The Buy Safe America organization recently published a report claiming that online sales of counterfeit products from China have wreaked havoc on the U.S. economy as well as posing a danger to consumers themselves.
According to Michael Hanson, a spokesperson for the NGO who wrote for The Hill, online sales increased considerably during the pandemic, increasing the number of fraudsters using popular platforms such as Amazon and Facebook to sell counterfeit products made in China to consumers in the United States.
Hanson explains that both Amazon and Facebook have not made security a priority, and the scammers, once caught, change their names to go back to selling counterfeit products.
According to its website, buy Safe America (BSA) is a diverse group of retailers, consumer groups, manufacturers, and law enforcement that support efforts to combat organized retail crime and protect consumers and communities from the sale of counterfeit and stolen goods.
On the occasion of the holiday season, BSA released its report “The Counterfeit Silk Road—Impact of Counterfeit Consumer Products Smuggled into the United States,” which seeks to shed light on the danger to the millions of consumers who shop online.
“Counterfeit goods, most of which are being shipped directly to doorsteps from China, are flooding the U.S. market by way of third-party marketplaces that require little to no accountability to ensure the products they sell are legitimate, and more importantly, safe,” says the report’s brief introduction.
It estimates that just 21 products or goods alone account for nearly 70 percent of all smuggled goods entering the country and generate more than $54 billion in lost sales for local wholesalers and retailers.
On its website, BSA documented stories of U.S. consumers having accidents with these counterfeit Chinese products ranging from exploding batteries, non-working seat belts, deadly drugs, and fake N95 masks.
The figures released by the organization are alarming:
1.5 billion was the figure for counterfeit toys imported.
6.8 billion dollars was the number of counterfeit cell phones imported.
7.2 billion dollars were lost in tax revenue for individuals and businesses.
39,000 jobs in the wholesale sector and 280,000 in the retail sector were lost due to the importation of these counterfeit products.
” There is no doubt the increased sale of counterfeits is linked to the rise of online marketplaces,” Hanson said. “In 2019, over 59 percent of all goods seized by U.S. Customs and Border Protection (CBP), were being shipped by mail or international express consignment services, while about 23 percent arrived by ocean vessels.”
“The data shows a significant increase in these shipments that began in 2014, when Amazon began aggressively courting Chinese sellers in response to Alibaba’s IPO,” the BSA spokesperson added.
Hanson urges U.S. consumers to contact their representatives to pass the INFORM Act that would force online platforms such as Amazon and Facebook to set up security systems to prevent scammers from opening an account and selling fraudulent goods.
But Hanson warns that both companies are lobbying Congress to prevent the law from passing.
“Facebook and Amazon have opened up their wallets to fund an aggressive lobbying campaign to kill efforts to protect consumers. Congress needs to ignore this smokescreen and address the mounting economic and consumer safety threats posed by the silk road of counterfeits coming from China,” said the BSA spokesperson.
China is considered the world’s biggest ‘thief’ of intellectual property.
In 2019, the Trump administration closed the Chinese consulate general in Houston, Texas, for considering it a ‘hub of spying and intellectual property theft’ while the FBI director said the agency has to open a counterintelligence investigation on China every twelve hours.