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“Lives being placed at risk as counterfeiting flourishes in COVID crisis” warns IHMA

16 September 2020

THE DANGERS of buying fake products online during COVID-19 have been stressed in a new report issued by the International Hologram Manufacturers Association (IHMA), wherein the organisation voices strong concerns about e-commerce-based businesses being targets for exploitation during the pandemic by unscrupulous counterfeiters looking to cash in on the trade in illicit goods.

Among other consumer goods, haircare brands, cosmetics and skincare tools have been hit particularly hard, with one brand protection agency alone reporting a 56% increase in counterfeit products sold online across 700 brand clients in the first six months of this year.

Skincare device company Foreo and haircare brand Tyme have seen counterfeit sales increase by approximately 37% according to published reports.

Counterfeit products continue to flood the market. It’s an issue that has been exacerbated by the growth of e-commerce channels. The counterfeit market currently forms somewhere between 5% and 7% of global trade and, despite strong efforts from businesses, continues to seriously harm brands while customers are duped in the process.

The World Health Organisation has said that a growing volume of fake medicines are on sale in developing countries, while Interpol has witnessed an increase in fake medical products. Seizures of fake COVID-19 testing solutions and PPE have also been reported by both the US CBP and the World Customs Organisation.

In the USA, research earlier this year revealed that almost 70% of consumers have expressed worries about the health crisis driving online sales in counterfeit or sub-standard quality products. 

Multibillion-dollar problem

Counterfeiting is a multibillion-dollar global problem, asserts the IHMA, but the crisis has added to the situation. Specifically, counterfeiters are taking advantage of the pandemic to market and distribute fake essentials, spurred on by increased demand and a perceived shortage of basic goods.

Fake goods which are sold online or have a vague provenance can threaten people’s lives as well as damage corporate reputations and investment in companies and their products. On that basis, the IHMA is again urging brand owners and product manufacturers to be vigilant and review how they tackle the threats, even bringing forward plans for investment in authentication and verification technologies to protect brands, profits and reputation.

A recent IHMA poll revealed that almost 50% of manufacturers and suppliers of holograms had seen an increase in demand from customers, specifiers and end users for devices and technologies during the height of the pandemic.

Global supply channels

Dr Paul Dunn, chair of the IHMA, told Security Matters: “COVID has opened the door pretty widely for crafty criminals who are infiltrating global supply channels then deploying scams and counterfeiting measures to trick consumers and damage manufacturers. Furthermore, items such as falsified medicines and drugs bought online pose a terrible threat and can endanger lives.”

Dunn added: “Holograms can be effective in the front line fight against counterfeiters and fraudsters, protecting brands and profits. Those involved in the supply chain are reassured by their presence on products, duly recognising the security and financial benefits provided.”

The use of well-designed and properly deployed authentication solutions, as advocated by ISO 12931, enables examiners to verify the authenticity of a legitimate product, differentiating it from fake products coming from counterfeiting ‘hot spots’ in regions like Asia and eastern Europe. Even those that carry a ‘fake’ authentication feature can be distinguished from the genuine item if that item carries a carefully thought-out authentication solution.