According to Paradise (1999), “product counterfeiting is a form of consumer fraud: a product is sold, intended to be something that it is not. This is different from the crime of copyright violation, which involves the unauthorized transfer of licensed material, such as the sharing of music or video files electronically. It is a product counterfeiting is typically an organized group activity, because the manufacturing of goods takes people and time, and the goal is invariably profit. As a result, most product counterfeiting would be considered organized crime under the convention.”

Many organizations are still trying to determine the range and scale of this forgery problematic and more significantly, determine how it can affect them. In reality, imitation has being globally pervasive, since it’s starting it has only increased every year. Â

Could outsourcing be increasing this type of practice?

Developed countries are in charge for the creation, innovation, advertising and design of the product while the actual manufacturing of the good takes places in countries like China, India, Indonesia, Estonia and Singapore just to mention some, these countries have a very productive and inexpensive labor.

These developing countries have generally a low per capita income, in other words are considered poor, and have a lower capacity for oversight. This same lack of supervisory capability is what makes illegal manufacture possible.

Products in high demand can be mass-produced based on the similar or identical designs, often packed and branded in such way that makes it look like a duplicate. Sometimes it is impossible for a buyer to distinguish one from the other. Even the fake goods can then are sold through equivalent markets, or even penetrate the legal supply chain with lower prices which makes the counterfeit product to ultimately prevail. Without the additional costs of the legitimate goods, these forgeries can be priced exceptionally low while remaining much more lucrative. Due to this economical advantage, in some markets in some parts of the world, forged goods are far more available and common than the real one.

Effect of counterfeiting on consumer

Counterfeit products are often unsafe goods. Counterfeit toy manufacturers need do not pay attention to any type of choking hazards, paint poisonousness, the small parts rules which can be dangerous for babies, flammability of hard and soft parts, flammability of clothing textile, they do not have standards for stuffing cleanliness. False automobile parts are not exposed to the demanding safety testing, so pretty much anything can happen. These auto parts can bring serious consequences ranging from defective parts not fitting, parts not performing as expected, which can cause accidents and/or ensure expensive repairs at the end of the road. Due to inexpensive constituents and workmanship, fake batteries and lighters have a high chance to explode.