Speed and Transparency Combat Product Fraud

Michael Gannon of 3M tells DAC Management's Phil Groves how the multinational has protected product integrity during the COVID-19 pandemic

Respirator fraud during the COVID-19 pandemic was the main topic of conversation at Modern Counsel’s December 10, 2020, event, “Partner for Success: Protecting IP in China.”

The event was held in partnership with DAC Management. DAC Management President Phil Groves interviewed 3M Senior Trademark Counsel Michael Gannon, who principally works with the company’s personal safety division. Gannon specifically spoke to the issues the company faced when its N95 respirators became the target of fraud.

Below are some key takeaways from their conversation.

DAC Management President Phil Groves (left) interviewed 3M Senior Trademark Counsel Michael Gannon (right) about the issues 3M faced when its N95 respirators became the target of fraud during the COVID-19 pandemic.

Early Action

3M noticed a spike in fraudulent activity within the first couple of months of the pandemic’s inception. The company specifically saw fraud in the respirator marketplace, and this fraud consisted of a “complete outright impersonation” of the company that saw the use of fraudulent domain names, websites, social media presences, and more, Gannon said.

This prompted 3M to set up a telephone-based COVID fraud reporting facility. The company also scaled and enhanced “robust online monitoring systems to detect and take down illicit activity,” Gannon said.

“Over the course of the last nine, ten months, through those actions, we’ve taken down more than three hundred fraudulent 3M domain names,” Gannon continued. “Combined, it’s somewhere approaching thirty thousand illicit social media presences and online marketplace listings for either counterfeit product or other kinds of fraudulent listings [that we’ve taken down].”

Transparency Is Key

In an effort to battle fraud, 3M has taken unprecedented steps in terms of company transparency and distributor communication to make sure distributors can easily know what a legitimate respirator transaction looks like, Gannon said. He noted that distributors are strongly encouraged to avoid anything that does not resemble a legitimate transaction. He also commented that this issue will not go away anytime soon, nor will it go away when a COVID-19 vaccine hits the marketplace.

“We’ve been really trying to lean into these messages as a company to protect the consuming public from the illicit deals,” he explained. “We just make it very, very clear how we do business— and how we will continue to do business and supply respirators as the rest of this unfolds.”

Working with Resource Limitations

3M must prioritize which actions to take when a fraud issue does not involve health risks, Gannon said. The company also works closely with national and global law enforcement partners to help determine which cases 3M will target for civil action and which ones will be handled by partners.

“We have very direct access to the Department of Justice’s task force on COVID fraud,” Gannon said. “We speak with them multiple times a week. There have been lots of engagements with state attorneys general, as you might imagine. And there have been very deep engagements with CBP [US Customs and Border Protection], HSI [Homeland Security Investigations], all manner of other federal agency offices of inspector general who have been involved in investigating these kinds of cases.”

He added, “We’re being very transparent and open with lots of law enforcement partners about these matters so that we get their assistance in the right kind of cases.”

For more insights, watch the full event coverage and subscribe to Modern Counsel’s YouTube channel.