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Beware the counterfeit Christmas warns KPMG

Beware the counterfeit Christmas warns KPMG

£116 million of fake goods prosecuted in UK in last 2 years.

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James Maycock

Partner

KPMG in the UK

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Consumers are being warned to be on guard in the run up to Christmas as the number of large value fraud cases involving fake goods reaching court continues to rise, according to data from the KPMG Fraud Barometer.

The research found that a total of 39 cases involving more than £116 million of counterfeit and pirated goods have been prosecuted in the UK over the last two years, while those involving pirated digital media account for more than half of the total. Other popular counterfeited items include event tickets and branded goods such as fake football shirts, as consumers are seemingly driven by a hunger to maintain a designer lifestyle on a low key budget. These statistics are compounded by cases of bootleg tobacco and alcohol totalling almost £150 million in unpaid duty over the same time period.

Commenting on the rise of fraud cases going to court involving counterfeit items, James Maycock, Forensic Partner at KPMG said: 

“Counterfeit goods are a seductive way to an unhappy Christmas. Shoppers have to remember that even at Christmas if it feels too good to be true it usually is, and Boxing Day may be a painful experience when loved ones find their presents are not what they seem.

"They are widely available and, in many cases, are priced so that it is plain they are not the real thing. It may be a happy Christmas for the counterfeiter, but not for the shopper who is led astray - and a real loss to the brand owners.

Several cases appearing in court over the last two years involved consumers searching out goods and services on the internet that may have raised the eyebrows of the more conscientious customers. Products such as designer brand jeans, T-shirts, trainers, football shirts and DVDs can be imitated, and spotting a fake can require a closer look. Prices are usually discounted, and deciding if it is a good deal or a fake can be difficult. However, some bootleg bargains show customers can be unfazed by the risk of conspiring with the online fraudsters in order to get their hands on goods for a fraction of the high street price. 

James Maycock added:

“The retail industry in the UK is facing pressure on many fronts and the last thing retailers need is easier availability of heavily discounted counterfeit products. Consumers may often turn a blind eye, or consider this a victimless crime, but this shadow economy activity often directly promotes money laundering and tax evasion. It can also help to fund other more serious organised criminal enterprises, including human trafficking, drug smuggling and terrorism.”

Consumers should also consider the social risks and health costs that purchasing counterfeit products and the counterfeiters create. One case saw a father and son jailed for a £3m scam selling cheap teeth whitening kits that were dangerous and left some users with bleeding gums from chemical burns. Advertising banners claimed the product was “ideal for any age group” and was “used by leading dentists throughout the UK and Europe”. However, they contained up to 110 times the allowable level of hydrogen peroxide.

James Maycock concluded:

“While counterfeit products may be enticing, particularly in uncertain economic times, consumers really need to be aware of the risks. Counterfeit items, particularly items such as perfumes, batteries, alcohol, tobacco and electronic goods may seriously damage your health.  Therefore ‘Buyer beware’ should be firmly in the mind of any tempted consumer.”

ENDS

For media enquiries, please contact:

Emma Murray, KPMG Corporate Communications

T: 020 7694 6506 E: emma.murray@kpmg.co.uk 

KPMG Press Office: T: +44 (0) 207 694 8773

 

About KPMG

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 14,500 partners and staff.  The UK firm recorded a revenue of £2.2 billion in the year ended 30 September 2017. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 152 countries and has 189,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  Each KPMG firm is a legally distinct and separate entity and describes itself as such.

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