance customer loyalty, particularly if they understand that the company is working with their best interests at heart.
Sourced from Farzad Henareh, European Vice President, Stericycle ExpertSolutions