Buying Counterfeit Goods: Laws and Resources

You've probably seen a counterfeit good before. Maybe you even purchased one by accident when you realized that the brand-name product you bought at an incredible price was indeed too good to be true.

The competition is steep in a digital age when customers can order products around the world. Customers seek cheap prices, and sellers want to maximize profits. Counterfeiting has become a booming industry as some people exploit these conditions.

Counterfeit products aren't a win-win scenario. They present serious legal and safety risks along with a frustrating shopping experience. As a consumer, know the warning signs and consequences of buying counterfeit goods.

What Is a Counterfeit Product?

Counterfeit goods are products that someone sells under another company's trademark without a license, usually with inferior quality. Some people also refer to counterfeits as bootleg or black-market goods.

A trademark is a company's official logo or other signature symbols. Once a company registers with the U.S. Patent and Trademark Office, it can legally prevent other companies from using similar marks that might confuse consumers.

Companies put trademarks on products so customers will build trust in their brands. You'll know what to expect from a product when you see the brand's name or logo. Trademarks can also set broader expectations for warranties and other customer service-related benefits.

Counterfeit products exploit this brand recognition. Consumer protection laws ban deceptive trade practices like counterfeiting.

What Isn't a Counterfeit Good?

Counterfeit goods differ from knockoff or dupe products. Knockoffs might remind you of another brand's design, but they don't have labels that violate another company's trademark.

Many retailers create knockoffs that simulate the same effect of another company's products. For example, many grocery stores sell generic versions of brand-name products under their own label.

Counterfeits also differ from pirated goods, which are a different type of intellectual property infringement involving genuine products. For example, a pirated movie is the same one you would otherwise see in a theater, but the method of accessing the movie is illegal.

Examples of Counterfeit Goods

Counterfeit products exist in nearly every industry and can include:

• Clothing and shoes
• Accessories like sunglasses, handbags, wallets, and jewelry
• Pharmaceuticals
• Electronics, including cell phones and computers
• Toys
• Baby food and formula
• Automotive parts
• Cigarettes

When you buy a product, carefully examine the item, its description, and the seller. If you suspect the item is a replica of a legitimate product, you might want to reconsider buying it.

How Common Are Counterfeit Sales?

The frequency of counterfeit sales in the U.S. is somewhat unclear because fake items can be hard to identify. The U.S. Department of Homeland Security has reported increased counterfeit seizures over the years, but there are counterfeit goods that the government and researchers never detect.

Defective counterfeit products have even been sold to U.S. government agencies. These counterfeits can pose a significant danger to public health and safety. For example, fake military equipment may put the lives of service members or nearby citizens at risk.

Why Is Buying Fake Products Bad?

Aside from the direct harm to companies and designers, counterfeit goods may also:

• Introduce dangerous products into the market
• Weaken environmental, health, and safety regulations
• Diminish tax revenues
• Support organized crime
• Promote child labor and harsh working conditions

The money you spend on a counterfeit item could go to waste. Poorly crafted products may be quick to break, or they might fail to fulfill the purpose you bought them to serve. If you find an issue with the item, you won't have any options to fix or return it through the genuine company.

Consumer Safety Issues

As a consumer, your safety is among the leading personal risks of purchasing fake goods. Unreliable imitations of authentic products can be dangerous to buy and use.

Counterfeit manufacturers often keep costs low by cutting corners throughout the production process. They may use weak supports, dangerous toxins, or degradable materials. Counterfeit drugs may not include the necessary active ingredient, or they might contain risky alternative ingredients.

For example, a pair of heels with red bottoms might look like signature Louboutin shoes for a fraction of the cost, but the price may be low because the manufacturer used cheap, brittle glue to seal it. If the bond breaks while you're walking down the street, you could fall and suffer a severe injury.

Is It Illegal To Buy Counterfeit Goods?

In the U.S., it is illegal to traffic counterfeit goods under federal law protecting trademarks. Trafficking includes the production, transport, and sale of counterfeit goods.

However, you won't go to jail for a knockoff purse you bought on vacation. The U.S. Department of Justice has stated that federal law doesn't prohibit shoppers from purchasing counterfeit products for personal use, even if they know they're fake.

Trafficking convictions carry steep criminal penalties. The maximum penalty for a first-time offense is 10 years in prison and a $2 million fine. For a second-time offense, the penalty is 20 years and a $5 million fine. In addition, if a corporation traffics in counterfeit goods, it can be subject to a fine of $15 million.

How Can You Tell if a Product Is Fake?

A telltale sign of a counterfeit good is often a very low price. You might also identify counterfeit goods by the quality of their packaging and the location where they are sold.

Comparing an item with a genuine product when possible can be helpful. Brand-name items may have unique tags or serial numbers that identify their source. You may also notice whether the item shows low quality, such as a peeling finish or broken seams.

Some counterfeits, such as fake prescription medication, look identical to the real thing. Sometimes, it's only possible to identify a fake with expert knowledge and special tools.

How Can You Report Counterfeit Goods?

If you suspect someone is producing or selling counterfeit goods, you can submit a report online to the National Intellectual Property Rights Coordination Center.

Other federal agencies that investigate reports of counterfeit goods include:

• The U.S. Consumer Product Safety Commission (CPSC)
• The Food and Drug Administration (FDA)
• The Office of Intellectual Property Rights (IPR)
• The Federal Bureau of Investigation (FBI)
• U.S. Customs and Border Protection (CBP)

Anti-counterfeiting agencies might not always recover customers' money directly, but they can work with federal law enforcement to break counterfeit supply chains to keep the market safer for customers.

Online Retailers and Scam Products

Shopping through online marketplaces and e-commerce stores can be a gamble. Scammers can easily steal digital images of products. It can be impossible to tell whether you'll get a counterfeit or the real thing.

Avoiding buying counterfeits online often starts with where you shop on the internet. You can check the seller's reputation before purchasing its products, but be aware that even online reviews can be fake.

Individual customers can't stop online counterfeit schemes as much as businesses and governments can. The International Trademark Association provides a helpful list of best practices for search engines, credit card companies, and trademark owners. These practices can help identify counterfeit goods and prevent their distribution on a larger scale.

Getting Legal Help for Counterfeit Products

You have legal rights as a consumer. You can't always tell whether a product is fake, but you could face significant injuries or costs from one.

If you suffered from a counterfeit goods scheme, you can consult with a consumer law attorney. Legal action can help customers hold manufacturers and distributors accountable for fake goods.