The high price of cheap knock-offs


Just three miles from the headquarters of the Federal Trade Commission in Washington, DC is the heart of Georgetown, home to many of the capital's boutiques. In the streets of Georgetown, you'll see the latest fashions from Kate Spade® handbags and Rolex® watches, Washington Redskins® caps and Hermès® scarf to new Nike® Jordan LX2 ™ NBA® sneakers with Velcro straps. In fact, you could roll the Rollerblade® up to the racks, as many of the hottest styles are sold right on the sidewalk at prices that can't be beat. The Rolex® Oyster Perpetual ™ Sea-Dweller 4000 ™ will return you thirty-five dollars. Inexplicably, the Hermès® scarf is the same. And if you have blinded these contracts, you can take a pair of Ray-Ban® Undercurrent 4006 (TM) sunglasses at less than the entrée price in Milano. Do not use Windex® or Kleenex® to clean the lens as it will destroy the cheap coating. It is also probably a good idea to stop smoking and avoid an open flame when wearing a hand-rolled silk twill shawl. And don't count on Rolex to be on time for this big job interview.

Counterfeits seem to offer a cheap entrée to a higher standard of living, but with every purchase of a knock-off handbag, the relative value of the actual offer decreases. Patents and trademarks, the so-called Intellectual Property, are the environment of most companies. Kate Spade, Ralph Lauren, Tommy Hilfiger and non-title designers, film producers, athletes and record artists deserve to be fairly rewarded for their creativity, intelligence and hard work.

What sets most design products apart is the strengths of their brands. Luxury designer goods are expensive for some reason. Certainly it has a lot in common with the quality of goods, craftsmanship and customer service. More subjectively, prices stem from the wafer that owns the hottest fashion; that is, it is not just how these products look to you or your family, but what you perceive when they say about you, your style, your income, and even your education and values.

Although prices may seem great, the social cost of these charges is huge and can be measured in terms of jobs, tax revenues, health and safety and now more than ever national security. US and international law enforcement officials confirm that Al Qaeda and Hezbollah are actively involved in the import of counterfeit, electronics and other goods and use the proceeds to finance operations and attacks. Interpol's Secretary-General Richard Noble, in a testimony to House International Affairs Committee, said that these terrorist groups, directly responsible for the murder of more than 3,000 Americans on September 11, 2001, and the catastrophic attacks in Bali, Spain, Saudi Arabia, Africa and ongoing attacks on women. “We know that al-Qaeda supporters have been found in volumes of counterfeit goods of commercial size. And if you come across one Al Qaeda operator with (counterfeit products), it's like finding a cockroach in your home. Noble said, sadly, on Canal Street in New York, buyers of knockoff products may unknowingly finance those terrorists who hit hijacked planes at the World Trade Center, which was only a few blocks away.

The US law enforcement agencies spend hundreds of millions of tax dollars each year on tracking the international criminal syndicates responsible for designing, manufacturing and smuggling these watches (along with dangerous fake drugs) and thousands of other products beyond our borders. Counterfeit and smuggling is a duty-free, unlicensed and unregulated industry that is estimated to cost the US economy astonishing. $ 200 billion each year according to the International Anti-Counterfeiting Coalition (IACC). Think about it: Hundreds of thousands of jobs at all levels; billions per year in local, state, and federal tax revenues. Twenty-five or $ 30 at a time this money flows from the local community and upstream into overseas black and gray market groups, whose activities undermine and corrupt foreign governments.

At a time when our law enforcement resources are tense in the global war on terror, you might wonder why the Fed is bothering to go for counterfeiters. The fact is that they often work hand in hand. The connection between terrorism and counterfeiting is not a theory. It is not a frightening tactic that capitalizes on people's fear and patriotism. These are irrefutable facts. Here are some of the IACC factsheet:

  • "Operation Green Quest – a multi-institutional working group set up by the Ministry of Finance to identify, disrupt and dismantle terrorist financial infrastructure and sources of funding – specifically recognized counterfeit goods as a source of terrorist financing."
  • '28. On February 2, 2003, Mohamad Hammoud was sentenced to 155 years in prison for helping in the management of cigarette smuggling that sent Hezbollah's money. ”
  • "Federal investigations are investigating evidence to suggest that Hezbollah, Hamas and other terrorist networks could sell counterfeit products to pay for their global activities … Law enforcement officials said they are investigating counterfeit $ million-based software operations in Ciudad Del Este, in eastern Paraguay, which is believed to have diverted money to middle-eastern groups with links to terrorism. Some suspects are of Lebanese origin and the Paraguayan authorities have been arrested on the basis of information from the US government.
  • "In 1996, Business Week reported that the FBI was investigating the link between the sale of counterfeit goods in New York and the terrorists who bombed the World Trade Center in 1993."
  • "According to a private investigator conducting the search, the souvenir raid in midtown Manhattan led to the seizure of a trunk full of counterfeit watches and the discovery of the Boeing 767 flight manuals, some of which contained handwritten notes in Arabic. A similar raid on a counterfeit cable shop in New York revealed faxes regarding the purchase of bridge inspection equipment. Two weeks after the raid on the purse shop, New Jersey police investigated an attack on a Lebanese member of the organized crime syndicate. They found fake driving licenses and lists of suspected Al Qaeda terrorists – including the names of some of the workers who had been ambushed in the purse shop. "
  • "Los Angeles law enforcement officials are investigating the possible involvement of Wah Ching's organized crime syndicate in organized crime software. In March 1995, he carried out more than $ 10.5 million in counterfeit Microsoft software, holograms, shotguns, handguns, explosives. TNT and plastics Officials believe there were three groups of organized crime, the case began with the control of forging, escalated to kidnapping and eventually found a link to product counterfeiting. This is just one of many examples of links between product counterfeiting, organized crime and the violent crimes committed by these groups. "

Obviously, it is certainly not a stretch to conclude that criminal syndicates that would successfully slip hundreds of tons of illegal goods across our ports and borders every year would not have trouble adding a few dozen Stinger's shoulder anti-aircraft missiles to the order.

In addition to social costs, counterfeits are usually of lower quality, leading to personal injury. Take the knock-off sunglasses. Along with the cheap material, there are also fake labels that claim 100% UV protection. As a result, tinted plastic lenses trick your retina into opening, allowing dangerous ultraviolet radiation to penetrate unprotected eyes. In fact, you are far better off wearing sunglasses than glasses with dubious UV protection. You might think that a fake watch, a bootlegged DVD "Finding Nemo" or a would-be Gucci wouldn't kill anyone. It's not that easy. Behind the street vendor who sold you, a film or fashion accessory is often a chain of crime that is spreading all over the world and funding unregulated laboratories that release potentially lethal prescription drugs and even baby food. It won't stop there.

IACC reports that US sales of counterfeit car parts are worth $ 12 billion each year for 210,000 workers. And in contrast to the fake $ 25 scarf, you might not figure out if your brake pads are real until the insurance company gets the burnt wreckage of your minivan. The false parts of the aircraft even participated in many fatal accidents, some of which involve our soldiers and airmen.

So how do you tell the real fakes? It's easier than you think. With hundreds of knockoffs for each original article, the complete list would be the size of the phone book. Here is the primer.


  • Top fashion is usually sold from its own department stores or through authorized department stores and boutiques. They are rarely sold in discount stores and surplus stores, where many counterfeits often occur. A finding is often as easy as visiting a designer website or calling his 800. Avoid any “boutique” whose main architectural feature is poultry, wires, idle or windscreen parking tickets.
  • The number of online merchants with “replica” and “design inspiration” is staggering. In fact, more than ten percent of counterfeit goods worldwide are now sold online. Premium branded clothing is rarely sold through online auctions and discounts. While eBay and other online auction houses strictly prohibit the sale – especially retail – of selling counterfeit goods is often difficult. When an online counterfeit seller is discovered, it often reappears under a new URL within a few days. A quick visit to the designer website will let you know who is authorized to sell your goods.
  • In order to protect consumers, people traveling in car parks in stadiums or in adjacent streets do not sell official sporting goods; As with other branded products, official team and league clothing is sold by authorized retailers and manufactured by official licensees.


  • If the price seems too good to be true, it is. You may find a lot on that Rolex Dayton, but you won't pick one for thirty-five bucks.


  • True DVD movies do not have silhouettes of people wearing gigantic popcorn bags walking in front of the set. They're not on sale until the movie hits the theater. And if the movie still plays in the street theater, it's likely that the DVD of the movie is fake. Due to the counterfeiting of thousands of products, it is not possible to list the myriad characteristics of each. Again, the official website often has a site dedicated to detecting counterfeits.

Manufacturers are fighting back by hiring private investigators and intellectual property lawyers to take legal action against counterfeiters and even street vendors selling goods. In one case, a private detective who works for a solicitor representing a major consumer goods manufacturer, presented as a customer in search of fake Cartier watches. Toronto Globe & Mail notes that the clandestine investigation has yielded valuable information on 'well-connected' counterfeits and products & # 39; A lawyer is currently in the process of settling a claim for damages of more than $ 1,000,000. An intellectual property lawyer continues to receive judgments against individuals and businesses that violate their clients' designs, but such measures remain uphill battle without much law enforcement.

Many companies have teamed up to help law enforcement and protect consumers from knock-offs. In particular, the major professional sports leagues and collegiate athletic authorities have formed a coalition, with sports logos or CAPS,, to protect the lead. This informational site contains links to NBA, NFL, NHL, MLB, NCAA and other leagues & # 39; sites where you can find detailed information about counterfeiting. These leagues have gone through the next step by standardizing their anti-counterfeiting measures to include unique holograms of the trademarks in question that are attached to the licensed products. Major software manufacturers and business organizations have also formed coalitions to fight their huge pirate problem; among them are the Business Software Alliance, the Software & Information Industry Association, the Motion Picture Association and the Recording Industry Association. Each of these organizations offers comprehensive online information to help protect consumers from counterfeit.

Perhaps out of ignorance, many people, even those who can afford to buy an original article, choose to buy fakes. One person who buys a handbag of a similar appearance cannot change, thinks. Think again. Although manufactories, money laundering, underground drug labs, and terrorist training camps are far from the street merchants in Georgetown, Lower Manhattan, Boston or LA, they are complicit.