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WJLA investigates the counterfeit makeup market

7 ON YOUR SIDE investigates the counterfeit makeup market (WJLA)

(WJLA) -- Kylie Jenner hates it. She hates it when counterfeiters steal her brand name and produce a product that looks a little like hers but is nothing like hers.

But the problem is much more serious than that. The Office of U.S. Immigration and Customs Enforcement calls it a health and safety issue for the United States. Why?

“You have no idea what’s in there,” said Patrick Lechleitner, the Special Agent in Charge at the Northern Virginia-based Homeland Security Investigations. “A lot of people selling are pretty flippant – it’s just makeup. Well, would you sell poison because you don’t know if its poison or not?”

Drugs are easy to spot as contraband. They’re illegal on their face. Makeup has to be tested. And investigators have found some nasty stuff in black market makeup. Urine, rat feces, arsenic, led and cyanide.

“Good isn’t cheap and cheap isn’t good,” said Lechleitner. “If it’s expensive to make it the right way there’s a market to make it more cheaply the wrong way.”

And getting your hands on it is easy. 7 On Your Side found a Craigslist seller in Springfield, Virginia, offering the Kylie Lip Kit, Birthday Edition, 3 for $35. We sent the seller a text, picked a public meeting place, and we met up in less than an hour. He drove up in a brand new Mercedes. He was personable and friendly. And he gave us an even deeper discount: 6 kits for $35. The authentic version sells for close to $40 for one.

“Where did you get this?” 7 On Your Side asked him.

“Some of it’s from China, some from California,” he answered.

“Big difference,” we responded. “How do I know if they’re real?”

“That I couldn’t tell you,” he said.

He admitted to having 2,000 more boxes in his basement.

The major makeup manufacturers spend millions protecting their brands (see statements from Estee Lauder and L’Oreal USA below). They hire private investigators like Jim Ricaurte to catch counterfeit sellers on the streets of New York. 7 On Your Side went along for the buy. Hundreds of dollars of fake MAC and Kylie Cosmetics for a fraction of the price.

“They believe it’s a bargain. It’s a great deal. It’s a great sale,” said Ricaurte. “Ultimately what they’re getting is more than just a great deal. They can get an eye infection or worse. They don’t think of the consequences.”

Many shoppers don’t believe it will ever happen to them.

“If I start breaking out, I will end up going to the emergency room for medical treatment and then I’ll probably toss it,” said DeeAnna Alvaro, shopping the black market. “I would know if it’s fake.”

But counterfeiters are good at looking real.

And Agent Lechleitner says counterfeit cosmetics can be the tip of the iceberg for criminals.

We did some digging and discovered that our Craigslist contraband came from a supplier who has several felony convictions, from credit card theft and crack cocaine distribution to money laundering. Our encounter with him was potentially more dangerous than we ever imagined.

7 On Your Side also asked Homeland Security Investigations to use their labs to test what we bought on the black market: to find out what really makes up this makeup. We’ll report those results when they come back.

In the meantime, look for misspellings on packages. Our fake Kylie kit misspelled the word “blue” in the ingredients as “bule.” And if it doesn’t pass the literal sniff test, it might have something in it that you don’t want near your face.

STATEMENT FROM ESTEE LAUDER:

1. What does Estee Lauder do to combat counterfeit makeup?

The Estée Lauder Companies is committed to providing our consumers with safe, prestige beauty products of the highest quality. Consumer safety is our top priority, which is why we are dedicated to the prevention of the illegal sale and distribution of counterfeit products. We take a holistic approach to ending counterfeit activity, which includes:

  1. Working closely with global law enforcement and government agencies
  2. A government relations strategy
  3. Conducting raids and seizures
  4. Educating customs officials
  5. A Global communications strategy
  6. Social media monitoring

2. How big is your investigative team?

We have about 24 people around the world in New York City, Canada, Long Island, Pennsylvania, Paris, London, Belgium, South Africa, China, Hong Kong. We have well over 400 years of combined law enforcement experience. This experience allows us to pick up the phone and connect with law enforcement around the world.

3. What do you think the scope of this problem is?

Counterfeiting is the practice of illegally manufacturing and selling products with the intent to deceive consumers. Simply put, counterfeit products are fake replicas of real products. Counterfeit products lack the superior quality, research and development, and rigorous safety testing that we invest in our products. Counterfeit products may contain ingredients that are banned or at levels that can be hazardous to consumers. Even if the color is the same, the quality, benefits and safety won’t be. Counterfeit products can be found through a variety of channels around the world, including unauthorized internet sites, flea markets, street vendors and individuals. Consumers may encounter a counterfeit good that appears genuine but is not. Counterfeiters are criminals and often engage in other unlawful conduct such as identity theft and delivering products that can cause harm to consumers. Additionally, many counterfeiting rings have been linked to organized crime networks and terrorist groups, with profits from counterfeit sales often used to support these activities.

4. How many companies/people are out there counterfeiting makeup?

Over the past decade, the problem of beauty counterfeiting has increased; we’d estimate by 50% or more. There is activity every day, every hour, in all parts of the world. It’s global epidemic and encompasses a wide-variety of global regions and people. E-tailing has exacerbated the problem.

5. Does counterfeit makeup affect your sales? And if so, to what degree?

To us, this is a consumer health and safety issue. It’s not about the impact on our sales.

6. Some argue that there is no harm in buying counterfeit makeup, what’s your response?

Counterfeit products are usually manufactured in poor and unhygienic conditions. These sites are extremely unsanitary – certainly not the image and environments consumers would want for products they are applying to their skin.

The only way to ensure that our products are authentic and safe is to purchase from our authorized online or in-store retailers or directly from our brands. Lists of authorized retailers can be found on our brands’ websites.

7. Has Estee Lauder found dangerous knock-off products being made nationally or internationally?

Yes. In 2016, Estée Lauder Companies conducted over 1,350 seizures and confiscated over 2.6 million pieces of counterfeit products (not just MAC). Fakes are usually manufactured in giant warehouses–nothing is regulated, which means potentially toxic chemicals, unsafe temperatures, and hazardous conditions.

8. If yes, can you provide us pictures of where those products were being made?

We are not sharing images at this time.

9. What do you advise customers to do to keep themselves safe?

The only way to ensure that our products are authentic and safe is to purchase from our authorized online or in-store retailers or directly from our brands. Lists of authorized retailers can be found on our brands’ websites. Unless consumers purchase through an authorized retailer, it is difficult to know if a product is authentic and safe, if it has been tampered with, whether it has been stored correctly, etc.

STATEMENT FROM L’OREAL USA:

As the global leader in beauty, we take great pride in creating products that millions of people enjoy every day. We know our success depends on consumers’ trust that our products are safe, high quality and effective. This is a responsibility we take very seriously and have for the past 100 years.

Consumer safety is our absolute priority. Led by former federal law enforcement employees, we implement a robust anti-counterfeiting program to mitigate the presence of counterfeit products on the market. Our anti-counterfeiting program includes:

o We use a proprietary coding system on some of our products, giving them a unique identifier – or “license plate.” We strategically select a portion of our products to receive this coding, enabling us to determine whether branded products in the marketplace are stolen, diverted or counterfeit.

o We maintain strong relationships and constantly liaise and train with local, state and federal authorities. As the global leader in beauty, we are able to share deep industry expertise as these groups conduct their investigations.

o We aggressively monitor for counterfeit activity and vigorously prosecute violators. We often refer these offenders to law enforcement and review each case to determine if we will also take legal action to protect our brands’ reputations.

  • We recently won civil court cases against offenders who counterfeited our Clarisonic and SkinCeuticals products.

o We participate in regular conversations with our industry peers and are members of the International Anti-Counterfeiting Coalition (IACC). During these forums we share and learn information about recent beauty counterfeiting trends and successes.

o We are also working with a congressional sub-committee on counterfeiting issues.

STATEMENT FROM FDA:

Counterfeit products may be harmful, especially if they are contaminated with microorganisms or contain harmful ingredients that are not correctly declared on the label. The FDA monitors for potential safety problems with cosmetics and takes action when needed to remove the counterfeit products from the market.
The FDA advises consumers to be wary of products offered for sale in flea markets or re-sold over the internet in promotional channels such as online auctions, as they may be counterfeit or “fake” versions of the product. These products may be contaminated, contain the wrong ingredient or tampered – posing a potential risk to consumers.
We continue to urge consumers, cosmetic professionals and manufacturers to report all suspect counterfeit products to the FDA. The FDA encourages consumers to report any adverse reactions via the FDA’s MedWatch reporting system, either online or by phone at 1-800-FDA-1088, or by contacting your nearest FDA district office consumer complaint coordinator.

7 ON YOUR SIDE's Kimberly Suiters previewed her story on ABC7's Facebook Live. Watch below:


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