If What You Are Buying Is Counterfeit, It Isn’t a Good Deal

Counterfeiting is a conundrum for manufacturers, retailers, and consumers.

Colorful handbags and purses in a shop
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[Read: How to Stock Your Kitchen Without Blowing Your Budget.]

In your medicine cabinet. Quack doctors have done harm to patients for centuries, but we expect better of the 21st century. Unfortunately, the criminal underworld is actively marketing counterfeit drugs and doing its best to undermine physicians and patients. In fact, earlier this month, the Federal Drug Administration (FDA) issued a warning that a doppelganger drug of Altuzan was once again being shipped into the United States. Last year, the fake drug is believed to have made its way into 19 medical practices. The counterfeit drug has no active ingredient, a heinous trick since it's a cancer medicine. The drug also sells for $2,500 per 400mg, making it a windfall for crooks and financially devastating for victims, who already have enough problems.

As it is, Altuzan hasn't been approved by the FDA—it's an approved drug in Turkey—so no cancer patient should be using it in the United States. But one can envision how a desperate patient might find an off-the-radar channel where they could buy it.

"You never know what you're going to get when you try and buy pharmaceuticals from anywhere that isn't accredited," says Jim Milford, senior vice president at Andrews International, a firm headquartered in Los Angeles that specializes in security and risk mitigation services. "There's no oversight from anybody, so you could be taking something that has arsenic in it, or sugar. You could be taking an aspirin."

Your computer. If not the computer itself, are you sure about the memory or the speakers you recently purchased? In 2010, the National Electronics Distributors Association estimated that fake computers, microchips, routers, and other accessories cost the U.S. economy $100 billion in lost revenue.

"Fake recyclers hold collecting events under the pretense of saving the environment, and then they'll ship these computers to developing countries, where they're bathed in acid and burned, leaving a trail of toxic waste, and then the parts that are usable are sold to networks and ultimately often make their way back to the United States," says Kyle Marks, CEO of Retire-IT, a Columbus, Ohio-based company that recycles computer equipment.

Marks says counterfeit computer software is also something consumers need to be on the lookout for.

Once again, it's a good idea to use established brands as your guiding light. Marks says that if you're going to buy, say, a refurbished personal computer, if the seller is a Microsoft Registered Refurbisher or a Microsoft Authorized Refurbisher, that's a good sign you're not dealing with a company buying counterfeit goods. He also says that if there's a warranty with a refurbished computer, if something does go wrong due to a counterfeit component, at least the consumer is protected.

What's the harm? One could make the argument that if you own a knockoff purse and are listening to music on a counterfeit MP3, and the purse and MP3 are working, what's the problem, really?

Tom Taylor can cite a number of them. Taylor is the president of Brand Protection for OpSec Security, an international company that handles online and physical anti-counterfeiting solutions for a variety of well-known corporations, including the NFL, Major League Baseball, and GM Europe.

He says counterfeit goods cost governments throughout the world billions of dollars in taxes and throw a lot of people out of work. It's been estimated that 2.5 million jobs have been lost in the United States due to counterfeit products (without them, there would be more orders for the real things). Then there's the fairness issue to the businesses that spent all the money on their research and development, building prototypes and marketing their products.

"Copying a product is flat-out stealing and just wrong—the bad guys are bad guys," Taylor says, observing another dilemma: "When you buy a counterfeit product, you're often helping to fund organized crime."