Introduction

Counterfeiting is an ongoing problem, but it is especially prevalent during the festive season. Unfortunately, South Africa's weakening economy may make 2017 a particularly bad year for consumers.

Despite the fact that many in South Africa are struggling financially, trends have shown that consumer spending is set to continue. As children add branded sneakers, luxury watches and mobile phones to their Christmas wish lists, parents often look for special deals on both the online and bricks-and-mortar markets.

However, consumers should bear in mind the saying "if a deal seems too good to be true, it probably is" and refrain from rushing to purchase items that are significantly cheaper than normal.

Counterfeiting

As online consumer confidence grows in South Africa, the online market is becoming an increasingly attractive space for counterfeiters and fraudsters. This is largely because they can remain anonymous and operate multiple websites with ease. Further, counterfeiters can take advantage of consumers who are new to online shopping and abuse their naivety. For example, a consumer may see an offer for an outfit and matching shoes for only R57, which can be delivered within one week. If the site looks legitimate, with payment being completed through a reputable payment service provider, the customer may proceed with the purchase. However, after receiving confirmation that the shipment has arrived, the consumer could receive another, much larger, bill for excise and duties.

Three kinds of duties are levied on imported goods:

  • customs duties;
  • anti-dumping duties; and
  • countervailing duties and value added tax (which is also collected on goods imported and cleared for home consumption).

This indicates the importance of reading the fine print and terms and conditions before ordering goods online.

How can brand owners protect themselves online?

Globally, there has been an increase in the trend of distributing counterfeit goods by courier and mail. This is primarily driven by the growing online market. These goods are available through market and auction sites and are extensively marketed and advertised through social media. Counterfeiters use legitimate pictures and, in some cases, clone the look and feel of the original brand's website. Most online channels provide mechanisms and complaint procedures where brand owners can report unauthorised use of their trademarks, which provide a quick and efficient remedy for removing infringing materials or taking down illicit sites.

How can consumers protect themselves online?

Take a stand Consumers should pledge to buy only legitimate branded goods. Because the supply of counterfeit goods is solely dependent on demand, consumers have full control over the demand for these products.

Spread the word Consumers should spread the word and encourage others to buy only legitimate products.

Do your homework In order to ensure authenticity and benefit from company warranties and guarantees, consumers should research and read reviews and buy legitimate products through licensed channels and official websites.

Name and shame Counterfeiters operate in syndicates with sophisticated communication networks. By sharing their bad online experiences with other consumers and brand holders, consumers can help to level the playing field.

Report it Apathy is one of the biggest threats to anti-counterfeiting initiatives. By taking a stand against counterfeiting, consumers can help to make a difference. Most major brands have complaint lines or reporting pages through which consumers can provide valuable information that can be used by stakeholders in the fight against counterfeiting. Further, consumers can anonymously report issues to the South Africa Police Service's cybercrime unit, which was specially formed to combat online crimes, such as fraud and counterfeiting. Dealing in counterfeit goods is a criminal office, punishable by:

  • a fine of up to R5000 per article and three years' imprisonment for the first conviction; and
  • a fine of up to R10,000 per article and five years' imprisonment for subsequent convictions.

Comment

Counterfeiting is a widespread issue with multiple victims. It not only affects consumers and brand owners, but can also weaken a country's economy and impact its ability to attract foreign investment. However, consumers have the antidote to counterfeiting and, as such, must make sure to use it.

For further information please contact Vanessa Ferguson at KISCH IP by telephone (+27 11 324 3000) or email (vanessaf@kisch-ip.com). The KISCH IP website can be accessed at www.kisch-ip.com.

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.