The Dark Side of Ecommerce: Rampant Counterfeiting Ravages Canada

Posted by Dan Verhaeghe

Counterfeiting has quickly become one of the largest and fastest growing industries in the world.

An early January CBC documentary called Counterfeit Culture revealed there are forms of counterfeiting beyond the consumer’s control. Never mind the fake Rolex watches and Ray Ban sunglasses. Counterfeiting has infected industries such as medicine, automobile and aviation. It has also sadly led deaths in the Western world, such as the famed 1999 Concorde airplane crash in Paris. That was caused by the plane hitting a counterfeit part, which was on the runway because it fell off another airliner that had just taken off.

For the technology consumer, counterfeit accessories and software could be harmful to devices of all shapes and sizes we own. It doesn't help that the ease of setting up an e-commerce website has only accelerated the problem in recent years.

“Counterfeiting is real, it’s out there and potentially at a store near you,” says Lorne Lipkus, founding member of the Canadian Anti-Counterfeiting Network in December. “Today’s counterfeit operations are extremely advanced and often linked to organized crime. The risks to Canadian consumers both online and in-store are high due to lack of education on how to detect counterfeit products.”

77% of Canadians agree they are not likely to purchase counterfeit goods knowingly, from a poll conducted in November by Angus Reid. But they have a more difficult time understanding the difference between a real and illegitimate product.

That’s why Microsoft has a site called How To Tell, which has been visited by 360,000 Canadians since 2005. It increases consumer awareness as online shopping becomes increasingly popular. Over the holiday season, 58% of Canadians were concerned about purchasing counterfeit goods online, versus just 35% in-store.

The personal risks associated with counterfeiting were most believed to be productivity loss (77%), privacy breaches (72%), and personal injury (64%). Microsoft says to do your research, compare the price, look for flaws and use available resources.

The counterfeiting problem is not expected to go away anytime soon. The Royal Canadian Mounted Police expects there to be $1.7 trillion dollars in counterfeit goods by 2015 in Canada. Just $24 million worth was seized in 2010, $67 million in 2011 and $78.5 million was projected for 2012. Less than 3% of containers entering Canada from other countries are ever searched. Due to limited border patrol staff and resources allocated, don’t expect this number to increase anytime soon.

The VP of the International Anti-Counterfeiting Coalition, Travis Johnson, is exceptionally dismayed at a worldwide problem that is particularly out of control in countries like Canada.

Major news outlets such as the Toronto Sun and CBC News reported in late November that there is pressure on the Canadian government to catch up. The Canadian Anti-Counterfeiting Network is hoping counterfeiting will be fully integrated into the Criminal Code. This would prohibit the importation and possession of false items to a higher degree.

However, it's ultimately the sort of problem that will never fully go away.

Image: CBC

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Dan Verhaeghe

Dan Verhaeghe

Dan Verhaeghe focuses on marketing, mobile, major technology players, entertainment, and new media. Dan has a dozen years of online experience that dates back to the turn of the millennium where he dominated a now non-existent online RPG game for a couple of years at the age of 15. He would eventually become a Toronto Blue Jays blogger who earned his way into Toronto's CP24 studios six years... more




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