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The Consequences of Counterfeiting

While you may think that purchasing counterfeits on the cheap is doing no harm, consider the fact that many counterfeits were made and sold by criminal organisations, many of which have connections to international terrorist organisations. Now, $20 for a fake designer handbag may seem like a drop in the ocean. However, imagine hundreds of thousands of others purchasing counterfeits without realising where their money is going, and you’ve got yourself a multi billion-dollar industry funding the next terrorist attack. This was exemplified with the attacks in Paris in early January 2015, where it was confirmed that the assailants sold counterfeit goods to purchase weapons.


However, counterfeiting is nothing new to criminal organisations, as back in 1993, the FBI had strong evidence to suggest that the first attacks on the World Trade Centre were financed by the illicit sale of counterfeit clothing. In fact, counterfeiting is sometimes the preferred method of revenue raising, as in comparison to drug trafficking and arms dealing, counterfeiting is a low cost, low risk yet high yielding option to acquire funds. The International Chamber of Commerce (ICC) estimated the total value of international and domestic trade of counterfeit and pirated goods in 2013 was between $710 to $ 917 Billion. In addition, many of these counterfeit products were made illegally, with the use of sweatshops and child labour. The ICC estimates up to 2.6 million jobs world wide were displaced due to counterfeit activities.


When we think of counterfeiting, most of the time we think about the fashion industry. Indeed, handbags, wallets and other leather goods are among the most counterfeited items in the world, as well as jewellery and accessories (watches, pendants, sunglasses), apparel and footwear. However, counterfeiting affects just about every marketplace imaginable, such as cigarettes, personal electronics, optical media (CDs/DVDs), children’s toys and even food and drinks get counterfeited.


There is also a black market for counterfeit car parts. In 2016, 33,000 counterfeit Toyota parts worth up to $1 million (AUD) were seized by Chinese police in Guangzhou. While the idea of buying cheap to save money is attractive, for car parts you get what you pay for, and what you’ll get are poor quality parts that will fail faster than genuine parts. This can lead to exponentially higher repair costs and even worse are accidents and fatalities caused by the parts failing.


Counterfeit cellphones seized in Binondo, Philippines (photo by the Philippines Bureau of Customs, via WikiMedia Commons)

From iPhones to Macbooks, batteries, powerboards, headphones and videogame consoles. Counterfeit electronics are cheaply made, break easily and do not work as well as the genuine article, sometimes they don’t work at all. In addition, you run the risk of electrocution due to no safety regulations and poor quality. In the US, the value of counterfeit computers and computer accessories was estimated at $19.3 million in 2016, and the total value of seized consumer electronics reaching an astonishing value of $122.9 million.


Cosmetics are dangerous counterfeits, as they can cause allergic reactions, respiratory problems and cause burns and rashes. Pharmaceuticals and medicines are even more dangerous. Counterfeits might have the wrong active ingredient, the incorrect dosage of the active ingredient or no active ingredient at all. Sometimes, they could be laced with toxic chemicals. According to the American Journal of Tropical Medicine and Hygiene, counterfeit medicine generated an estimated $75 billion in 2013 and falsified anti-malarials accounted for an estimated 122,350 deaths of children under the age of 5 in sub-Saharan Africa.


As you can see, the cost of counterfeiting is staggering. So, the next time you come across a counterfeit, whether it’s in a marketplace overseas, in your own country or online, leave it alone. Save your money and find a genuine product. The distributing and knowingly purchasing counterfeits can result in up to 5 years prison time and a hefty fine up to $99,000 (Trade Marks Act 1995). Counterfeits are not worth the risk.



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