Counterfeit products are not only bad for business, they’re dangerous too.
A recent American Apparel & Footwear Association survey showed that 36.2 percent of the counterfeit footwear, clothing and accessories that were tested recently failed to comply with U.S. product safety standards.
The tests showed significant amounts of arsenic, lead, phthalates and cadmium in the products. One product had 600 times the exposure limit to cadmium, a toxic heavy metal that damages kidneys, bones and the respiratory system.
“There is a truly astounding prevalence of unsafe counterfeits showing up every minute of every day across even the most trusted e-commerce and social media platforms,” said Steve Lamar, the AAFA’s president and chief executive.
The AAFA, a trade organization in Washington, D.C. whose members include thousands of major clothing and footwear brands and their suppliers around the world, worked with Intertek, a quality assurance provider, to examine 47 counterfeit products. Of those, 17 failed to comply with U.S. product safety standards.
“With the rise of e-commerce, particularly during Covid, it gave counterfeiters a whole new route to promote and sell their products,” said Nate Herman, the AAFA’s senior vice president of policy. “So, we have seen an explosion of counterfeits online over the past two years.”
This is the first year the AAFA has tested counterfeit goods for dangerous chemicals. It was prompted by various reports by its members conducting their own analyses and anecdotal information.
All the hazardous chemicals found in the tested counterfeit products are part of the AAFA Restricted Substances List, which for more than 15 years has listed all banned and restricted chemicals and substances for finished apparel, footwear, accessories and home textile products. The list also offers an appendix on state laws required for reporting chemicals in children’s products as well as European reporting rules.
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“AAFA and our members are dedicated to protecting consumers, defending American intellectual property, building American jobs and safeguarding workers around the globe,” Lamar said. “Our members go above and beyond to protect the health and safety of our consumers by ensuring their products are safe. Counterfeits put all of that at risk, harming consumers, hurting companies and destroying jobs.”
For years, the AAFA has been battling counterfeit products that make their way into the U.S. through e-commerce sales or incorrectly labeled goods that get past customs.
In fiscal year 2020, U.S. Customs and Border Protection (CBP) reported seizing some 26,503 fake items with a street value of $1.3 billion. That was down from Fiscal 2019 when it apprehended 27,599 counterfeit products with a street value of $1.55 billion. The decline, sources said, does not reflect the fact that counterfeit goods appear to be increasing on e-commerce sites.
Nearly 80 percent of the counterfeit items in 2020 came from China and Hong Kong, the CBP said. Recently, Russia and Turkey have been more active in selling counterfeit merchandise, the AAFA said.
Apparel, accessories and watches made up more than half of the fake merchandise brought into the United States and seized in 2020. Handbags and wallets made up 17 percent of all seizures; wearing apparel and accessories accounted for 14 percent; watches and jewelry totaled 13 percent; and footwear covered another 13 percent.
In February, CBP officers in Memphis seized two shipments of counterfeit luxury goods coming from Mexico that included Louis Vuitton totes and purses worth $1 million if they had been sold as real items.
That seizure led officers to a counterfeit goods business run by a couple whose inventory comprised nearly $16 million in merchandise. The fake products included 59 Rolex watches, five Chanel sunglasses and one Louis Vuitton duffel bag.
In late 2019, U.S. Immigration and Customs Enforcement and local law enforcement searched various locations in the Los Angeles Jewelry District, recovering $15 million in counterfeit jewelry. The jewelry was tested at the scene and found to contain high levels of lead and cadmium.
Chemical crackdown
For years, the U.S. government has restricted the use of harmful chemicals in consumer products. Arsenic is carcinogenic and can cause adverse outcomes in pregnant women and their babies. Numerous studies have shown that arsenic exposure harms cognitive development, intelligence and memory.
Lead has been banned for years, though at one time was incorporated in paints used by artists and housepainters. There are no safe levels of exposure for children, whose intelligence, ability to pay attention and academic achievement might be affected. Phthalates are found to be endocrine disruptors that can adversely affect children’s health. The chemical is also linked to heart disease, early death and hormone disruption.
To combat the flood of fake items that are dangerous, the AAFA is supporting two bills that have been introduced in Congress. One is the SHOP Safe Act, which makes e-commerce platforms liable for infringement of a registered trademark by a third-party seller that flouts health and safety rules unless the platform takes certain actions. The bill includes an exemption for small businesses or individual sales.
The second bill is the INFORM Consumers Act, which would require online marketplaces to collect and verify basic seller information and for sellers to provide that information to consumers.
Both versions are being considered by the Senate. A conference committee will be named soon to combine the House and Senate versions of the bills into a final legislative package.