Coalition Letter to Committee on Energy & Commerce

February 8, 2021
 
The Honorable Frank Pallone
Chairman
Committee on Energy and Commerce
Washington, DC 20515
 
Dear Chairman Pallone:
 
The Buy Safe America Coalition (“Coalition”) thanks you for your tireless efforts to protect consumers and we look forward to working with you and the Committee to continue that important mission. The issue of consumer protection is at the forefront of the Coalition’s efforts and why we are singularly dedicated to stopping the sale of stolen or counterfeit goods on third- party marketplaces to unsuspecting consumers.
 
The Buy Safe America Coalition (“Coalition”) consists of a diverse group of responsible retailers, consumer groups, manufacturers, intellectual property advocates and law enforcement officials who support efforts at all levels of government to protect consumers and communities from the sale of counterfeit and stolen goods. This diverse group of members represents automakers, toy manufacturers, wholesaler - distributors, home improvement, apparel, footwear, power tools, sporting goods, beauty and health, and shopping centers to name a few.
 
Early last year the Committee held a hearing entitled “Buyer Beware: Fake and Unsafe Products on Online Marketplaces.” During your opening statement you stated that third party marketplaces provide consumers a convenient way to shop, however, you further stated, “The practices and policies of the online platforms have made it increasingly difficult for even the savviest consumers to avoid fake and unsafe products. For years, brick-and-mortar stores have had policies in place to ensure the integrity of their supply chain. The stores also take responsibility for defective or unsafe products. These traditional practices simply do not exist in the online marketplace. In fact, many online marketplaces seem to be taking the opposite approach —abdicating any responsibility because they are thriving off the sale of fake goods.” The members of the Buy Safe America Coalition wholeheartedly agree with your statement.
 
The sale of stolen and counterfeit goods represents a serious threat to legitimate businesses and poses genuine harm to consumer health and welfare. The problem has grown exponentially in the last year as record numbers of Americans have turned to online shopping and third-party marketplaces have grown in size and influence. Criminal networks have taken advantage of the COVID-19 pandemic and the rapid escalation of people buying their goods through marketplaces to peddle counterfeit, stolen, defective, harmful, and dangerous products to unsuspecting consumers.
 
The problem is widespread, impacting every community and virtually every retail category. For example, an organized retail crime network made headlines nationwide this past year in California when investigators uncovered and seized approximately $50 million in stolen health and beauty products. There are countless published accounts of faulty and defective infant car seats, strollers, bike helmets, car brake pads, air bags and toys that have injured a child, parent or family member. In recent months government officials have caught scam artists flooding online marketplaces with knockoff personal protective equipment (PPE). U.S. Customs and Border Protection officials in Cincinnati recently seized over 10,000 counterfeit surgical masks that had been illegally smuggled from China.
 
The financial impact has been felt by small, medium, and large businesses across the nation. Retailers are projecting that organized retail crime (ORC), which already costs retailers roughly $30 - $40 billion per year, will only increase in 2021. And according to a January 2020 report by the Department of Homeland Security, the annual cost of counterfeit and pirated goods being sold in the U.S. is over $500 billion. This is a multi-billion dollar problem that needs to be addressed. These criminal networks are cheating consumers, hurting legitimate businesses, devaluing American brands and endangering employees. If that were not enough, these criminals are often also connected to other criminal activities that impact our communities, including human trafficking, money laundering, and narcotics. We urge you, the Committee and Congress to address this problem quickly.
 
The Buy Safe America Coalition supports the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers (INFORM) Act because it is a common-sense, bipartisan solution to a growing consumer safety and economic threat. As you know, the legislation was introduced in the 116^th Congress, H.R. 7756, and will be reintroduced this year, again, by Chairwoman Schakowsky. It is our hope the Committee will consider this important legislation so legitimate businesses and consumers are protected through the enhancement of much needed transparency and accountability of third party marketplaces. Shining a light on these platforms is the best way to disrupt criminal elements and fraudsters from using them to build a business selling stolen and counterfeit goods to unsuspecting American consumers.
 
The Coalition, again, thanks you for your comments and support of fighting for legislation that will bring protection to consumers. We look forward to working with you, Chairwoman Schakowsky, and the members of the Committee to pass the INFORM Consumers Act so consumers have the protection they need and deserve.
 
Sincerely,
 
Michael Hanson
Spokesperson for Buy Safe America Coalition