How does counterfeiting affects consumers?

Counterfeiting or duplication is a growing menace which has an evil impact on different industries. Organisations lose millions of dollars every year due to the sale of counterfeit products. The problem of duplication has sneaked in every sector. It is estimated that by 2022, the value of counterfeit and pirated goods will be around $1.90 -$2.81 trillion as per FICCI.

Most of the times the repeated attempts of organizations to fight the counterfeits have turned futile. A large amount of money and resources are spent on fighting fakes. However, it is not just the companies which are facing the wrath of counterfeit products, consumers also bear its brunt. To say it simply, there are many impacts of duplication on the consumers.

Duplication poses a significant risk to consumers. Counterfeit goods can lead to injuries, illnesses, death as in the case of counterfeit drugs. In cases where counterfeit goods cause no physical harm, consumers are harmed financially when they are duped into spending their hard-earned cash for a poor-quality fake.

Let’s discuss the negative effects of counterfeiting on consumers.

Fake products are harmful to the health of consumers: Whether it’s a counterfeit drug, counterfeit alcohol or a fake food item all are harmful to the health of the consumers. People who consume these items generally report of food poisoning, nausea, indigestion, kidney and liver ailments.

Duplicate products lead to the monetary loss of the consumers: Besides having a negative impact on health fake products also lead to the financial loss of the consumers. Every year it’s not just the companies but consumers also lose an enormous amount of money as they are duped due to fake products.

Consumers lose trust in the product and the brand: Many a time a product or a service is beneficial for the consumer but due to the sale of counterfeits original products and companies lose their credibility. This brings down the reputation of the brands in the long run and a company is not able to win the trust of the consumer again.

Counterfeiting on the global level-An overview

Counterfeiting or duplication is a growing problem across the world. It badly affects the government, businesses, and consumers. People across the world are suffering from the menace of duplicate products which is regularly authenticated by different reports and news coming from different parts of the world.

Market experts believe that the growing globalization is the main reason behind rampant duplication. They say that in order to increase their manufacturing capacity and hire cheap labor big companies shifted their base to developing and third world countries. However, the major problem in these areas was that of lack of anti-duplication regulation and poor IP laws.

This made the way for counterfeiters and they were easily able to steal technology to manufacture duplicate goods. With the passage of time, they became more organized and took counterfeiting on a much larger scale.

According to a report by OECD (Organisation for Economic Co-operation and Development) United States, Italy, France, Switzerland, Japan, and Germany are the hardest hit countries, with the majority (83%) of fake goods originating (not surprisingly) from China and Hong Kong. European brands are among the most impacted, with an estimated 5% of all goods imported into the European Union (EU) being fake. This represents as much as $118 billion.

With the growth and penetration of internet technology counterfeits are now being sold on different internet platforms. According to the International Trademark Association, “Criminals prefer to sell counterfeits on the Internet for many reasons. They can hide behind the anonymity of the Internet with the Dark Web even their IP addresses can be hidden. The Internet gives them the reach to sell to consumers globally-outside of the national limits of law enforcement.”

The global problem of counterfeiting must be addressed on multiple fronts with collaborative efforts of the government, industry players and anti-counterfeiting solution providers.

New invisible nano ink may help in preventing counterfeiting

Duplicating and counterfeiting of goods is a growing problem across the world. Different anti-counterfeiting measures like printing barcodes or holograms can prevent counterfeiting of products.

Now nanotechnology may provide a solution to get rid of the menace of counterfeiting. The technology depends on the changes that happen in nanoparticles when subjected to certain conditions. These changes can be easily identified but the technology is difficult to copy or replicate.

Recently, researchers at the Advanced Polymer and Nanomaterial Laboratory (APNL) Tezpur University have developed a new, light emitting nanocomposite-based ink that is not visible under light but can be detected when kept under an ultra-violet light. The ink is quite useful in preventing counterfeiting on paper and plastic.

Niranjan Karak, Group Leader of APNL said, “The nanocomposite has an intricate structure to prevent imitation. By dispersing it in organic solvents like xylene, it transforms into an ink that can be used to mark a label. The liquid appears pale-yellow under visible light and glows with a cyan tint when exposed to UV light of specific length.”

The performance of the ink was tested by writing a few letters on paper and plastic. It was found that the letters were not visible in daylight, whereas when kept under UV light, it glowed with a cyan hue.

For convenience the ink can be loaded into the refill of a sketch or gel pen and has a shelf life of up to ten years and degrades in a few months only under the action of soil microbes.

Source: thehindubusinessline

The link between counterfeiting and organized crime

International law enforcement and market experts have established a close link between counterfeiting and other forms of criminal activities. It has been found that the counterfeiting business helps criminals to fuel other illegal activities and vice-versa. EUROPOL (European Union Agency for Law Enforcement Cooperation) has even warned that counterfeiting is an increasingly attractive avenue for organized crime syndicates to diversify and increase their illicit businesses.

It has also been found that counterfeiters use similar routes and modus operandi to supply counterfeit goods as they do to smuggle drugs, firearms and human trafficking. Profits from other crimes and illicit activities also help in the production and distribution of counterfeit goods. Many reports from different countries have established the fact that profits from crimes like drug trafficking and other crimes were used to promote the business of counterfeiting and, similarly proceeds from the sale of duplicate goods were used to promote the criminal’s other illicit activities.

One of the main reasons why criminals choose counterfeiting over other criminal activities is due to its favourable ratio between potential profits and possible risks. According to Executive Director, UNODC (United Nations Office on Drugs and Crime) Yuri Fedotov, “In comparison to other crimes such as drug trafficking, the production and distribution of counterfeit goods present a low-risk/high-profit opportunity for criminals. Counterfeiting feeds money laundering activities and encourages corruption. There is also evidence of some involvement or overlap with drug trafficking and other serious crimes.”

As per trade, reports counterfeiting is now placed amongst the highest income sources for organized criminal activities. Counterfeiting or duplication also helps in money laundering by providing a platform through which criminal organization can invest the proceeds of their illicit activities. In a nutshell, organized crime syndicates use counterfeiting as a medium to optimize their other criminal activities.

New policy against online fakes may lower prices of genuine products

Industry experts and online sellers have hailed the recent anti-counterfeiting measures released in the recent draft national e-commerce policy. The experts and sellers said that the government’s anti-duplication policy would help in preventing the sale of duplicate products online.

The government in its draft has proposed that the online retailers must give trademark owners the option to approve the sale of every product that carries its trademark. In the case of cosmetics and luxury products, it should seek the trademark owner’s authorisation to sell such products on their platforms.

Generally, e-commerce companies do not share the details of fake products but according to some studies, the percentage of fake products sold online is as high as 20%. An expert highlighted that the sale of counterfeits has increased the product price but the cut down in the sale of fake products will bring down the costs of original products. He added that the technology

He added that the technology needed to enable this would not be hard to build and while the removal of low-cost counterfeit options from online marketplaces might hurt sales temporarily, it would eventually recover as brands begin enjoying better economies of scale and pass on the benefits to the consumer.

According to a member of All India Online Vendors Association, “The solution proposed by the government is good, but we feel some of this power being given to brand and marketplaces could be misused. For this, we believe that an appeals process to help sellers needs to be prescribed.”

Source: Economic Times

Global counterfeiting has grown 100 times-FICCI CASCADE

FICCI CASCADE (Committee Against Smuggling and Counterfeiting Activities Destroying the Economy) has raised a serious concern on counterfeiting and smuggling. The body believes that the global economy has suffered massive financial loss due to counterfeiting and there has been an increase in its volume by 100 times.

The experts from FICCI CASCADE while speaking at a seminar highlighted the importance of increased awareness on the hazards of counterfeiting and smuggling, and the need for effective enforcement to enhance India’s economic development.

PC Jha, Advisor, FICCI CASCADE and Former Chairman, Central Board of Excise and Customs, stated that during the last twenty years, the volume of duplication has increased 100 times around the world and the size of the trade in duplicate goods is 10 percent of the legal international trade. He finally stressed on the seriousness of the problem of illicit trade.

Deep Chand, Advisor, FICCI CASCADE and Former Special Commissioner of Delhi Police emphasized on the need for consumers being continuously made aware of the detrimental impact of illicit products. He further said, “Consumer awareness campaigns that explain how to differentiate a spurious product from a genuine product to demanding a copy of the bill from the seller, along with the harmful consequences of purchasing illegal products.

As per the FICCI CASCADE report published in 2015, the total loss to the government on account of illicit markets in just seven manufacturing sectors is Rs 39,239 crores. Amongst the various sectors, the maximum revenue loss to the exchequer is attributed to tobacco products. Estimating a revenue loss of Rs 9139 crores, followed by mobile phones at Rs 6705 crores and alcoholic beverages at Rs 6309 crores.

According to a FICCI report, ‘Illicit Trade: Fuelling Terror Financing and Organized Crime’, counterfeiting is the second largest source of income for criminal activities. The global loss to employment would stand at 4.2 to 5.4 million in the year 2022.

Source: uniindia.com

spurious products

Spurious products of Eureka Forbes seized in Thane

Acting tough on counterfeiters, Eureka Forbes Limited, India’s leading health and hygiene brand with a multi-product, multi-channel organization, in association with the rural police conducted raids on an industrial unit in Asangaon of the district and seized various duplicate products.

Acting on the complaint lodged by Eureka Forbes, a police team conducted a raid at Pournima Industries, owned by Rajendra Bhoir and Kailash Bhoir, in Asangaon, sources said. The industrial unit was engaged in rolling out sub-standard water purifier cartridges of Eureka Forbes’ popular brand Aquaguard.

The products manufactured at the facility were sent to retailers and service providers in Mumbai, Thane, Vashi, Navi Mumbai and Pune. This was the second raid conducted by Eureka Forbes in the past few days, the other was in Bangalore. The company also sent legal notices to unauthorized traders using e-commerce channels to sell its products.

A first information report will be filed at the Asangaon police station against the owners of the factory for alleged cheating, forgery and violation of copyright, sources added. Meanwhile, Shashank Sinha, chief transformation officer, Eureka Forbes Limited, warned the consumers saying, “Unauthorized service networks pose a huge threat to consumers. Lured by lower prices, consumers often end up buying fake or assembled products.

“A recent case in point being an FIR against Pournima Industries for misleading our customers by letting them believe that they were getting into a contract with Eureka Forbes. This factory and many others like them were engaged in manufacturing spurious spares and consumables that would risk consumers. We strongly condemn such acts and hence have taken a precautionary step to protect our consumers by introducing ‘Health Protect’ which is a safeguard that has been built into our Aquaguard purifiers” he added.

Source: United News of India

What you should do to avoid fake products?

The first line of defence against counterfeiting is the awareness against duplicate products. It is highly important for you to get acquainted with the information which will help you in identifying fakes products to a large extent however, it is not completely possible to spot fakes. Here are some points which you must keep in mind to determine the genuineness of a product:

Look closely at the labels and packaging 

Look at the labels, packaging, printing and the text closely. If you notice any flaw in the spellings, grammar, print quality or any other discrepancies then it could be a sign of counterfeit. Also, be cautious of products that include a ‘Made in China’ unless and until the product is merchandise manufactured in China, perform a web search for it.

Go for an authorised dealer

Always go for an authorised dealer while purchasing or replacing products. This is highly important in a scenario where you are purchasing or replacing spare parts for automobiles, aeroplanes and other items.

Are there no taxes?

Always be cautious of deals which allow you to purchase without value added tax, sales tax etc. This is usually in case of counterfeits which evade huge amount of taxes every year.

Purchase from a secure e-commerce website

Try to avoid purchasing from websites that do not have https in their domain. The ‘s’ in https stands for secure which is generally used by authorised and credible websites. Legitimate retailers will always ensure that their customers buy through a secure setting and are not duped with counterfeits.

Is the deal to good to be true?

One of the biggest giveaways for consumers is that ‘a deal is too good to be true’. Seasonal discounts or factory prices are fine but if the prices are too low compared to the regular price of the product then there are high chances that the product is a counterfeit. Take a cue from this and thoroughly check the labels and tags of the product.

Look for holographic and digital authentication

Last but not least is to visually identify security holograms or digitally authenticate QR codes and bar codes printed on the product. Due to the rise of counterfeiting companies are using security holograms and QR codes on their products. Security holograms are 3D holographic devices with optical properties and show different images or features corresponding to the angle of viewing. Try to view the holograms from different angles and you will be able to notice the different colours and images in it. There are also other covert features which can only be viewed with special instruments. For QR code authentication you will require a QR code scanning mobile application which will determine the genuineness of the product.

Securing supply chains against duplication and ways to do it

People who are victims of theft, robbery, fire, flood or other disasters often complain about the powerlessness they have over the situation. The gruesome situation can create an enormous amount of financial burden and can cause irreparable loss to the individual and organisations.

But just as individuals can take necessary measures to protect their products and properties similarly organisations and company owners can take the necessary measures to secure their supply chains. Different technology tools can be used as effective solutions to secure supply chains.

One of the biggest threats faced by companies is the problem of duplication. Counterfeiting or duplication can take place at any stage of the supply chain. Since the supply chain encompasses different stages, therefore, it is difficult to individually monitor each of them. Moreover, it is manually not feasible to examine loopholes or any errors in the supply chain.

Of late, different kinds of technologies are being used to secure and monitor supply chains. Particularly IT technology in amalgamation with holographic technology is being used by companies worldwide. A good example is the use of barcode or QR code which not just digitally authenticates the products but also links it with different IT-enabled technologies like track and trace, supply chain management, reward management, inventory management, marketing campaigns and other functionalities.

Digital authentication through a QR code and barcode take place on the individual product, pack, case and pallet level. Variable and unique QR codes are difficult to copy and provide security on each level of the supply chain. Holostik a pioneer of anti-counterfeiting solutions and provides a range of holographic and digital authentication solutions for securing supply chains. Its security holograms enabled with digital authentication solutions helps in providing a multi-layered security approach to the product and the company.

Four men accused of duping Amazon of Rs 70 lakh with fake products

Recently four men were accused of duping e-commerce giant Amazon. The forgers cheated with an amount worth Rs 70 lakh. The matter came to light when Amazon filed a complaint with the Koramangala police. The accused persons include two assistant managers of the third-party service provider.

In his complaint, Nishad Sharma has identified four men namely Ravi Kumar, Sonu, Mohammed Anwar, and Shiv Naik. The FIR mentions that two of the accused are assistant managers with a Koramangala-based third-party service provider

According to reports, the accused used Amazon’s “Returns, Refunds and Replacement” policy to steal close to Rs 70 lakh from the e-commerce giant. Since Amazon refunds customers who receive either damaged or substandard quality goods, Anwar and Naik who were in charge of such refunds used the policy to line their own pockets. At the time, all of the accused are absconding.

With the help of the two others accused in the case, Naik and Sharma purchased several different commodities and returned them only after replacing them with fake ones. The fraud came to light only after Amazon executives began checking the products that were sent with the fake products returned to the company by the accused.

Source: Mirror Now