Investigators trick Dubai shops to curb trade in fakes

To battle the growing trade in counterfeit goods, luxury brands are hiring firms to trick the traders into revealing where they keep their stocks.

DUBAI - OCTOBER 11,2010 - Mr. Imad Badawi, ( left  ) ,  Director of Intellectual Property Enforcement inspect the fake bags confiscated on a shop that sells fake products with him is Mr Sarmad Manto, (right ) ,Lawyer. ( Paulo Vecina/The National )
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DUBAI // A civilian network of mystery shoppers is trawling the markets of Dubai in pursuit of counterfeit goods, and passing on their tips to the police.

As many as 40 such investigators walk the streets daily in a bid to trick fake-goods traders into revealing where they keep their stock. They represent United Trademarks and Patent Services, an anti-counterfeit organisation hired by luxury brands to battle the rising tide of fake goods.

Makers of fake goods can erode an established brand's bottom-line performance. The global trade in counterfeit goods is worth $600 billion (Dh2.2 trillion) and accounts for as much as 7 per cent of the world economy, according to figures from the International Anti-Counterfeiting Coalition.

"Dubai is a major transit hub because of the purchasing power and the number of tourists," said Imad Nazmi el Badawi, the United Trademarks director. "That makes it attractive to these people."

His company, used by labels such as Louis Vuitton and Montblanc, is among a handful of brand protection groups investigating copyright infringements. The information they provide has helped anti-counterfeiting specialists at the Dubai Police Criminal Investigation Department in conducting inquiries and carrying out raids.

"Once we receive the complaint we start our own investigation and, if it proves correct, we raid the location, arrest the people and seize the counterfeit products," said Major Salah bu Se'aba, who heads the police anti-economic crime department. "On average we investigate about 10 cases a week."

United's team comes from a variety of backgrounds and includes people with an expert knowledge of car parts, information technology and luxury accessories. By posing as tourists, they convince shop owners to take them to large apartments used as warehouses for storing counterfeit goods.

"Three years ago the retailers would show us everything," said Mr el Badawi. "Now they hide their fakes in hidden rooms. We have scared them.

Some companies don't stop their involvement once the police are called. Montblanc employs its own legal team that goes into action once a major fake-goods case involving the firm goes to court, said Joe Nahhas, its UAE brand director.

"It is something that we take very seriously," he said. "It's difficult to stop it entirely but we've certainly made inroads with it."

Mr. Nahas declined to disclose how much the company loses from the trade in counterfeit products.

The United team meets every Sunday morning to discuss which brand to focus on for the week and what targets they need to reach. Each staffer's weekly goal is to record the location of at least two apartments used for storage of fake goods. Consistently meeting the quota pays off in year-end bonuses, Mr el Badawi said.

Though wise in spotting fake goods, the mystery shoppers are schooled in the tricks of the trade before being sent onto the streets, said Sarmad Hasan Manto, a lawyer and office manager at United.

"You have to convince the guy that you don't like the quantity which they are showing you," said Mr Manto. "He will take you to an apartment. There's a psychological game involved. You can't just go to Karama and shout about how you want fake goods."

Using shopping tips provided by United, a reporter from The National, posing as a tourist, was able get a firsthand look at a storage apartment for counterfeit goods. In an area near a dozen Karama shops, the reporter was taken to four or five different outlets by a sales agent before being brought to an apartment in a nearby residential building.

The number on the door of the third-floor apartment was scratched out and, inside, the living room was sparsely furnished. A bookshelf was then pushed open, revealing a huge stash of what appeared to be ersatz Louis Vuitton bags. Closed-circuit television cameras covered every angle of the hidden room.

* With additional reporting by Wafa Issa