Fake Europe – the creeping and insidious impact of counterfeit tech products

Stericycle ExpertSolutions Europe VP Farzad Henareh talks about the problem of counterfeit tech products in the market such as fake hoverboards.

Counterfeit goods, piracy, knock-off. Whatever term we want to use, intellectual property violations are growing and with every counterfeit product that reaches the market, the risk of harm – both to people and to businesses – grows.

A high profile case causing concern relates to hoverboards. These self-balancing boards which have been growing in popularity over the last few months have been widely recalled due to safety issues, often relating to counterfeit parts.

Consumers are being advised to look out for non-approved fake plugs with incorrect markings and counterfeit fuses; a lack of branding or manufacturers details on the packaging or product itself, and misspellings in the instructions or on the packaging.

Electrical Safety First provides guidance to keep consumers safe, which given that these items have caught fire, is essential.

While fake consumer goods, like hoverboards, tend to hit the headlines more, this phenomenon actually affects products across all sectors from electrical appliances, toys and clothes through to food, pharmaceuticals, and even currency.

According to a situation report recently prepared by Europol and OHIM (Office for Harmonisation in the Internal Market), customs statistics clearly indicate that the majority of counterfeits are being sourced from outside the EU.

The main countries involved include not only China, which remains a major source although it is increasingly attempting to tackle its counterfeit production, but also other Asian countries that specialise in certain categories (e.g India for medicines, Egypt for foodstuffs and Turkey for perfumes and cosmetics).

Despite more effort being made to combat counterfeiting, the acknowledged links to organised crime, and the harm it causes to brands and consumers, it is proving difficult to police and control, and the criminals behind it continue to make vast returns.

A study commissioned by the International Chamber of Commerce and carried out in 2010, indicated that €10 billion and more than 185,000 jobs were lost in the EU due to piracy alone. In the UK in 2013/14 HM Revenue & Customs collected over £34 billion in customs duties and border officials detained 21,494 consignments of IPR-infringing goods at the UK border.

Whilst these figures are shocking, it is the impact on businesses and consumers in their everyday lives that has to be prioritised. Electrical Safety First (ESF) estimates that over one million people in the UK have purchased a counterfeit product in the last year.

Many are taken in by convincing stock images online, slightly discounted pricing set just below RRP and when they receive the product, safety symbols that appear to be genuine.

ESF advises consumers who have bought a counterfeit item to contact the supplier immediately asking for an explanation, and if this is not forthcoming to contact the retailer managing the marketplace e.g. Amazon, to intervene.

Counterfeit electrical products are very risky because they may contain faulty parts that can overheat, catch fire, or even deliver an electric shock. If the retailer is unable to help, ESF suggests trying the Citizens Advice consumer helpline.

In the technology market there have been numerous cases involving counterfeit mobile phones and tablets, chargers for many smart devices, and laptop computers.

As with so many products, the key giveaways are the price being too low, the goods being available before they have been officially launched, the look and feel of the product and the lack of a genuine manufacturer’s product code and warranty. 

While counterfeit products pose a health and safety risk to consumers there are other issues for manufacturers and retailers to deal with.

Counterfeit products can reduce demand for genuine goods which lowers revenues, but in order to protect their brand reputation, companies often have to get involved in product recalls, investigations and legal action which is costly in terms of both time and money.

If a company’s products have been faked, it might be advisable to consider a recall in order to take control of the situation. This will allow the company to protect its brand and the safety of its valued customers. It’s worth bearing in mind that a good recall experience will enhance customer loyalty, particularly if they understand that the company is working with their best interests at heart.

About the author

Farzad Henareh is Europe VP at Stericycle ExpertSolutions.

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