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Textiles and Fraud

by JULIAN ELLIS OBE M.Phil C.Text FTI MRSC MAE, Chartered Textile Technologist

THE TWO TYPES of case described below indicate some of the wide range of cases that the textile technologist can deal with.

Counterfeit textiles are big business, because of the mark-up on some branded goods. When examining items in relation to counterfeiting prosecutions, the task is particularly difficult if there has been a delay between the seizure of the allegedly counterfeit goods by Trading Standards and the request for expert examination from the defence. The problem arises because countersamples from an impeccable source are much more difficult to obtain, as the season may have changed and identical goods are no longer available. Therefore examination must take place comparing similar goods.

 

The most obvious indicators are the labels.

Are the labels the same style? Is printing the same colour? Is the card on which the labels are printed of the same weight? Are there serial numbers on the labels? If there are many similar items, are the serial numbers repeated? Are there special security threads passing through the labels in both genuine and allegedly counterfeit goods?

The embroidery is the next area to be considered: there is usually some on most branded goods. Is the quality of the stitching of a similar standard? Is the backing fabric to the embroidery of the same type? Is the design exactly the same? Has the embroidery been put on the garment before it was stitched together, or was it added afterwards?

Then the garment itself. Are the number of stitches per inch in the seams the same? Are the buttons sewn on in the same way?

These and many similar areas of examination will all provide clues as to the possible genuineness of the goods.

Unfortunately for the unsuspecting, counterfeiters often show their customer genuine goods as samples, but when the clothing is delivered most or all are found to be fake, often meaning that the poor customer is left with a financial loss, or must take the risk of trying to sell them.

Some goods are made in the same factory as the genuine ones, using identical fabric and specifications to the genuine articles: in such cases normally only the labels are fake, making the determination a difficult one. The goods are simply unauthorised, but do not actually damage the reputation of the owner of the brand, since the goods are of their normal standard.

In almost all cases, the brand owners are desperate to protect their brands, although some could do much more to help themselves, such as using special security markers in their labels and using serial numbers. The retailer must show that he has taken appropriate precautions to purchase from a genuine source: if he has, then he has an adequate defence, but buying goods from somebody ‘met in the pub’ is not counted as being duly diligent!

In a completely different area of fraudulent activity, I was called upon a few years ago to examine production and other records of a textile company who had suffered a serious fire. When a large insurance claim was made for loss of business from the effects of the fire, the insurers suspected that the claim was rather high, and asked me to see if the claim tallied with the levels of production they had been achieving. When I was told that the looms had been declared a complete loss in the fire, I commented that I was surprised, because to destroy a loom it is usually necessary to break the frame, in the same way as the Luddites had almost 200 years ago. It is usually possible to replace most of the small parts reasonably cheaply, since they tend to be subject to wear and therefore are consumables; the only large part to replace is the drive motor, but they are relatively inexpensive.

When working my way through the huge amount of paperwork relating to production figures, I came across a fax which read “The machinery: the looms are 80% OK. It needs cleaning and replacing of the plastic parts. The job is easy but time consuming.

We are going to claim from the Insurance for write off and try to move these machines to our facility at... It all depends on what the Insurance will say tomorrow. These looms can be running again by the end of February. The machinery at the preparation department is all damaged 80%. We do not need these machines if we move the looms.”

That is, of course, exactly what they did, moving the looms across Europe, and repairing them. I visited the factory and found almost all the looms not only repaired, but running in production.

Despite this damning evidence, the claimants persisted, but at arbitration they not only failed in their bid for business loss, but a demand was made for them to repay all their previous insurance payouts.

It was unusual to find damning evidence, but no less satisfying for that!

Last Updated on Monday, 29 October 2012 12:31