Fool's gold – the real price we pay for designer fakes

It's what's known as a blindspot.

While most of like to think we live our lives on the right side of the law, despairing at the apparently growing problems of youth crime and gun culture, wave a fake Burberry handbag under our nose and our resolve soon begins to crumble.

According to a report two-thirds of consumers,

who would presumably also describe themselves as upstanding members of society, are happy to own fake clothing, footwear and watches, believing that on the spectrum of criminal activity it hardly even registers.

While once we accepted luxury was the preserve of a wealthy elite, the public appetite for designer labels has never been greater and those who can't afford the real thing will simply buy the best copy they can.

"It's not a new problem," says Dana Thomas, fashion writer and author of Deluxe: How Luxury Lost Its Lustre.

"In the late 19th-century cheap copies of a checked and striped Louis Vuitton trunk prompted the company to introduce its now signature LV trademark with Japanese floral symbols, which was much more difficult to copy.

"Over the years fashion trademarks have become increasingly used as marketing tools. Today it's the brand rather than the product which has become the object of public desire. However, when marketing men successfully created a buzz around certain labels, unfortunately they not only failed to meet the demand which followed, but when the average consumer found they couldn't afford top end fashion lines, the countefeiters saw a gap in the market and stepped in.

"When copies of Gucci and Burberry began cropping up with a price tag of just five or 10 per cent of the real thing, the public's appetite was whetted. We started buying and just couldn't stop."

The first real evidence of mass counterfeiting began to spring up in the 1970s and 80s, but most of the major companies turned a blind eye to the cheap copies which could never hope to live up to the real thing.

However, the fakers soon began using increasingly sophisticated methods and by the time many of fashion's insiders woke up to the growing problem, organised gangs had a firm grip on a lucrative industry and weren't about to let go.

"Just as consumers, no longer satisfied with cheap handbags and perfume, began demanding goods they could pass off as genuine, China was becoming the world's manufacturing centre," says Dana. "Those two things collided and gave birth to a new class of entrepreneurs who saw counterfeiting as a viable business."

While inevitably the gangs behind the major counterfeiting operations are shrouded in secrecy, even conservative estimates of the economic and social effect are stark.

Since 1993 counterfeiting has increased by 1,700 per cent and fake goods account for seven per cent of today's global trade, the equivalent of $600bn.

"Fashion is one of the most popular sectors because it is easy and cheap to copy and even easier to sell," adds Dana.

"Counterfeiting costs the fashion industry up to $9.2bn a year. It is now a global racket often run by violent syndicates that also deal in drugs, guns, child prostitution, human trafficking and terrorism,

"The repercussions are far more sinister than most people can even imagine. The FBI believe the terrorists behind the 1993 World Trade Centre bombing were in part financed by the sale of the counterfeit T-shirts and profits from similar scams have gone to organisations like Hezbollah, Northern Ireland paramilitary groups and Colombia's main rebel army."

Many countries are now attempting to crack down on the problem with those found in possession of fake goods facing fines and prison sentences, but without greater public awareness the counterfeiters have little reason to stop.

"Shoppers have to be aware of whose pockets they are lining when they buy fake goods and we have to take the problem into our own hands."