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Rampant Counterfeits Have American Consumers on High Alert

An era of counterfeiting top brands and false claims about product characteristics has left U.S. consumers with a lack of trust in what they’re buying—including when it comes to apparel and textiles.

A new Harris Poll found 79 percent of Americans are concerned that products they purchase, which they expect to be high quality, could be made using low quality materials, while 71 percent are concerned that products they buy have made false claims. The survey of more than 2,000 U.S. adults conducted online in June on behalf of Applied DNA Sciences, a leader in DNA-based authentication, found that 65 percent are worried products they purchase at full price could be counterfeits.

The prevalence of inauthentic products is growing significantly. The 2018 Global Brand Counterfeiting Report said, globally, counterfeiting reached $1.2 trillion in 2017 and is expected to reach $1.82 trillion by 2020. The U.S. Customs and Border Patrol (CBP) published statistics for the fiscal year in 2016 that showed 31,560 seizures over intellectual property rights infringements, up 9 percent from the previous fiscal year. CBP estimated that the total manufacturer’s suggested retail price of the seized goods would have equaled approximately $1.4 billion if they were legitimate products.

Last month, two seizures of goods by CBP combined for an estimated $59 million in counterfeit merchandise—more than 260,000 pieces of garments, consumer electronics, cosmetics and jewelry. This included major brands like Adidas, Calvin Klein, Casio, Chanel, Coach, Diesel, Fendi, Gucci, Hugo Boss, Luis Vuitton, Mark Kors, Nike, Under Armor and Yves St. Laurent.

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The Federal Trade Commission has brought action in a series of cases in the last couple of years regarding false claims of Made in U.S. products. In January, Bollman Hat Co. agreed to stop making false claims that the hats and other products it sells are all or nearly all made in the U.S., and to stop deceptive use of its “American Made Matters” certification and marketing materials, as part of a settlement with the FTC.

In March, California-based Nectar Brand LLC agreed to stop making false claims that its Chinese-made mattresses are assembled in the U.S., under a settlement with the FTC. According to the FTC’s complaint, Nectar Brand claimed in promotional materials that its mattresses were “Designed and Assembled in USA,” but in fact the mattresses were wholly imported from China, with no assembly taking place in the U.S.

“This survey confirms that selling inauthentic products can be extremely detrimental to companies and their brands,” Dr. James A. Hayward, chairman, president and CEO of Applied DNA Sciences, said. “In fact, nearly all Americans (94 percent) say that, if they found out a product they bought at full price was inauthentic, they would take action.”

Among those actions, 73 percent would stop buying from the company that sold it, 67 percent would try to return the product, 63 percent would tell friends and family about their negative experience, 43 percent would formally defame the company that sold it by writing a negative review and 43 percent would report the company to regulatory agencies.

Additional findings of the survey suggest Americans disapprove of unethical business practices and the use of forced labor, with nearly three quarters of Americans are concerned that products they purchase could be made using forced labor or by companies that use unfavorable business practices.

“The proliferation of counterfeit products is not only a threat to American brands, but also to American consumers,” Stephen Lamar, executive vice president of the American Apparel & Footwear Association, said. “While lost sales and brand equity are certainly concerns, the dangers of buying a product that does not meet product safety requirements, was made in an unregulated factory or that does not meet quality standards is very real. Creating better public policy, educating consumers and taking advantage of emerging technologies are all essential components in the fight against intellectual property theft.”

Applied DNA, a provider of molecular technologies that enable supply chain security, anti-counterfeiting and anti-theft technology, product genotyping and DNA mass production for a range of industries, including cotton and textiles, said consumers can be more proactive to ensure an authentic purchase. It noted that the U.S. Government Accountability Office suggests consumers become familiar with the brand and know its products. They should also buy only from trusted retailers, know the difference between “fulfilled by” and “sold by” and be wary of “too good to be true” prices.

“Years of technological advancement have made it harder to spot inauthentic products,” Hayward added. “As a result, consumers are deceived into purchasing an inferior or unethically produced product. We offer an authentication solution to manufacturers by using biotechnology as a forensic foundation to track products on a molecular level from source to seller. It provides supply chains with scientific proof and physical traceability of materials and products.”