Western companies looking to combat counterfeit goods in China have come up against a new problem. The Associated Press has reported that private investigators hired by firms have been caught manufacturing their own fake products.
According to the Associated Press, private investigators are often paid on commission. The more fake products they seize, the more they get paid. In several instances, investigators were themselves manufacturing counterfeit versions of their clients products.
An unnamed consumer goods company was said to have hired one such investigator, Wang Yunming, to seize counterfeit anti-dandruff shampoo. Wang was convicted of fraud after setting up a factory, producing his own counterfeit shampoo and “seizing” it before presenting it to the company and billing for his work.
Other companies targeted by similar scams including Swiss power technology company Asea Brown Boveri.
Shanghai’s Public Security Bureau has since warned foreign brands to be careful when appointing private investigators. The bureau told the Associated Press: “We very much hope that brand owners will pay attention and devote more manpower and material resources to ensure that the fight against counterfeiting is healthy and orderly.”
Counterfeiting has flourished in China, despite renewed efforts to combat the practice in the region. Nine out of ten fakes seized at US borders are said to have been manufactured in China. However, Chinese authorities are said to be getting better at fining counterfeiters.
