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Counterfeit goods lead to economic loss

Have you ever complimented someone on an item of clothing, watch or tech toy and received in reply a story about how much money the owner saved when he or she bought it? Getting a good deal on a pricy item is something every California consumer seeks, and something they want to tell others about—even if the item is a knock-off. A look at the other side of the story, however, reveals how much money that item really costs in terms of economic impact.

According to U.S. Immigration and Customers Enforcement, federal authorities recently arrested the owner of an Orange County-based electronic components reseller on charges of counterfeiting. A multi-agency investigation led to the indictment of the business owner on multiple charges, including that he allegedly and knowingly bought integrated circuits—already discarded, used or outdated—and resold them as new parts from top name-brand manufacturers.

After suppliers repainted and re-applied counterfeit company logos, parts shipped to the California store were altered further by changing their lot codes, country of origin or date codes to allow them to be sold as new. One of the customers is the U.S. military. The charge specific to the fake military goods also includes a statement that the goods were likely to result in injury or death to a military member from a malfunction or failure.

Along with specific issues such as these, there are safety concerns to all American consumers, according to Athens State University. Bad transformers and faulty batteries can be explosive in some environments. More than this, counterfeit goods hurt the economy. It is estimated that as much as 20 percent of the electronic parts in a single industry’s supply chain are counterfeit, and the fakes are showing up in goods that make it all the way to Target and Apple and from there, to consumers.

Counterfeiting impacts the electronics industry worldwide by more than $100 billion annually. For individual companies, it can increase costs while slowing productivity. Eventually, the business’ reputation may suffer and cause millions in lost revenue, which directly affects workers and the economy through decreased revenue and job loss.

Counterfeit goods affect many industries, including music, pharmaceuticals and fashion, which includes purses, watches and more. The market for these products is lucrative, making it attractive for a variety of sellers, and it has become somewhat acceptable to buy knock-offs. Even when both buyer and seller know a product is fake it is illegal to sell because it can continue to deceive others. If you sell knock-offs, you are engaging in an illegal act and may need the help of an attorney.

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