High-priced Fake Items Polluting Online Shopping Malls

High-priced Fake Items Polluting Online Shopping Malls. October. 22, 2009 07:31. fineday@donga.com nuk@donga.com.

Customs officials yesterday said counterfeit brand name goods have been sold as authentic on Internet shopping malls after passing through customs undetected.

The Incheon Customs Service said, “We found importers and merchandisers that sold fake Polo Ralph Lauren T-shirts by forging the certificate of authenticity, and reported them to prosecutors on the charge of trademark violation.”

○ Fabricated documents

Customs was informed early last month by the U.S. Embassy in Seoul that Polo T-shirts were being sold at unreasonably low prices on a large Web mall. A customs investigation found that the sellers were a 60-something man in Seoul and his 36-year-old son who lives in the U.S.

The two sold 1,000 fake Polos through the mall over the past year. The son disguised fake goods manufactured in Southeast Asia as authentic and brought them to Korea.

A customs official said, “It is impossible to inspect all products at customs clearance, so we only select five percent of them for inspection. We check only the customs documents for the rest, so as long as we have the official document, it`s difficult to tell between fake and authentic goods.”

Another importer allegedly brought 10,000 fake Polos into Korea by forging an order request form from Polo Ralph Lauren headquarters and a certificate of authenticity issued by an American law firm in July last year. He sold 6,000 shirts in the Seoul wholesale market of Dongdaemun and 3,000 to online shopping malls, saying they were authentic.

He was caught at Incheon International Airport customs in June. His shirts were belatedly found to be fake after being sold as authentic on the online shopping mall One a Day.

The mall immediately notified its customers and is working on paying damages. One a Day CEO Lee Jun-hee said, “In the beginning, we promised our customers to pay twice the original price if a purchased product turned out to be fake, but we paid three times to keep their trust. We can hardly expect customers to be able to tell authentic goods from fakes when even experts like us get fooled. This incident has cost us 100 million won (85,000 U.S. dollars).”

○ Open markets not taking enough responsibility

According to parliamentary audit material submitted by the Korea Intellectual Property Office to ruling Grand National Party lawmaker Kim Jung-hoon, sales of fake goods by the top four online open markets -- Gmarket, Auction, 11st, and Interpark -- reached 8.51 billion won (7.2 million dollars) last year. Customers who purchased such goods, however, were not properly compensated.

Open markets that directly link individual sellers to customers take no more responsibility than that of a brokerage. For example, Auction, as with all of its other competitors, says on its home page, "Products sold at the site are registered by individual sellers, and not by e-Bay Auction, which only provides an intermediary system and takes no responsibility for the registered products or their details."

An official at the electronic commerce team at the Fair Trade Commission official said, “Article 20 of the Electronic Commerce Act states that open markets are exempt as long as they notify their customers of this fact in advance. Therefore, we are pushing for a revision to this law, which does not require open markets to take sufficient responsibility.”

The infiltration of fake goods is not confined to online shopping malls. Those going undetected at customs even make it to the shelves at offline stores.

There is no way of telling the authenticity of used goods with no tags. Jeong Eun-gyeong (not her real name, 36) bought a luxury brand bag for 1.9 million won (1,600 dollars) at a used luxury goods store in Seoul`s Gangnam district.

“I thought I knew how to tell fakes from authentic goods and I believed the store owner would know how, too," she said. "But the bag I bought turned out to be very fluffy so I questioned its authenticity. When I brought the bag to the store, I was surprised when the store owner said she bought it from a Web site where used goods are traded.”

Lee Jae-gil, legal affairs chief at the Korean Apparel Industry Association, said, “Since it`s difficult for the average customer to determine authenticity, I advise purchasing products from merchandisers with official sales approval from brand name makers and question their authenticity if anyone offers them at 20 to 30 percent below the normal price.”