The best defence against growing counterfeit trade is a vigilant consumer, writes Magda Shahin* Pharmaceutical drugs that can cause death or health-related risks; shampoo that can make your hair fall out; electric products that can start fires; sunglasses that could harm your vision; baby formula without nutritional value: these are but a few damaging examples of brand fraud and counterfeit goods that consumers increasingly face in the world of today. Strangely enough, only a few years ago such pirated goods were dismissed as of no consequence in developing and developed countries alike. Authorities, notably in developing countries, focussed limited police resources on major crimes rather than counterfeit goods. Today, the growing counterfeit economy can no longer be overlooked. Its consequences range from health and safety risks, damage to business reputations, and harm to the economy at large in terms of job losses, lower investment, less transfer of technology, less innovation and research and development. Convinced that addressing these emergent threats is mutually beneficial to consumers and businesses, the Trade-Related Assistance Centre (TRAC) at the American Chamber of Commerce, in collaboration with the Consumer Protection Agency (CPA), recently hosted a major conference entitled, "Identity Theft, Consumer and Brand Fraud: You are Targeted". Gathering stakeholders in the detection and prevention of consumer fraud and identity theft in the Egyptian market, the conference was inaugurated by Minister of Trade and Industry Rachid Mohamed Rachid. At over eight per cent of world trade, the production of counterfeit goods has become a major industry, its profit-making potential defying imagination. While heroin could pull in profits of up to 400 per cent, albeit with high risk, pirated DVDs, music, films and business software generate a staggering 800 per cent in profit returns with only a fraction of the risks. With the affordability of counterfeit goods, demand continues to grow. China, the newly dominating world trading power, accounts for more than 85 per cent of all counterfeit goods entering the US and the EU. Fraud awareness needs to go hand-in-hand with incentives in order to entice consumers into not buying or handling counterfeit goods. Egypt, with its 80 million people and its successful efforts to become part of the new electronic marketplace, is an attractive destination for counterfeit trade, and also increased domestic counterfeit goods production. With the Internet, mobile phones and credit cards, criminal activities have become more sophisticated, much easier to commit and much harder to detect. Technological advancement comes with its drawbacks. It has created fertile ground for identity theft, a crime to which consumers may fall victim without even realising until the damage is done. Identity theft ranges from financial fraud to concealment of true identity and has become the fastest growing crime in the US with 10 million victims in 2008, an increase of 22 per cent over 2007. It is critical to raise awareness in Egypt concerning the dangers associated with consumer fraud and identity theft so that individuals, businesses and the government take the necessary precautions to safeguard the benefits of open markets and technological progress while avoiding their pitfalls. While an increasingly aware and informed consumer is the first line of defence against fraud and theft, collective efforts between the government, business and civil society are imperative. Action should be dynamic and constantly reassessed. At best, actions should be pre-emptive and anticipatory, but in view of the constant innovative schemes of fraudsters they should also be reactive. The simplest action can be the most effective. Governments need to be engaged through their agencies, communities through their NGOs, and businesses have to be active, diligent and fast reacting. Companies have to encourage direct contact with the consumer through hotlines so that they will come forward with complaints or present counterfeit claims. Companies as well as banks should constantly be on their guard and modernise their technology and equipment for the detection and prevention of fraud and theft. As for governments, it is incumbent upon them to establish a solid base of well-trained customs officers fully cognizant of their responsibilities in preventing and undercutting attempts to place pirated and counterfeit goods in the market. In addition, they should create units to counter cyber-crime and to confront spam e-mail. Consumers -- as the first and last line of defence -- should watch for and shield themselves from all forms of fraud and identity theft. It is in their own interest to say no to counterfeit goods for the sake of their health and safety. Simple but effective actions are imperative. To state but a few: - Avoid throwing bank statements in the trash in order to hinder fraudsters from benefiting from the information such documents contain. Shred all such documents instead. - Recognise and do not succumb to red flag claims -- for example, advertising for pills to cure cancer, or to help with weight loss in a few days, or other such claims. - Disregard "phishing" e-mails that are pure attempts to trick recipients into revealing confidential financial or other valuable information. These include e-mails purporting to offer prizes or a share in vast monies collected by former dictators, etc. - Disregard pre-texting, which are similar to "phishing" e- mails, but come via convincing phone calls where the fraudster could acquire all kinds of information. Increasing consumer protection preserves consumer choice, helps fight deception, informs and educates consumers, while promoting confidence in the open market. Immediate action -- and swift reaction -- is thus imperative at all levels of society in order to effectively counter the growing phenomenon of fraudulent practices and to mitigate the harm done to consumers, society and the economy as a whole. * The writer is director of Trade Related Assistance Centre of the American Chamber of Commerce (AmCham).
