Why your fake fashion is funding organised crime

0:02Sky News, the full story first.

0:10Fake fashion and counterfeit goods are funding criminal gangs to the tune of billions of pounds a year. And this is why.

0:26Hi everyone, Neil here. Now, as you may already be aware, I am a dedicated follower of fashion, or at least I used to be before the Mockage and the Weeman. So if the opportunity presented itself for me to get the brands that I like at a much reduced cost, do you know what? I think I might take it. The trouble is, I could be directly funding criminal gangs. It's called fake fashion. Anyone who has a heart attack, it is not real, OK? Counterfeit goods are readily available from shops and online. Social media is awash with people bragging about their knock-off items. Holding up their sort of little fake bags, saying how brilliant it is.

1:07It's being sold typically as a sense of a little slice of luxury at a bargain price. Go to the link in my bio and you can buy it like I did within minutes. Click, click, click. and off you go. It's an industry worth billions, and a Sky News investigation has revealed that most of the money is going into the pockets of those you'd more commonly associate with firearms rather than fashion. Leading that investigation, Sky's Katerina Vitozzi. Good to have you back on the podcast. Lovely to be here. But you're also joined by one of the people that you actually spoke to for the support. Sarah Woodcock is Chief Executive Officer of the Anti-Slavery Collective, which has done quite a lot of work, actually, as I understand it, and the links between counterfeit goods, forced labour, and of course this fast fashion market we're going to get onto as well.

1:51Look, Katharina, starting with you, counterfeit fashion. It's not something that's really kind of entered my orbit. So just explain what we're talking about. Well, can I just say, you might think it's not entered your orbit, but if you're like me, I was exactly the same as you. I thought, oh, I've never bought anything knockoff. But actually in the process of making this film, I looked in my cupboard and to my sort of shame now that I realise the links and the associations, that come with fast fashion. I found three items really quickly that I had bought on holiday or I'd bought online, which were counterfeit designer goods.

2:29And I wouldn't necessarily think I was the market that would be buying these things. So I had a fake Gucci handbag I bought on holiday from like a little market stall. I bought some Birkenstock sandals and a scarf with like a Burberry-esque pattern, which to be fair, I think my mum bought me for Christmas one year. And I think the key thing I realised in that moment and that we explored during the making of the film was I didn't think twice when I was buying these items. I knew they were knockoff, but I didn't think beyond that. I didn't feel like there was a criminal aspect to it because to be clear, it's not illegal to buy these items.

3:03It's illegal to sell them and promote them. what I was doing wasn't illegal and I think there is that sense I'm sure Sarah would agree there is this sense that it's sort of a victimless crime or it's not even really a crime when it comes to consumer perception as such and that's something which I shared then but knowing what I know now it's a question I was going to film would I buy something now. Well just to jump off what Katerina was saying every single one of our team also went through the same process of realising we had all bought counterfeit items. I've worked in human rights for 20 years.

3:35It just didn't cross my mind. It literally didn't hit me that there might be a moral question behind it. But in terms of how easy it is to find, it's just absolutely everywhere. I think the big problem we've got with counterfeits is just it is completely normalised in the UK, not just in the UK globally. People are buying this stuff up and down the country. They're buying it online, they're buying it in person, and they're buying it at a rate that we've never seen before. It's really an epidemic of counterfeits. Let's start with the shops. Where are these places? I could probably take you out of this door here where we are in central London in 10 minutes.

4:11Now that we've gone through this and I've worked with trading standards and some private investigating teams, find you something within about 10 minutes. Really? Yeah. That's close. I mean, in terms of bricks and mortar, there are hotspots, aren't there? So Camden in particular in London, Birmingham, Manchester, although they have done a lot of work to try and crack down on that. Glasgow is also in terms of sort of concrete material sales. But really, the access also now to these goods online has just opened it up to a whole new generation of consumers. So you don't have to have 10 minutes to find something.

4:45You can find it literally in seconds on social media accounts where it's being promoted. What sort of stuff are we talking about? I mean, I've just noticed down the side of our A poly bag with what looks like some goods. Yes. So this is for people who are listening and not watching. We went to Camden Market and we also went online to see what sort of things we could buy, how much they were being sold for, how easy it was. The answer to that last question, incredibly easy to find this stuff, even in areas where trading standards teams were doing a lot of work. So this is, what I've got in my hand, is a kids' the North Face hoodie.

5:25So this was marketed as being for five to six-year-olds. I'm going to pass it to you. Okay, so it's a blue hoodie, North Face logo. The North Face logo looks absolutely spot on to me. I'm just having a look. The label, there's a label with a QR code on it. And I was about to say the North Face web address, but it's not. It's the nerothface.com. So you spotted probably the most obvious thing that the actual security label on it is incorrectly spelt. So what's interesting about this hoodie is that we found this via a seller online on Facebook. And it was being sold as a genuine item. So someone would be buying this thinking they were buying something.

6:05Because you're right, at first glance, it looks okay. But beyond those sort of like the labels and the stitching, and also there's a little metal eyelet that within moments of it coming in the post fell off. I've just seen, yeah, there's only one left on it. Yeah, for a kid's hoodie, those hood cords that you can see, so the bits of string that come out of the neck, they're illegal in the UK. So that article which we bought, and someone may have bought in good faith for Christmas, is a potential health hazard as well as being something which actually within minutes has sort of been, sort of had bits falling off it.

6:37Price point. I mean, how much would I be expecting to pay for this and how much did you pay for that? So£60 if you were to buy it properly,£20. So again, the price was a real giveaway. And also the whole mechanism. If you watch our film, you'll see us in the process of negotiating with the person selling it. And you'll see the back and forth is, put it into my account. Put the reference friend. The seller was saying they were female. The actual bank account name was in a guy's name. There were so many red flags that would suggest it wasn't genuine. But people are buying this stuff, otherwise they wouldn't be selling it.

7:09Sarah, what is the size of this market, if we're talking about specifically this kind of counterfeit goods area? Well, in the UK, I mean, our research, so the Anti-Slavery Collective, we conducted some economic research and we were looking at figures of nine billion. So we're talking about an absolutely enormous industry and you can't even isolate the UK. This is a global criminal industry. And I think that is really not well understood. And I think that link to organised crime, what we've really looked at is how lucrative this is for organised crime groups. And really what our research has shown us is that this is the most lucrative income stream for organised crime groups, more than drugs, more than guns, counterfeits.

7:51You're telling me that knock off baseball caps, that's earning more money for criminal gangs than cocaine, heroin, crack, weed, all of those things. It's easier. It's easier. no one's taking it seriously. Everyone's normalised it, everyone's trivialised it. It doesn't matter. It's a knockoff. I don't want to have to pay the full price. So in terms of criminals, it's become an incredibly lucrative income stream for them. And I think if you think about it in terms of how a criminal group operates, these profits aren't isolated from the other things that criminal groups do. This is part of the same criminal enterprise.

8:31It's linked to drugs, it's linked to guns, it's linked to commercial sexual exploitation, it's linked to the law. Katarina, I mean, Sarah there was saying that it's being normalised. Who is normalising it? If you look at the demographic that is now, you know, the most hardy shoppers in this respect, it's the under 30s, the Gen Z. Sarah's team's research shows a lot of that's being fuelled by what they're seeing on social media. There are influencers who are openly promoting counterfeit goods, which is illegal to do. And selling. Promoting and selling directly. We could look on your phone now. Go on to, I don't know if you're on what social media you're on, but if you looked up cheap designer bag, boom, you'd find within seconds.

9:17And when these influencers are talking about these products, in what terms are they doing so? Are they eulogising about? It's, oh, this is an epic fake bag. you know, I've wanted one like this. Oh, don't worry. If you're thinking this is genuine, it's not. And LVMH, which is the most counterfeited brand, there's a lot of people holding up their sort of little fake bags, saying how brilliant it is. It's being sold typically as a sense of a little slice of luxury at a bargain price. Go to the link in my bio and you can buy it like I did within minutes. Click, click, click. And off you go. Sarah, what then does your research tell you?

9:54are the reasons that people are buying this stuff? I think the price is the most significant thing. I think also availability. So when I talked about normalisation, you've got normalisation, young people don't really see it as being a big problem anymore. And their cost of living crisis, don't have as much money as maybe they would have had. But it's just available. So it's also the supply of it. There's a really, really healthy demand. But also that normalisation has meant that law enforcement agencies aren't able to cope with the scale of this problem. And also it's not deemed as serious as some of those other things we talked about, drugs and guns and violent crime.

10:33So law enforcement agencies aren't prioritising it in the same way. So who's making the stuff? It's coming from places like China, Hong Kong, Bangladesh. I mean, speaking with trading standards officers, they put it quite bluntly, production moves to wherever it's cheapest. Right. So Turkey, I think, in recent years has become a more prominent place of manufacture. And it's being made by gangs who are involved in all sorts of criminality. I mean, we spoke to a former assistant director of police at Interpol who said it's not just sort of small organized crime gangs. It's Chinese triads. It's Mexican cartels.

11:12It's Italian mafia. counterfeiting is so, I mean, Sarah said it, it's so lucrative, but so relatively low risk. It's sort of a no brainer for big crime groups to think, why am I bothering with drugs and arms when I can be selling counterfeit caps? But if we're talking about an industry that's worth 9 billion. In the UK alone. In the UK alone. Yes. These gangs presumably are operating in terms of profits in the tens, hundreds of millions. It's incredibly lucrative. And I think that's what, going back to that price point question and the moral argument, do you want your money to go to an organised crime group?

11:55I mean, okay, it's really tempting. We've all wrangled with that. I'd rather pay 40 quid than 400 quid. But are you comfortable handing over your money to an organised crime group? And I think that we're inviting organised crime groups onto our high streets. and even if you're buying it online, you're inviting them into your home. They've got your address, they've got your banking details. But as you say, I think the normalisation of it, after we had sort of done a lot of the filming, we went and spoke to shoppers just in Manchester and a young woman who was really sharp and, you know, she just said, it's the same feeling for me now to go into a high street shop as it is to go online and buy something which is knowingly counterfeit.

12:38And I thought it was really interesting that she said it's the same feeling because there was no sort of moral question for her. The criminal gangs, they obviously have to sell it in this country from somewhere. Those bricks and mortar retailers, do they know that the stuff that they're flogging is coming from criminal gangs? We went on a trading standards raid in Wolverhampton and we went into this stock room and it was a bit like that scene in Jaws, you know, when they say we're going to need a bigger boat. This trading standards scene went in and we're like, we're going to need a bigger van.

13:06I mean, it was absolutely floor to ceiling, massive boxes. And they'd all been direct shipped. So I think it would be hard to believe that someone in receipt of these boxes that were dog-eared, done up with fragile tape, direct shipped them from a factory in Bangladesh, that that was going through any proper channels in order to then get to their shop in Wolverhampton. The people who are working in that supply chain are part of a criminal supply chain, but they might not necessarily be aware of that or they might not necessarily have the freedom to choose whether they're able to sell those goods or not.

13:40Because obviously our research really focuses on how people are being exploited within these supply chains. In terms of combating this, who is responsible? And we are talking about multinational, billion pound grossing criminal gangs. And from what you've both just said to me, it sounds like it's a couple of guys from trading standards in high viz who are the front line of the war against this criminality. There are different groups, but it seems from the people we've spoken to, everyone operates quite separately. So you've got trading standards who'd be the enforcement team that would go into a bricks and mortar shop and raid and take things off and try and bring a prosecution about that way.

14:19At the border, you've obviously got border force. And then there's, you know, various groups, you can look at it from a sort of HMRC tax perspective. And then there's the intellectual property office, part of the UK government, which is a massive UK government department looking at IP infringement. So there are these different groups, but I think what became clear to us is that there's this real need for a more resources just from the enforcement perspective. So the trading standards team, and we spoke to one officer who said, you know, I used to work in a team of 20. I now work in a team of three.

14:46But a sense of if all those different groups work more collectively, shared information, it would be a lot, would be a much more powerful tool. But I know that you've also been actually saying the whole enforcement picture just needs to be far more resource anyway, Sarah. Absolutely. So obviously our research is on this human exploitation side. If we could show that connection more, if people really concretely knew that these products had kind of forced labour exploitation stitched into them, then I think it would help empower government departments, law enforcements to prioritise this issue. because it's not just a victimless crime.

15:24It's absolutely not. It's the opposite of that. I'm not sure. There are many Gen Zers who are going to look at that and think, do you know what, ethically I must make a different decision. I think there actually are big swathes of that demographic who if we're given the right repeated access to information on why this is dangerous, harmful, bad for the environment, bad for security, they might start to make better choices. I think we certainly need to work with influencers, the people that are actually peddling this stuff to young people online, they need to know about what they're engaged in, organised crime.

15:58Let's do that. Give them an example of the human cost of buying these sorts of counterfeit materials. So in our research, we found cases in Manchester of young boys' men being paid, and I'm using inverted commas there, being paid to work as spotters outside counterfeit operations. They would literally be situated at the end of the street in the freezing cold for 16 hours a day, paid£20 for their troubles, being given a burner phone. These were vulnerable individuals. They might have recently arrived in the country. They might not know what they're doing. There is no choice there. Basically, they're given this job where it's high personal risk for them of being arrested.

16:41They're being paid no money whatsoever. That is actually a case of forced labour. Of course it is. Katerina, last word to you. You ever going to buy anything dodgy again? I'm going to be decidedly off-brand because, I mean, I went into this with a little bit of knowledge. I've come out of it with a lot more. And that awareness, yeah, I will be cleansing my cupboard forthwith. Looking forward to seeing it. Certainly not on eBay, I hope, anyway. Katerina, Sarah, lovely to have you both here. Thanks very much. Thank you very much. Thank you. Now that is your lot for today but before you go can I just draw your attention to our sister podcast Electoral Dysfunction obviously a focus on politics and this week they've got a very special guest coming on none other than the Prime Minister I'll wager Beth Rigby has more than a few questions for him do give it a try if you haven't already we are back again tomorrow