NEW YORK (MainStreet) -- Counterfeiting is usually associated with guys in trench coats selling fake Rolexes or Louis Vuitton handbags on New York street corners. And while luxury watches are indeed a popular item among counterfeiters, the practice hardly ends there.
To find out how deep the knock-off rabbit hole goes, we spoke to Bill Patterson of
, which provides global anti-counterfeiting solutions to brands in various sectors. As he explained, it's not just brands that need to worry about counterfeiting. It's also consumers, who can overpay for cheap knockoffs but might also be harmed physically by cheap imitations of pharmaceuticals and perfume. And while some counterfeit items are easy to spot, others can look amazingly close to the real thing, at least to the untrained eye.
Consumers can not only overpay for cheap knockoffs, but might also be harmed physically by cheap imitations of pharmaceuticals and perfume.
"Counterfeit goods run the same gamut of quality levels that you'll find among retail items that you find in stores," he explains. "You will find some counterfeiters that just slap a
label on a bag, but you'd say, 'There's no way that's real.' There are others that can be more challenging."
Here are eight of the products that get counterfeited most frequently, according OpSec.
Though it might seem that brands such as
just put their names on apparel to turn their customers into walking billboards, those brand names have a real value as a signal of quality. It's a fact that isn't lost on counterfeiters who slap the same brand labels on their merchandise.
"Any of those iconic brands that are stitched into the upper left hand area of the shirt, they all get knocked off," Patterson says.
He says that the nature of the counterfeit varies considerably. It's very easy to use a commercially available embroidery machine to stamp a brand logo on a sweatshirt or pair of sneakers, Patterson says, but more ambitious counterfeiters will go as far as stealing design specifications for Nike or
shoes, then will manufacture a close replica (albeit with inferior materials). Because most major brands use contract manufacturers, Patterson says, such corporate thievery is common.
Closely related to brand-name apparel is licensed merchandise -- apparel that has been stamped with the logo of a sports team, for instance. Patterson says that in the case of sports merchandise, the popularity of different items ebbs and flows with the professional sports season; fake Giants and Patriots merchandise, for instance, was extremely popular in the two weeks leading up to the Super Bowl.
Based on what he's seen in the counterfeiting world, he predicts that the next big thing in knock-off sports apparel will be counterfeit Jeremy Lin jerseys. The Taiwanese-American Harvard graduate has quickly become an international sensation in his first week as a starter with the New York Knicks, and his popularity in Asia -- a hotbed of counterfeiting -- is likely to spur production there.
"We have a popular Asian player making the best of his opportunity, the league loves him, the fans love him and he's playing in a major market," he says. "It's absolutely the perfect storm."
The popularity of counterfeiting a class of products often comes down to how easy they are to fake. When it comes to tobacco, there's a low barrier to entry.
"All you need is a backyard," Patterson says.
Well, that's a bit of an exaggeration -- he adds that you need the graphic design skills to replicate the cigarette brand's packaging, plus a small, garage-sized facility to roll the cigarettes. While adherents to the brand will know as soon as they light up that something is amiss (flavor additives are harder to replicate), by the time you've bought the pack, it's too late.
Patterson says that such counterfeit products are common in Asia but more rare in the U.S., where strict taxation and oversight make it difficult to sell unregulated cigarettes.
Erectile dysfunction drugs
Knock-off Viagra and Cialis is harder to come by in the U.S. than in some other countries, since you actually need a prescription to get the stuff. But that doesn't stop counterfeiters from selling fake ED drugs online. Patterson adds that some counterfeiters will skip trying to replicate the brand and simply market "homeopathic" remedies that carry the disclaimer that their claims haven't been evaluated by the Food and Drug Administration.
ED medications are just one of many pharmaceutical products that counterfeiters try to replicate -- the list includes everything from Oxycontin to life-saving cancer drugs, with brands from
being faked -- and obviously that's a practice that can do great harm to consumers. Patterson says that counterfeiters will usually include a much smaller amount of the active ingredient than the real thing, and the inactive ingredients will sometimes be composed of whatever material counterfeiters had on hand, from lighter fluid to rubbing alcohol.
Yes, Rolexes (and luxury watches in general) remain among the most popular counterfeit items, and to the untrained eye it's very difficult to spot a fake.
"Can you tell the difference? Yeah, when it stops working," Patterson says.
While most people are smart enough not to buy a Rolex off the street (or at least, not to pay anywhere near full price), there's another hidden danger in the luxury watch market: counterfeit parts. There's a real risk, Patterson says, that you'll take your real watch to a watchmaker who's decided to cut costs by buying knock-off parts that haven't been finely calibrated to fit your exact watch. To avoid this, Patterson advises consumers go to an authorized retailer for any repairs if you already own a Rolex or other luxury timepiece.
CDs and DVDs
Speaking of things you can buy on the street in New York City, how about counterfeit discs?
Once a movie is released on DVD, it isn't long before it's uploaded to a file-sharing Web site to be pirated and watched on a computer. But it's a little harder to find pirated movies while they're still in theaters, and that's where the sidewalk counterfeiters come in. While these home movies are sometimes produced using the old-school tactic of sneaking a video camera into a theater, Patterson says he increasingly sees higher-quality discs that are made by pirates who get their hands on a review copy for the disc that was intended to be screened by voters for the Academy Awards or other awards programs.
"Supposedly they're digitally watermarked, but it doesn't stop them from getting copies out there," Patterson says.
Completing the trifecta of counterfeit goods usually found on a blanket on the subway is the luxury handbag, usually bearing the logo of Louis Vuitton,
It's not a coincidence that it's luxury items that tend to get counterfeited so often. Any time a product is priced out of reach of the average consumer, there's going to be a market for a cheaper version (which is why there's also a market for counterfeit cancer drugs, which cost thousands of dollars for the real thing). In the case of luxury handbags, which are exorbitantly priced because of the perceived value of their brand, counterfeiters are able to create a close replica at a deep discount and still turn a nice profit.
The phenomenon of counterfeit tablets drives home one of the key points of spotting a fake: If it sounds too good to be true, it probably is.
Patterson's firm OpSec notes that there has been a big rise in
recently, with Android devices being a particular target. The company points to business-to-business e-commerce sites such as Alibaba and TradeKey, which it says counterfeiters use to sell tablets in bulk at ridiculously discounted prices -- for instance,
Xoom tablets for less than $100 per unit (they usually sell for around $400). Treat any super-cheap tablet on an auction or business-to-business site with a high degree of suspicion, and check for a manufacturer's warranty, which the fakes tend to not have.
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