Congress Should Tackle Chinese Counterfeit, Stolen Goods

Billions in Chinese Counterfeit Goods Flooding Marketplaces

With news that Congress is likely to proceed on a slimmed down version of the China Competition bill, commonly known as USICA, retailers urged lawmakers not to ditch the INFORM Consumers Act, common-sense online transparency legislation that would protect consumers from billions in counterfeit product coming from China and marketed on Amazon and other online marketplaces as legitimate products. 

“The INFORM Consumers Act is a golden opportunity to not only address our economic challenges with China and the flood of counterfeits flooding Amazon and other marketplaces, but a chance to protect consumers from the harm many of these goods can cause when they are unwittingly purchased by American consumers,” said RILA Senior Executive Vice President for Public Affairs Michael Hanson. 

In the latest example of how pervasive the problem has become, this month the Department of Justice announced charges against a Florida man who ran 15 storefronts on Amazon’s third-party marketplace that sold tens of thousands of fraudulent Cisco devices from China and Hong Kong. Unsuspecting customers were duped into believing the products were legitimate, and the operation amassed over $100 million in revenue.

According to the DOJ release:

“The fraudulent and counterfeit products sold by the Pro Network Entities suffered from numerous performance, functionality, and safety problems. Often, they would simply fail or otherwise malfunction, causing significant damage to their users’ networks and operations. Customers of Aksoy’s fraudulent and counterfeit devices included hospitals, schools, government agencies, and the military.”

Hanson and leading retail CEOs have urged Congress to pass the INFORM Consumers Act, which would require online marketplaces to more thoroughly vet sellers, and provide more information to consumers about who is selling products on their platform.  Transparency would make it harder to sell counterfeit products from behind screennames and bogus business accounts, and it would make it harder to use these same platforms to sell stolen goods.

The problem of organized retail crime has grown significantly in recent years along with counterfeits, and their prevalence on marketplaces like Amazon has caught the attention of law enforcement.  Homeland Security Investigations recently released a report tying the proceeds of organized retail crime to more sophisticated and violent criminal schemes:

“Organized retail crime is leading to more brazen, more violent attacks in retail stores throughout the country and many of the criminal rings orchestrating these thefts are also involved in other serious criminal activity,” said HSI’s acting executive associate director Steve Francis. “Tackling this growing threat is important to the safety of store employees, customers, and communities across the country.”
“We know that criminal enterprises are setting up anonymous accounts on leading third-party marketplaces and selling dangerous, fraudulent and stolen products,” said Hanson.  “It’s why we need our laws to evolve to address the growing problem of Chinese counterfeits and stolen goods marketed on Amazon and other marketplaces as legitimate products to unsuspecting customers. 

“Congress should not miss the chance to tackle both of these challenges by including INFORM in any economic competition package heading to the President’s desk,” added Hanson.  “Delay just means more organized criminal activity, more attacks on retail employees, and more dangerous counterfeit goods sold to unsuspecting American families. 
  • Asset Protection
  • Keeping Communities Safe
  • Organized Retail Crime
  • Public Policy

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