Wednesday, June 24, 2020

Virus Spawns its Own Pandemic as Counterfeit Goods Flood the Online Supply Chain

As Logistics Outfits Required to Check Imports Some Tips on Avoiding Fakes
Shipping News Feature

UK – EUROPE – WORLDWIDE – We have in the past written of the difficulties for fulfilment houses, usually a sector managed by freight forwarders and logistics operators spurred into action by the huge growth of on-line shopping and e-commerce. A hardening of attitudes by Customs authorities has meant that those controlling stocks of imported items are tasked with ensuring that the stock is genuine, a difficult task to say the least.

In 2019 the OECD and European Intellectual Property Office (EUIPO) reported that the global trade in fake goods is now worth $509 billion with almost 7% of products imported into Europe being counterfeit. Fake goods imported to the UK are worth over £13 billion and result in losses of £4 billion to the retail and wholesale sector, whilst EU customs authorities revealed that over 37% of detained articles were potentially dangerous to the health and safety of consumers.

The HMRC ‘Due Diligence Scheme’ places full responsibility on the Fulfilment House to ensure all stock is as it should be, with the mandatory necessity of keeping faultless records as to origin and distribution, and with prosecution awaiting the unwary. Now the Anti-Counterfeiting Group (ACG), an organisation that numbers such as the Royal Mint and De La Rue amongst its membership, has issued some statistics as to the current proliferation of fake, and as we say in some cases, dangerous goods.

Banks and retailers have reported a huge rise in phishing and scams online and on social media. In April Barclays reported that 43% of scams took place on social media and Google reported a 350% increase in phishing websites detected since the start of the year. While jobs and businesses have suffered during the pandemic sophisticated online criminals are making huge profits that fund serious crime. Fake goods imported to the UK are worth over a staggering £13 billion and result in losses of £4 billion to the retail and wholesale sector.

The ACG offers some general advice for everyone shopping online and points out that, since the pandemic, online sales have risen dramatically with consumers spending 40% more via the internet. Many of these are new online shoppers, which means they may be more susceptible to fraud. With many planning to continue with their online shopping habits, consumers need to be wary about the rise of counterfeit goods being sold in this way.

In 2019 31% of consumers have unintentionally bought a fake product online (up from 24% in 2018), of which 23% bought that item via social media, either through a post or a sponsored advert. Not only does buying counterfeit goods cost the UK economy billions in lost revenue and taxes but it could also cost you your life or health.

It’s not just fake luxury goods that you need to look out for. Criminal gangs sell fake food and beverages, pharmaceuticals, mobile phones and chargers, software, car brakes, and everyday household products like shampoo. The pandemic has led to a massive increase in the sale of fake Covid-related items. During March/April 2020 there was a 2,490% increase in fake face masks and a whopping 270% increase in non-genuine hand sanitiser and wipes.

The ACG says research from one of its members highlights that 32% of those who have bought one or more counterfeit goods have suffered a health issue as a result. Phil Lewis from the Anti-Counterfeiting Group says,

“Shopping in the midst of a pandemic means more people are opting to shop online from the safety of their own home. However, consumers need to be wary when shopping online, 83% of fakes come from China and Hong Kong. Shoppers need to make sure they double-check that what they are buying is not a counterfeit by reading consumer reviews, and confirming the payment credentials to make sure the items are being sold by an approved seller from the country they claim to be resident in.”

The ACG runs a Consumer Advice line to offer tips to help buying fake goods online which can be accessed HERE.