As the various fashion weeks showcasing the world’s top designer’s approaches in cities around the world, the number of counterfeit goods has come into focus as London’s Police Intellectual Property Crime Unit (PIPCU) announces it has suspended more than 2,000 domain names linked to websites selling fake luxury goods since the New Year.
The sites disrupted by the City of London Police unit were selling well-known high end goods including fashion brands Burberry, Longchamp, Abercrombie and Oakley and jewelry designers Tiffany & Co and Thomas Sabo. However, the items being sold were far from the desired brands that were advertised and were in fact just cheap and inferior counterfeits.
In other operations, Europol announced in mid-December they had seized 292 domain names involved in the sale of counterfeit goods online in a global operation with 24 other law enforcement bodies across 18 countries including the US government’s Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
And a day later the ICE announced they had seized 100 times as many domains in a related operation. The ICE announced 29,684 domain names were seized as part of Project Transatlantic/Operation In-Our-Sites V.
The cost to industry from counterfeit goods is big. The International Chamber of Commerce describes counterfeiting as, “One of the fastest growing economic crimes of modern times. It presents companies, governments and individuals with a unique set of problems. What was once a cottage industry has now become a highly sophisticated network of organized crime that has the capacity to threaten the very fabric of national economies, endanger safety and frequently kills. It devalues corporate reputations, hinders investment, funds terrorism, and costs hundreds of thousands of people their livelihood every year.”
Counterfeit goods the ICC believes accounts for five to seven percent of world trade, worth an estimated $650 billion a year in 2008. Looking forward to 2015, ICC research estimates the global value of counterfeit and pirated could be up to $1.77 trillion.
During the fashion weeks - kicking off this month with London Fashion Week which showcased 50 catwalk shows over five days - new designs were exhibited by some of the world’s top fashion labels. These designs will quickly influence designers around the world. But they will also be copied, both label and design, illegally and sold through online marketplaces, rogue or independent websites, unauthorized profiles on social media sites and unauthorized mobile app marketplaces.
Research focusing on the fashion industry from NetNames has found 70 percent of luxury brand owners consider loss of revenue as the biggest challenge facing them online. Cybersquatting alone costs trademark holders more than $1 million (approximately £640,000) per brand, every year. This loss of revenue is driven by the distribution of counterfeit goods in the consumer and business focused marketplaces and due to the proliferation of independent or rogue websites.
But why do people buy fake goods? The reasons are varied. In another piece of research from online second-hand luxury goods retailer Vestiaire Collective published in the Huffington Post, financial pressures led to more than one in five (22%) British shoppers knowingly buying fake fashion goods while one in three (34%) said they knew for sure they have never purchased fake fashion.
The most popular counterfeit fashion items purchased were mock ‘designer’ handbags were the most sought after, with 31 percent admitting they bought counterfeit items while one in four (24%) had purchased sunglasses and watches.
The reasons people buy counterfeit fashion items are varied. The research found one in five (20%) cited the price of the designer item as the main reason for not purchasing the real thing while 17 percent claiming they thought they were buying a genuine item. And younger people were more likely to purchase fake items.
PIPCU also warns of the dangers of counterfeit goods. Consumers need to be aware of the risks of buying fake goods online. Counterfeits are often bad quality and can be potentially dangerous. The websites themselves can also be unsafe; they more often than not contain harmful viruses and malware and your personal information is also at risk of being compromised.
“The general rule is if it looks too good to be true then it probably is; heavily discounted products are often a tell-tale sign that something isn’t right,” Detective Chief Inspector Danny Medleycott and Head of PIPCU said.
“When shopping online you need to be extremely vigilant that you are not misled into buying fakes. Many sites claim to be selling genuine items, but in fact they are just cheap imitations. In some cases, such as with electrical items, these products can be extremely dangerous as they aren’t subjected to the vigorous safety checks that legit items are.
“The criminals behind these websites will often take advantage of your personal details, such as financial information and so people may find their card has been compromised and used for other fraudulent scams. The sites themselves can also be harmful, as they contain malware and viruses that can infect your computer.”
PIPCU even gives their list of top tips to avoid becoming a victim of counterfeit fraud. These are:
- Trust your instincts – if an offer looks too good to be true, then it probably is. Legitimate designer items are rarely discounted, so do not rush and be fooled into believing you are getting a good deal.
- Check the spelling and grammar on the website and of the URL – often the people behind these sites do not pay a lot of attention or care to this detail. Fraudsters may also try to deceive you by slightly changing the spelling of a well-known brand or shop in the website address.
- Look to see where the trader is based and whether they provide a postal address – just because the web address has ‘uk’ do not assume the seller is based in the UK. If there is no address supplied or there is just a PO Box or email, be wary.
- Only deal with reputable sellers – only use sites you know or ones that have been recommended to you. If you have not bought from the seller before, do your research and check online reviews. People will often turn to forums and blogs to warn others of fake sites. If you are buying an item online you can check to see if the website is a legitimate stockist by visiting www.brand-i.org.
- Ensure the website address begins ‘https’ at the payment stage – this indicates a secure payment.
- Keep security software and firewalls up-to-date. Regularly update your internet browser when a new patch-security update is released.
- Don’t access links in unsolicited emails, always type in the website address or use a search engine to find a site.
- Ask the trader if there is a returns policy or guarantee. Most rogue traders will not offer this.
- If you are not sure whether the items are genuine, do not enter your payment details – it is not worth the risk.
- Watch out for pop-ups appearing asking you to confirm your card details before you are on the payment stage. Never enter your PIN number online.