A combined prison sentence of 15 months; a quarter of a million hit to the legitimate supply chain; impending health and safety risks; the threat of trading copyright infringement and Trading Standards on the alert. The answer to the question is clearly no. The case of Martin Miller and Neel Parmer in York Crown Court last week has highlighted the problem of counterfeit prizes once again. Coinslot brought together a number of people from the supply, arcade and trade body sectors to discuss the ramifications.
Coinslot: It was a classic line from the solicitor at the court case last week who said that Martin Miller had “made a series of poor decisions he has regretted.” And seven years is a hefty sentence, so how many other counterfeit traders are out there at the moment?
Independent supplier: I’m sure there’s plenty of rogue sellers in every industry – we all like a bargain. But it comes at a price, so we can only assume there will be many out there.
International prize supplier: I agree, there are many others. And it’s a cat and mouse game for Trading Standards to catch up with them.
However, as the case in question demonstrates, they will always catch up with them in the end and the consequences are huge and sometimes devastating.
Coinslot: I suppose we have to ask the uncomfortable question as to whether people in the industry knew about this and whether there were options open to them to raise the alarm?
Amusements operator: Over the years there have always been individual suppliers that have supplied goods that were known to be counterfeit. These tended to be sole traders.
And, did operators know? Well, there would have been some operators buying them who definitely would have wondered whether the goods were genuine or not.
Independent supplier: I don’t disagree with that and it was definitely the case in the past. But even I have real difficulty working out what is what now.
People will buy anything, especially if it’s the latest trend, but I think you have to apply the golden rule: the main thing to look at is if it’s cheap, then it may not be what you expect.
International prize supplier: That’s so true, and the signs are there. Check if the invoices simply say “toy” or a similar generic description. The counterfeiters never detail the actual description of the product, because if Trading Standards come calling, the supplier will simply deny the goods were supplied by them.
Amusements operator: For an operator that’s where the problem arises. The onus is then on us and then it’s our responsibility with all the legal ramifications that involves.
International prize supplier: That’s where it hurts. Customers really don’t seem to understand the risks they are taking when making a decision to buy “questionable” products.
They are leaving themselves open to all kinds of potential legal consequences, some of which could literally push them into bankruptcy.
Coinslot: Are you serious? That’s a bit heavy, isn’t it?
International prize supplier: I’d like to say yes, but it goes without saying that 99.9 percent of counterfeit products have not been tested and will almost certainly fail any relevant toy regulations.
And then there’s trademark infringement which is a criminal offence and once convicted, the Courts will apply a Proceeds of Crime order against the company or individual involved, meaning they will have to “prove” to the Courts that any assets you own have been acquired by legitimate means.
In the worst case that could entail forensic accountants pouring over years of records and additionally, because it’s criminal activity involved, the Courts won’t allow individuals to hide behind a Limited Company and can look to recover personal assets too. The Proceeds of Crime Act is a draconian law designed to make people ask th emselves is it really worth the risk!
Is it really worth the risk just to save 10p on some fake Disney key-chains?
Coinslot: Well that’s a sobering message, especially for an innocent operator that’s just been stung?
Arcade operator: Ask for a test certificate. That’s the easiest way for a customer to check if a product is genuine or not: request a copy of a test certificate.
Nobody selling counterfeit products will be able to provide that as it’s an indisputable link straight back to the supplier of the goods.
International prize supplier: Absolutely. And we need to be on our guard. Trading Standards’ primary role is product safety and compliance but we have seen them target more and more amusement establishments recently as it has now become almost impossible to sell counterfeit goods in the retail sector.
Coinslot: The back of a fag packet estimates of this particular scam is around £250,000. If we’ve used a packet of cigarettes smuggled in through customs, then the real figure might be even more. So is there a better and more effective way of tackling this problem?
Amusements operator: I hope so. If you contact Trading Standards every time you bought something, you would have no stock. So we have to find a better way to protect ourselves.
International prize supplier: That’s definitely the case. But this is a tough one to solve and it will get tougher.
We just need to remember, especially now as shipping prices rise and we get tempted to search for cheaper goods, simply assuming you can pass responsibility back to the supplier if questioned is not as easy as we think.
Trading standards are increasingly expecting the retailer to take responsibility for the goods they are selling…in fact, it’s a legal requirement that they do so.
Coinslot: John at Bacta, you’ve been listening to this. It’s not a happy tale. Is there anything Bacta can do?
John White: It is a serious concern. Counterfeit goods are potentially a risk to life. A child could swallow any easily detached part of a prize say and choke to death.
Operators must always ask themselves whether what they buy is coming from a legitimate source. If something is surprisingly cheap, there is a usually a reason for it. You must get all the proper documentation and certification to back up any purchase.
Whilst Bacta cannot legally be one of the interested parties in any counterfeit case we can provide help and assistance to trading standards should they need it. I recall doing something along these lines back in the 90’s.
We also are very alive to potential counterfeit goods at EAG and have, and will have, no hesitation in shutting a stand down if there are counterfeit goods on sale.
Not only are these goods a health hazard, the reputational damage to the industry if there was a death or injury would be catastrophic.