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Counterfeit goods: designer handbags, Rolex watches, and now airplane engine parts

Counterfeit goods used to be so obvious most people knew if their Rolex was a fake. As the market has turned to the Internet, more consumers are unwittingly buying counterfeit designer handbags - and having gone so far as counterfeit airplane engine parts, it's as much a health and safety issue as an economic one.

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The problem can hardly be understated, says a Department of Commerce official, herself a recent victim of counterfeiting when she purchased DVDs of a television series from eBay. At least 115 people, many of them children, were poisoned by a counterfeit cough medicine in Panama in 2007. The worst confirmed airline accident caused by fake airplane parts occurred in 1989, when a charter company's turboprop plane flying 55 passengers from Oslo to Hamburg, Germany, crashed into the North Sea. There were no survivors.

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"We have enforcement agencies that keep those products out of the hands of consumers in the United States," says the Commerce Department official, who asked that her name not be used. "But it's not out of the realm of possibility that something could get through."

Counterfeiting goods is one of the fastest growing crimes in the US. The total value of IPR seizures rose more than 25 percent a year between 2005 and 2008, according to US Customs and Border Protection. Last year, because of the recession, IPR seizures and the value of the seizures dropped slightly: 1 percent and 4 percent, respectively. Still, there were 14,841 IPR seizures in 2009 with a domestic value of $260.7 million. And in the context of an overall 25 percent drop in US imports, "really, we equate that [slight dip] to an increase," Mr. Halverson says.

Counterfeiting is expected to start growing again as the economy recovers.

To protect yourself against inadvertently buying a fake, remember that if the price is too good to be true, it probably is. Buy only from sellers with an established reputation. When buying online, only use retailers that have a functioning phone number for customer service, a coherent return policy, and a physical address.

Professor Scafidi adds this caution: "Be suspicious of retailers with a full stock of otherwise sold-out items, like the latest 'it' fashion or popular children's toy."

Some fakes are still easy to spot because the quality is inferior or there are obvious errors, like spelling mistakes on labels. Some might require closer scrutiny. Examine merchandise carefully, including the packaging and labeling. Something as simple as a different font size on a drug label or a logo missing on a bluejean's rivets can indicate a fake. If you still aren't sure, take your product to a store that sells the actual product and compare your merchandise side by side.