Counterfeiting and Consumer Contradictions

ABSTRACT - Fashion counterfeiting is a multimillion pound business and one which relies on the complicity of the consumer. Frequently seen as a victimless crime, it is a difficult trade to control because as long as consumers desire brands, the greater the market for counterfeits. In this study we consider the way in which consumers relate to fake brands and the implications of counterfeit for consumers creating their identity through commodities. The results point to an inherent and fundamental contradiction in consumers views on counterfeit, willing to buy and wear the fakes but condemning the duplicity of those who do.

Product counterfeiting puts consumer safety at risk

Counterfeiters cashing in on consumer goods go beyond fake Fendi purses and Rolex watches to make their money. Today's counterfeiters are ripping off everything from electronics to pharmaceuticals to toothpaste.

Product counterfeiting is a thriving multi-billion dollar global industry. It is highly profitable and the risks of significant legal consequences are low. The profits of product counterfeiting have been shown to fund other organized criminal activities.

For consumers, it means increased health and safety risks, purchasing inferior products, and job loss. In the United States alone, it is estimated that the crime of counterfeiting has caused the loss of more than 750,000 jobs.

"As a world leader in product safety testing, UL understands its responsibility to take counterfeiters to task," said John Drengenberg, consumer affairs director for UL, a global safety organization. "About 20 billion UL Marks appear on products entering the marketplace each year. Based on our experience, only a small fraction are potentially counterfeit. But even one counterfeit UL Mark is too many given the consumer safety risk."

Impact of counterfeiting

"Counterfeiters will copy and sell anything that turns a profit without regard to quality, safety or the law," said Brian Monks, vice president of UL's Anti-Counterfeiting Operations.  "They're criminals, and everyone feels the pinch - consumers, manufacturers, retailers, communities and entire economies."

For consumers, the biggest threat is personal safety. Products are rigorously tested according to strict UL requirements, being evaluated for potential risk of fire, shock, and/or personal injury. Products are not certified until they meet established standards. Because products bearing counterfeit certification marks have not undergone a testing and certification process, they can present potential safety hazards to the end-user.

For retailers, the sale and distribution of counterfeit products has legal risks, regardless of whether sold with intent or without any knowledge. If a consumer suffers an injury, the retailer may be the only traceable company associated with the distribution of the counterfeit product, exposing them to potential legal liability. Additionally, retailers can incur additional expenses by paying for inferior products, and then complying with warranty claims or recalls.

Legitimate manufacturers that invest in the quality of their products can lose more than sales if their products are counterfeited; their brands' image and reputation also suffer. Additionally, these manufacturers incur costs to protect and enforce their intellectual property rights.

"Our efforts focus on thwarting the growing global threat of product counterfeiting to the U.S. economy, the global business community and consumers," said Monks.

What UL and industry leaders are doing

As part of its century-long public safety mission, UL, with its partners, is dedicated to combating counterfeit products and the criminals who manufacturer them. UL takes a zero-tolerance approach and works with law enforcement around the world to prevent products bearing a counterfeit UL Mark from entering the stream of commerce. The UL policy against counterfeiters and counterfeit goods does not tolerate the import, export or manipulation of seized merchandise bearing a counterfeit UL Mark.

"The goal of the zero-tolerance policy is three-fold," said Monks. "First and foremost, our priority is consumer safety. Secondly, we are committed to protecting the integrity of UL's Registered Marks, and finally to supporting legitimate, responsible manufacturers that have invested the time and resources to meet recognized safety standards."

UL actively works with Customs and Border Protection (CBP) to prevent counterfeit products from entering the U.S. market. Since 1995, there have been more than 1,500 CBP seizures of counterfeit products at entry ports in the U.S.

In addition to CBP and Immigration and Customs Enforcement (ICE), UL works with a number of international crime prevention organizations and industry associations including INTERPOL, the Royal Canadian Mounted Police (RCMP), the FBI, the National Electrical Manufacturers Association (NEMA), the Canadian Anti-Counterfeiting Coalition (CACN), the International Trademark Association (INTA), and the International Anti-Counterfeiting Coalition (IACC).

UL is working in partnership with INTERPOL and the RCMP to host the 2008 International Law Enforcement IP Crime Conference, which will bring together an unprecedented consortium of law enforcement and intellectual property crime experts to discuss the threat of increased counterfeiting, share best practices and develop new strategies and partnerships to more effectively combat IP crime.

In a separate effort with the RCMP and the Canadian Anti-Counterfeiting Network, UL recently participated in the CACN Canadian Reality Tour, a cross-Canada educational initiative to raise awareness and combat product counterfeiting and copyright piracy.

UL is constantly working to stay ahead of counterfeiters and as part of that commitment, is introducing a new holographic label that will be required in 32 common consumer product areas prone to counterfeiting, including power supply cords, nightlights and ceiling fans.

The holographic label minimizes counterfeit UL Marks because it incorporates cutting-edge technology, elevated security features and a unique hologram design, making it easy to identify and validate, yet incredibly difficult to replicate. Distinct features of the new hologram label include:

·         Gold background to help U.S. Customs, law enforcement agencies, distributors, retailers and consumers quickly identify the new label.

·         Repeating pattern of floating UL symbols, a burst pattern around one of the floating UL symbols, detailed micro-printing and wavy lines.

·         Color shifting ink similar to that in the new U.S. paper currency.

·         Additional covert security features to assist with the authentication of a UL holographic label.

Additionally, UL has added another level of security via the UL Authenticator, a special credit card-size device that authorities can use to better identify counterfeit products.

The new holographic label will be available for manufacturers beginning in the summer of 2008.

"Counterfeiting has become the crime of the 21st century," added Monks. "Fighting these criminals has, and will continue to be, a priority for UL and our many partners around the world."

What consumers can do

Consumers should thoroughly examine every new product prior to use and pay particular attention to products packaged in boxes that don't display the following:

·         Brand

·         Product name

·         Certification label

·         The product

Drengenberg encourages consumers to look for a reputable certification mark on the box and product to decrease odds of buying counterfeit products. When purchasing products with the UL Mark, consumers should look for:

·         The name and/or UL certification mark (UL in a circle)

·         The word "LISTED" in capital letters

·         A control number or issue number

·         A product identity

·         Click here to learn more.

Finally, consumers should keep in mind that products bearing a counterfeit UL Mark are typically high-volume, low-cost items, such as extension cords and power strips, and are generally sold through discount retailers and unconventional outlets like flea markets and lesser known online retailers.

If you suspect a product may have a counterfeit UL Mark, contact UL immediately by e-mailing anticounterfeiting@us.ul.com or calling +1-877-UL-HELPS (1-877-854-3577). For general information about counterfeiting and global anti-counterfeiting efforts, and for additional tips on how to identify a counterfeit label, visit our anti-counterfeiting operations section.