Coalition Letter to Energy & Commerce Committee
November 10, 2020
The Honorable Greg Walden
Ranking Member
Committee on Energy and Commerce
U.S. House of Representatives
Washington, DC 20515
Dear Republican Leader Walden:
We commend members of the Energy and Commerce Committee for their November 2 letter to the Federal Trade Commission calling on the agency to scrutinize deceptive drug advertisements that pose serious threats to public health and soliciting requests for any additional enforcement tools needed.1 In your ongoing efforts to protect consumers from bad actors, we urge you to take equally strong measures to combat another urgent problem that poses increasing risks to consumers and local businesses amid the pandemic: organized retail crime.
Organized retail crime refers to highly coordinated networks of criminals that steal large quantities of goods from neighborhood stores and then anonymously sell those items on online marketplaces. It’s a problem that has continued to grow in recent years as more and more Americans do their shopping online, providing criminals a larger market to exploit. In fact, it costs U.S. retailers roughly $25 billion per year.2
Now, with record numbers of consumers relying on e-commerce platforms amid the pandemic, organized retail crime is surging. Criminals are exploiting the anonymity and lax rules on platforms to take advantage of unsuspecting consumers. Just last month, California Attorney General Xavier Becerra announced that $8 million in stolen merchandise was recovered as a result of a joint investigation. The thieves had been targeting retail stores across the San Francisco Bay Area.3 And according to Red Point, a brand protection company, 39 percent of e-commerce leaders had seen an uptick in counterfeiting since the onset of the pandemic.4
In the same way that dishonest drug advertisements put consumers in harm’s way, so does organized retail crime. The Congressional Research Service found that there are serious public health and safety issues with stolen consumable or health and beauty products. It is common for stolen goods to expire, as they are stored in warehouses for indefinite periods of time and repackaged with incorrect expiration dates before they are shipped out. Organized retail crime operations are prone to mishandling these items, putting consumers in danger.5
Counterfeit products, which are also sold to unwary consumers, are just as unsafe. According to a U.S. Department of Homeland Security report on counterfeit and pirated goods,6 it typically costs much less to produce counterfeit products that do not meet federal health and safety regulations. And these sophisticated criminal operations aren’t just limited selling illicit goods. They are also tied to other criminal activities, including human trafficking, money laundering, and narcotics.7
The Buy Safe America Coalition asks that you support the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers (INFORM) Act. This bipartisan, common-sense legislation, now proposed in both the U.S. House and Senate, would require third-party marketplaces to collect and verify basic information that identifies sellers.8 It’s time for lawmakers to enact common sense laws and tackle this threat to consumer safety head-on. Whether it’s through the use of misleading advertisements or stolen retail products, Congress must act now to protect consumers especially with the holiday shopping season already underway.
We look forward to continuing our work with the Energy and Commerce Committee on keeping American consumers safe.
Sincerely,
Michael Hanson
Spokesperson for Buy Safe America Coalition
BuySafeAmerica.org
cc: The Honorable Cathy McMorris Rodgers The Honorable Dr. Michael Burgess
The Honorable Robert E. Latta The Honorable Brett Guthrie
1 U.S. House. The Committee on Energy and Commerce. E&C GOP Leaders Urge FTC To Crack Down on Trial Lawyers’ Misleading Ads. November 2, 2020. https://republicans-energycommerce.house.gov/news/letter/letter-to-the-federal-trade-commission-on-deceptive-lawsuit-advertising-and-marketing-practices-by-plaintiff-lawyers/
2 O’Shea, Dan. Retail Dive. Shrink cost retailers $100B last year. Shrink cost retailers $100B last year. May 29, 2018. https://www.retaildive.com/news/shrink-cost-retailers-100b-last-year/524460/
3 CBS San Francisco. Major San Francisco Bay Area Retail Theft Ring Busted; Five Suspects Arrested; $8 Million In Stolen Merchandise Recovered. October 6, 2020. https://sanfrancisco.cbslocal.com/2020/10/06/major-san-francisco-bay-area-retail-theft-ring-busted-five-suspects-arrested-8-million-in-stolen-merchandise-recovered/
4 Red Points. Counterfeiting Up by a Third Since Start of Pandemic. May 5, 2020. https://www.redpoints.com/press/counterfeiting-up-by-a-third-since-start-of-pandemic/
5 Finklea, Kristin. M. Congressional Research Service. Organized Retail Crime. December 11, 2012. https://fas.org/sgp/crs/misc/R41118.pdf
6 The United States Department of Homeland Security. Combating Trafficking in Counterfeit and Pirated Goods: Report to the President of the United States. January 24, 2020. https://www.dhs.gov/sites/default/files/publications/20_0124_plcy_counterfeit-pirated-goods-report_01.pdf
7 Meehan, Tom. Loss Prevention Magazine. August 7, 2018. https://controltekusa.com/how-organized-retail-crime-fuels-human-trafficking/
8 The Office of United States Congresswoman Jan Schakowsky. Schakowsky Introduces Legislation to Protect Consumers Online. July 23, 2020. https://schakowsky.house.gov/media/press-releases/schakowsky-introduces-legislation-protect-consumers-online
The Honorable Greg Walden
Ranking Member
Committee on Energy and Commerce
U.S. House of Representatives
Washington, DC 20515
Dear Republican Leader Walden:
We commend members of the Energy and Commerce Committee for their November 2 letter to the Federal Trade Commission calling on the agency to scrutinize deceptive drug advertisements that pose serious threats to public health and soliciting requests for any additional enforcement tools needed.1 In your ongoing efforts to protect consumers from bad actors, we urge you to take equally strong measures to combat another urgent problem that poses increasing risks to consumers and local businesses amid the pandemic: organized retail crime.
Organized retail crime refers to highly coordinated networks of criminals that steal large quantities of goods from neighborhood stores and then anonymously sell those items on online marketplaces. It’s a problem that has continued to grow in recent years as more and more Americans do their shopping online, providing criminals a larger market to exploit. In fact, it costs U.S. retailers roughly $25 billion per year.2
Now, with record numbers of consumers relying on e-commerce platforms amid the pandemic, organized retail crime is surging. Criminals are exploiting the anonymity and lax rules on platforms to take advantage of unsuspecting consumers. Just last month, California Attorney General Xavier Becerra announced that $8 million in stolen merchandise was recovered as a result of a joint investigation. The thieves had been targeting retail stores across the San Francisco Bay Area.3 And according to Red Point, a brand protection company, 39 percent of e-commerce leaders had seen an uptick in counterfeiting since the onset of the pandemic.4
In the same way that dishonest drug advertisements put consumers in harm’s way, so does organized retail crime. The Congressional Research Service found that there are serious public health and safety issues with stolen consumable or health and beauty products. It is common for stolen goods to expire, as they are stored in warehouses for indefinite periods of time and repackaged with incorrect expiration dates before they are shipped out. Organized retail crime operations are prone to mishandling these items, putting consumers in danger.5
Counterfeit products, which are also sold to unwary consumers, are just as unsafe. According to a U.S. Department of Homeland Security report on counterfeit and pirated goods,6 it typically costs much less to produce counterfeit products that do not meet federal health and safety regulations. And these sophisticated criminal operations aren’t just limited selling illicit goods. They are also tied to other criminal activities, including human trafficking, money laundering, and narcotics.7
The Buy Safe America Coalition asks that you support the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers (INFORM) Act. This bipartisan, common-sense legislation, now proposed in both the U.S. House and Senate, would require third-party marketplaces to collect and verify basic information that identifies sellers.8 It’s time for lawmakers to enact common sense laws and tackle this threat to consumer safety head-on. Whether it’s through the use of misleading advertisements or stolen retail products, Congress must act now to protect consumers especially with the holiday shopping season already underway.
We look forward to continuing our work with the Energy and Commerce Committee on keeping American consumers safe.
Sincerely,
Michael Hanson
Spokesperson for Buy Safe America Coalition
BuySafeAmerica.org
cc: The Honorable Cathy McMorris Rodgers The Honorable Dr. Michael Burgess
The Honorable Robert E. Latta The Honorable Brett Guthrie
1 U.S. House. The Committee on Energy and Commerce. E&C GOP Leaders Urge FTC To Crack Down on Trial Lawyers’ Misleading Ads. November 2, 2020. https://republicans-energycommerce.house.gov/news/letter/letter-to-the-federal-trade-commission-on-deceptive-lawsuit-advertising-and-marketing-practices-by-plaintiff-lawyers/
2 O’Shea, Dan. Retail Dive. Shrink cost retailers $100B last year. Shrink cost retailers $100B last year. May 29, 2018. https://www.retaildive.com/news/shrink-cost-retailers-100b-last-year/524460/
3 CBS San Francisco. Major San Francisco Bay Area Retail Theft Ring Busted; Five Suspects Arrested; $8 Million In Stolen Merchandise Recovered. October 6, 2020. https://sanfrancisco.cbslocal.com/2020/10/06/major-san-francisco-bay-area-retail-theft-ring-busted-five-suspects-arrested-8-million-in-stolen-merchandise-recovered/
4 Red Points. Counterfeiting Up by a Third Since Start of Pandemic. May 5, 2020. https://www.redpoints.com/press/counterfeiting-up-by-a-third-since-start-of-pandemic/
5 Finklea, Kristin. M. Congressional Research Service. Organized Retail Crime. December 11, 2012. https://fas.org/sgp/crs/misc/R41118.pdf
6 The United States Department of Homeland Security. Combating Trafficking in Counterfeit and Pirated Goods: Report to the President of the United States. January 24, 2020. https://www.dhs.gov/sites/default/files/publications/20_0124_plcy_counterfeit-pirated-goods-report_01.pdf
7 Meehan, Tom. Loss Prevention Magazine. August 7, 2018. https://controltekusa.com/how-organized-retail-crime-fuels-human-trafficking/
8 The Office of United States Congresswoman Jan Schakowsky. Schakowsky Introduces Legislation to Protect Consumers Online. July 23, 2020. https://schakowsky.house.gov/media/press-releases/schakowsky-introduces-legislation-protect-consumers-online
Discover More About the Coalition
About Coalition
The Buy Safe America Coalition represents a diverse group of responsible retailers, consumer groups, manufacturers, intellectual property advocates, and law enforcement officials who support efforts to protect consumers and communities from the sale of counterfeit and stolen goods.
Learn More
The Problem
The marketplace today for common, everyday goods is flooded with counterfeit and stolen products. Absent reform, legitimate businesses, and consumers will continue to be harmed.
Learn More
Frequently Asked Questions
What constitutes a counterfeit product? Why aren’t major online marketplaces doing more? Answers to common questions around the issue of organized retail crime.
Learn More