The rapid growth of online shopping has powered a platform for unauthorized dealers to sell stolen and counterfeit goods. Plumbing fixtures and fittings — especially luxury fixtures — have been attracting scam artists and a host of online marketers all too happy to deliver knock-off, unauthorized or noncompliant products. They often make brazen claims of being an authorized distributor or dealer.

A Forbes article reports that global annual counterfeit goods sales total anywhere between $1.7 trillion and $4.5 trillion; U.S. businesses and customers are hit the hardest. American shoppers are estimated to buy 60 percent to 80 percent of all counterfeit products sold worldwide, Forbes says.

While counterfeiting negatively affects a business’s bottom line, it also can erode customers’ trust in a company or brand. Imagine a homeowner excited about a bathroom remodel who buys online what she thinks is a high-end faucet from a well-known brand, only to discover months later that the faucet is counterfeit and defective. 

Counterfeit plumbing products and components can pose health and safety risks to customers who unknowingly purchase them. Counterfeit products also undermine the North American system of codes, standards, testing and certifications put in place to protect customers’ health and safety.

INFORM Directs Online Marketplaces to Verify Sellers

A new law to help curb online criminal activity couldn’t have come at a better time. The INFORM Consumers Act — the bipartisan legislation that stands for Integrity, Notification and Fairness in Online Retail Marketplaces — went into effect on June 27. Supported by Plumbing Manufacturers International (PMI), the new law directs online marketplaces to collect and verify certain information from high-volume, third-party sellers while giving the Federal Trade Commission (FTC) rulemaking and enforcement authority. State attorneys general also enforce the law.

For many years, PMI has worked cooperatively with the Department of Energy, the Environmental Protection Agency and various state regulators to identify bad actors and mitigate the impact of counterfeit, contraband, noncompliant products, trademark violations and intellectual property theft. 

In early 2021, PMI joined with the Buy Safe America Coalition — a diverse group of retailers, consumer groups, wholesaler-distributors and manufacturers — to support and advance the INFORM Consumers Act. PMI members care deeply about the safety and authenticity of their brands and products. They invest heavily to design, test and produce high-performing products that comply with federal, state and local health and safety standards. 

The new law helps close the gaps that allow stolen and counterfeit plumbing products to be sold on online marketplaces.

What Are the Law’s Requirements?

The INFORM Consumers Act requires online marketplaces, such as Amazon and eBay, to collect and verify seller information, disclose certain information to buyers and suspend noncompliant sellers. A violation of the law is handled as a violation of an FTC rule and can cost up to $50,120 per penalty, the FTC reports.

Online marketplaces must verify information from high-volume, third-party sellers, including their tax identification number, bank account information and contact information. The law defines high-volume sellers as vendors who have made 200 or more sales of new or unused products in a 12-month period amounting to $5,000 or more. 

High-volume, third-party sellers with combined gross revenues of $20,000 or more must disclose certain information to buyers. Disclosure of a seller’s contact information and a mechanism to report suspicious marketplace activity must be “clear and conspicuous” for buyers, the law says. It also requires marketplaces to suspend sellers that fail to comply with any of these rules.

Before the new law took effect, the FTC sent letters to 50 online marketplaces across the country, calling out their obligation to comply with the new law.

The FTC offers a publication, “Informing Businesses About the INFORM Consumers Act,” that provides compliance basics, and a site to report possible violations of the law. 

Other Ways Amazon and Government Agencies Battle Fake Products

Amazon, the world’s largest online marketplace, and several government agencies have programs and systems in place to combat online sales of fake products.

PMI proactively engaged Amazon to address PMI members’ concerns about noncompliant and counterfeit products making their way onto the site. Amazon has created several online tools to fend off copies of patented products, counterfeits and noncompliant products. 

Amazon Project Zero delivers automated protections by continuously scanning more than 8 billion daily listings on Amazon and then proactively removing suspected counterfeits. Brands provide key data points about themselves, such as trademarks and logos. A self-reporting feature allows businesses to remove counterfeit products using Amazon’s new self-service tool. 

Another tool — Amazon’s Transparency system — allows businesses to issue unique transparency barcodes to place on each product to be sold by Amazon or one of its selling partners. Any products arriving at Amazon’s warehouses without a transparency code are rejected.

Amazon Brand Registry helps plumbing manufacturers and other companies protect intellectual property and trademarks by detecting and reporting suspected intellectual property infringement using Amazon’s tools.

Products failing to meet energy-efficiency laws, certification marks on products that haven’t been anywhere near a certification lab and noncompliant products abound. Unfortunately, the situation becomes worse when those noncompliant, counterfeit products make their way into commercial and residential construction, potentially putting people at risk for health and safety issues. 

U.S. Customs and Border Protection (CBP) has been educating the public to illuminate the risks of counterfeit goods with the campaign “Fake Goods. Real Dangers.” Last year, CBP reported that it seized more items posing health and safety risks than ever before. 

The agency points out that many counterfeit products are low-quality and can cause injuries. Customers and businesses can report suspected counterfeit products along with trade violations and suspected criminal and illegal activities to CBP using the CBP E-Allegations Online Reporting System. 

Suspicions about intellectual property crime — such as copyright piracy, trademark counterfeiting, Internet fraud and the manufacture or sale of counterfeit or pirated goods — can be reported to the Federal Bureau of Investigation (FBI) or a local FBI office.

PMI and its members are grateful for the new law and other protections Amazon and government agencies have put in place to protect American customers from buying counterfeit and stolen plumbing products and other goods.

The plumbing manufacturing industry’s ingenuity remains a beacon for the world. Assuring plumbing fixtures and fittings stay safe and in proper working order will continue to require us all — along with the government — to remain vigilant in a world flooded with global online marketplaces. 

Kerry Stackpole, FASAE, CAE, is the CEO/executive director of Plumbing Manufacturers International. Stackpole has spent more than two decades leading trade associations in manufacturing, technology and services. Contact him at kstackpole@safeplumbing.org.