Holiday shoppers beware. That "great deal on the internet" may just be counterfeit. The amount of fake merchandise is proliferating.
For an added twist, it's not just the fake products you need to watch out for. Fake websites also try to trick consumers. As Americans have shifted to shopping online, the bad guys have adapted. Some have cut out the middlemen and are now selling counterfeit products directly to unsuspecting consumers online.
“Criminals have begun to set-up counterfeit websites that look and are designed to appear as they are the legitimate retailers’ websites, but are not," says Lev Kubiak, who directs Homeland Security’s National Intellectual Property Rights Center.
For example, a fake website for Tiffany looks just like the luxury jeweler's real website. And if you're shopping for headphones, the fake site for Beats by Dre is almost identical to the original.
And this new tactic comes as officials also see growth in the number and variety of counterfeit products.
“It’s a very serious problem," says Kubiak. "The extent of the issue has been growing significantly.”
Criminal organizations are defrauding American consumers on a more regular basis, says Kubiak.
“And we’re seeing them in larger and larger numbers throughout the United States.”
A visit to the Port of Long Beach shows just how hard counterfeits are to stop. At a customs warehouse, the contents of 44-foot cargo containers are spread across the concrete floor. In the past, criminals sent their fake goods in bulk.
“We used to see five, six, seven containers of the same merchandise," says Jaime Ruiz, a spokesman for Customs and Border Protection. "Now what we see is that they mix some of their products, some of their counterfeits, with legit products as well.”
Customs officers confiscate the knock-off brands you might expect. Like Prada, Chanel, Gucci, Hermes and Louis Vuitton.
Nationwide, in 2012, customs saw 142 percent increase in the number of fake wallets, purses and handbags.
“I’ve learned more about handbags than I ever wanted to know,” says Peter Green, section chief of trade operations with U.S. Customs and Border Protection.
But the most troubling fakes are the unexpected ones. Counterfeit electrical cord can cause a shock or start a fire under the Christmas tree.
Even brands of batteries get impersonated. Fake Duracells even incorporated the Energizer Bunny in the packaging.
“It’s possible for them to explode," says Green, "which they have in the past.”
Counterfeit toothpaste and shampoo can carry harmful bacteria.
“Criminal organizations involved in the sale of counterfeit merchandise have really expanded into literally every name-brand product out there,” says Lev Kubiak.
Surprising counterfeit items include software from the company Rosetta Stone, which teaches people to learn foreign languages.
“They estimate that they lose up to 25 percent of their total annual revenue to counterfeit versions of their product,” Kubiak says. “That, in turn, equates to fewer jobs. Fewer people they can employ.”
Auto parts are a popular target for counterfeiters, who crank out fake brake pads, fake master cylinders, fake seat-belt-actuators and fake air bags.
Officials believe about 15,000 fake air bags have been sold in the U.S.
Tests of counterfeit air bags found that many didn’t deploy. And about 20 percent of cases, Kubiak says, they “explode like a small bomb, shooting a three-and-a-half foot flame.”
Officials have found fake bearings that operate a mine-shaft assembly. Counterfeit parts have even found their way into the military supply chain.
Fakes could be on your medicine shelf.
Kubiak says some Americans are being sold counterfeit pharmaceuticals, “thinking that it’s the real drug, but there’s actually no active ingredient inside there, so absolutely no way for people to get better. Even in such cases like cancer medication.”
To avoid buying a fake, try to avoid visiting an imposter website. Type in the web address directly instead of clicking on a link.
And Kubiak warns to watch out for websites that redirect you to another site when it's time to pay. That’s a sign of a counterfeiter.
Also, when trying to avoid fakes, watch out for prices that are significantly lower than average. And check with the product’s maker to confirm that a particular merchant is a trusted distributor.