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home > In The Media > Managing the Risk to your Brand
Neil Miller, director ay Commercial Security International Ltd, highlights some of the major risks that online “auction” sales of counterfeit products have to your brand name, image and reputation and how the use of new technology can assist in fighting back.
Been on eBay recently? Did you see the counterfeit Mini Cooper for sale? This particular entry may have been a friendly hoax to grab your attention whilst online, but for those risk managers and brand protection officers representing luxury brands, services and retail products, similar entries only highlight the amount of counterfeit and stolen goods being sold online. It is a real problem. Counterfeiting Risks Faced: The existence of these counterfeit products becoming available online can cause a devastating decrease in the demand for your genuine product. They are often misrepresented and unsuspecting customers have no guarantee that the products they are buying are genuine and have not been interfered with. The counterfeiting of trade marked and copyrighted products:
Genuine? Definitely ... Maybe: It has never been easier to access the Internet and browse for hours on specific online auction sites such as eBay.co.uk, auctions.amazon.com, bid.com etc. The chances are if you have visited such a site, then you would have probably entered the search terms “Rolex Watch” or “Prada Handbag” just to see if you could pick up a bargain, an unwanted Christmas present or shop reduced goods. Well, most of the time you do get a genuine bargain, however, have you ever noticed the descriptive terms “100% Genuine” or “100% Authentic”? Being the cynic I am, and the investigative background I come from, these bid descriptions generally mean the opposite. Take a look at some of these descriptions:
Armchair Terrorism ... Click Away: It is believed that eBay, for example, has 94.9 million users, 9 million of whom are registered in the UK and any given day, there are millions of items across thousands of categories for sale on eBay. At any one time, eBay estimates there are 1 million items alone for sale from UK sellers. Put all this into context and in terms of assessing the risk to your brand, reputation, market share, and overall loss in potential revenue then I believe you have a massive problem, especially as these goods can be sold online, at anytime and anywhere. Although many of these online auction sites have investigation teams, clearly, among these vast numbers counterfeiters, criminal networks and fraudsters find it easy to avoid detection. So, ask yourself the question, is the money generated by online counterfeit sales funding terrorist activities? 100% Authentic Research: The following are just a typical selection of our conversations with brand owners, brand protection officers, investigators and consumers:
It would appear that end online customers have fewer rights if they are buying from a private seller as the items would only have to be as described by the seller, but they might not be required by law to be of satisfactory quality. Are there enough Hours in the day? Most investigators and brand protection officers, dare I say it, have a life and deserve the weekends to themselves. However, did you realize that most illicit sales of counterfeit, stolen and grey market goods are placed on eBay at 6.30pm on a Friday night and illegally sold for a profit, before the brand protection officers come back to work at 9am Monday morning. Technology versus Technology: So how can technology play a part in the combat of illicit auction postings?
CSi has developed an online interactive and investigative software tool specifically designed to protect your brand and corporate image. WatchDog has been designed to monitor any brand, at any time, on a variety of online auction sites and with client input and consultation, allows the software to automatically identify potential counterfeit goods. Monitoring Online Sales Sites: Every time a target brand is advertised for sale on specific auction and sales sites, WatchDog evidentially collects; caches and logs all of the information. It will monitor the activities of the participants, the amount of brands and items for sale, frequency of their sales, quantify the costs and losses of the sales and ascertain who is purchasing the items. WatchDog monitors these e-retail sites 24/7, 365 days a year and captures all users, patterns and trends relating to trade mark abuse and other intellectual property infringements that most trained investigators are not able to pick up, due to lack of resources and time available. The technology automatically interrogates your brand listing descriptions, compares them to a number of similar items the seller has advertised, determines whether they are known to be counterfeit traders and then grades the probability of the brand listing as being counterfeit accordingly. Once it has been established that the product is counterfeit by the brand protection officer, then action should be taken. Take action to protect your brand: This package can automate the legal procedure to take listings down in order to protect your brand. WatchDog can automatically, though your legal department, contact the trade merchants and sellers, warning them of possible trademark abuse and other Intellectual Property infringements and even send “Cease and Desist” notices to the offenders. Analyse Historical Data: WatchDog stores all the data, evidence and intelligence for as long as the client requires it, allowing the client to assess the performance of its brand protection programme. This reporting function will highlight trends to inform you of when and where your brand is most susceptible to unethical behaviour. Conclusions: Product counterfeiting not only impacts our national economy, our security, consumer health and safety, it also deprives legitimate owners of revenue, reputation and consumer loyalty. Those involved in the sales of counterfeit products on these online sites may seem harmless enough and probably not linked directly to terrorist organizations. But when a counterfeit is sold on eBay, consumers have no way of knowing who originally manufactured the product, where there money eventually goes or what it supports. It looks like online auction sites will continue to be big business, however, what ever investigative tools that are provided to prevent such illegal activity, there will always be new ways in which markets will open up for opportunists, infringement and fraudulent activity. Our overall technology and awareness aims are to:
About CSi Neil Miller is a director of Commercial Security International Ltd, which has a wealth of experience when it comes to conducting, managing and delivering results in the investigation of all forms of commercial crime especially towards the theft, or abuse of Intellectual Property and illicit gain through:
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