The trade in counterfeit luxury goods is experiencing an alarming surge worldwide, with South Africa rapidly emerging as a prime hotspot for “triple A-grade” fakes, an insurance provider for the wealth segment has warned.
According to AMI Underwriting Managers, the scourge of luxury scams permeates all corners of the luxury goods market, from counterfeit wine collections to classic cars, and even high-end electronics.
Christelle Colman, the chief executive of AMI, says these are highly deceptive replicas of luxury items that even discerning buyers struggle to tell apart from the genuine articles. She adds that a significant proportion of clients fall prey to scams involving counterfeit luxury goods.
“Buyers are often deceived by these high-quality counterfeits, which can be priced at up to 80% of the original’s retail cost.”
Colman cautions that scammers employ crafty strategies such as alleging to sell pre-owned items to rationalise the lower price, prohibiting returns or exchanges, and operating without a website or physical address, thereby severely obstructing the buyer’s ability to verify the item’s authenticity.
If scammed, can I claim?
For those who were scammed out of their money, lodging a claim with their insurer is for the most part not an option.
Insurance policy wordings typically state that losses or damages resulting from scams, fraud, or deceitful theft are not covered. This is a comprehensive rule that permeates all sections of policy cover.
“Due to the difficulty in determining the authenticity and true value of these goods, insurance coverage is often unavailable once the buyer realises their mistake,” Colman explains.
And if the continued rise in online scams is anything to go by, the risks of being ensnared by them will just grow bigger.
Colman says it falls upon consumers to keep themselves educated, vigilant, and safe from scams, just as it falls upon companies such as AMI to assist and guide them in navigating this complex landscape.
How can consumers protect themselves?
Purchasing directly from the brands themselves or through trusted resellers is a significant first step. Equally critical is gaining a clear understanding of one’s insurance policy, particularly with respect to the exclusions related to scams and fraud.
Colman implores consumers to remain informed and vigilant. She says in case of uncertainty or confusion, consumers should consult their insurer or broker to clarify any doubts about their coverage.
“It is also crucial to exercise caution and a healthy dose of scepticism when it comes to deals that seem too good to be true. The old adage remains as valid today as ever: if a deal appears too good to be true, it almost certainly is.”
Colman also suggests that consumers need to update their knowledge about the different forms of scams that are prevalent. She says regular updates from insurance providers, financial institutions, and law enforcement agencies can go a long way in keeping consumers aware and alert.
