The counterfeit economy: How can brands stop product fraudsters?

    The fight to catch counterfeiters intensifies as online sales of fakes boom, says Glenn Jones of HP Inc’s Anticounterfeit and Fraud (ACF) Programme.


    What do you do when millions of dollars and thousands of hours invested into creating a product are undermined by cheaper counterfeit imitations in the marketplace? If criminals make illegal copies of your product, there is, of course, the immediate worry of lost revenue. But there’s also a potentially more serious issue of lost consumer trust if people think they’re buying the real deal and that product malfunctions. 

    The implications of counterfeit goods are more prevalent than you might think. According to a 2019 report from the Organisation for Economic Co-operation and Development, trade in counterfeit and pirated goods stands at 3.3% of global trade. The value of imported fake goods worldwide is $509 billion. Since these figures were released, the limited access to physical shops during COVID lockdowns drove the whole world to rely upon online shopping to a greater extent than previously seen. And it wasn’t just brands that pivoted to e-commerce; crooks moved online too. 

    Online sales grant criminals a cloak of anonymity that has helped to sell fake products and pass them off as genuine. With physical retail, consumers are more able to identify counterfeit goods at the point of sale, and those selling the products are accountable for the items they sell. It is far easier for criminals to shroud their activity and identity online to gain access to global markets. Brands such as HP that manufacture print cartridges for sale worldwide therefore have to act fast to stop the spread of counterfeit goods – online, offline, everywhere. 

    For criminals, the biggest profit margins have always been in the commercial market. However, they’re keeping an eye on the consumer market too. Bad actors prey on the fact that consumers like a discount – a fact that is truer now more than ever, with the cost-of-living crisis forcing people to look for deals on every item they buy. Often, they are duped into buying fake products believing them to be genuine. 

    E-commerce prompts new approaches

    For HP, our means of investigating counterfeit goods would traditionally involve investigating the commercial and retail supply chain starting from physical premises. That would enable us to follow the trail from stores to a distributor and then upstream to a manufacturer. And indeed, our investigations have been successful; between November 2020 and October 2021, HP seized 3.5 million fraudulent print products – including finished goods and component parts – in circulation in EMEA, Asia-Pacific and the Americas. 

    With the increasing move to e-commerce, we require a broader set of tools, approaches and partners. A large proportion of counterfeit print products are sold in online marketplaces, and HP has been working with these platforms, as well as other third-party organisations, to help spot fake goods, remove the products from sale and find their source. 

    For example, we carry out virtual Customer Delivery Inspections (CDIs) and Channel Partner Protection Audits (CPPAs). Some 1,191 CPPAs were conducted in FY21 alone – an increase of 11% on FY20. Virtual inspections and audits supported the HP ACF team in identifying and delisting over 224,000 illegitimate HP online offers globally. HP has increased the number of online delistings by 19% year on year. 

    We also continue to use dynamic security, which ensures chips within products are kept updated with information that can help customers verify their authenticity. 

    Why it matters

    Cracking down on counterfeit products requires cooperation with various parties because a coordinated effort reaps the biggest rewards. When all parties work together successfully, good things happen – and it’s in all our interests to stop the use of fraudulent print supplies. For example, when everyone uses genuine print products rather than fraudulent ones, their printers work to the highest standards. An added benefit is that the limited warranty of printers is not invalidated by using consumables not designed for them. 

    There are bigger issues too: criminal businesses don’t prioritise the working conditions and well-being of workers. Buying genuine products is a significant way of standing with workers all over the world and ensuring that employees are not exploited out of their right to benefits or safe conditions. 

    Purchasing genuine products also demonstrates a commitment to the environment. HP has produced more than 3.9 billion Original HP ink and toner cartridges that contain recycled plastic. Today, more than 80% of Original HP ink cartridges and 100% of Original HP toner cartridges are manufactured with recycled content. Through HP Planet Partners, the company’s return and recycling programme, HP has recycled more than 875 million cartridges since the initiative began nearly 30 years ago, and has expanded it to 68 countries. 

    We’re doing everything we can to stop production of fake goods at the source, but we’re also educating consumers about the importance of finding and reporting fraudulent products. It is all our responsibilities – from manufacturers all the way through to consumers – to not enable the cycle of counterfeit products and exploitative criminal activities. We ask all HP customers to check the holographic security label on their product box, scan the QR code to check if it’s a genuine – and report if it’s a fake.