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COVID-19 ISO Insights

Distribution of Counterfeit Medical Goods are Surging Amid Equipment Shortage

April 20, 2020

By: David Geller, CPCU

With a reported shortage in masks and other accessories that could help reduce the spread of COVID-19, it appears that scams to exploit this gap in supply are proliferating.

The Wall Street Journal has reported that thousands of accounts have been created on Instagram, a popular social media platform, to sell medical safety masks “that could be a health risk.”

The WSJ article cites a study completed by Ghost Data, an independent social-media research firm, that concluded, in part, the following:

  • Around 10,450 accounts on Instagram have emerged in the past few months that purport to sell these masks.
  • These masks reportedly have no guarantees to be genuine or safe.
  • The prevalence of these attempts on Instagram could potentially be due to vetting standards that the platform conducts on users.

Of note, the WSJ article mentions that this report came on the heels of Facebook, Instagram’s parent company, banning any advertisement or listing involving a medical face mask. These accounts, per the article, might be able to avert oversight by posting on live video, or a feature called Stories, in which content disappears within 24 hours.

An article from Lexology provides some additional context into the sale of this counterfeit material. Per the article, Operation Pangaea XIII, which is “the annual global operation co-ordinated between regulators and police and law enforcement bodies in 90 countries, tackling the illegal online sale of medicines and medical devices”, conducted its work in March this year. Per Lexology, here are some of the findings:

  • Over 34,000 unlicensed and fake products were seized. These fabricated products were reportedly advertised as 'corona spray', 'coronavirus medicines' or, 'coronaviruses packages.'
  • 870,000 doses of unlicensed medicines were found in just the United Kingdom.
  • 1,000 social media advertisements and 300 websites that were illegally offering medicine were taken down.

As evidenced by the annual work involved in Operation Pangaea XIII, counterfeit medical goods is an issue that predates the COVID-19 outbreak. However, it appears that the current urgent need for medical equipment, lack of supply that befits this demand, and seemingly infinite mediums to advertise goods on the Internet has exacerbated these problems.

Some Hospitals are Receiving Equipment that Doesn’t Work

It appears that hospitals themselves are falling prey to some of these schemes. A separate Wall Street Journal report states that, perhaps in a move of desperation to protect staff, hospitals are procuring masks from “smaller producers and shadowy middlemen” that are, in part, fabricating “proof of verification” certificates as they sell masks to hospitals. A president of a hospital system based in Missouri told the WSJ that they are “getting lots of ‘guy who knows a guy’ stories” in attempts to secure the right equipment.

The result, per the article, is the importing of N95 masks that are failing quality tests, which could leave doctors and other health professionals exposed to COVID-19 as they treat patients.

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