China flooding Britain with fake stamps in act of ‘economic warfare’

A mock-up of a counterfeit stamp

China is behind the scourge of counterfeit stamps flooding Britain and landing victims with £5 penalties, The Telegraph understands.

Sources close to Royal Mail said that forgeries from the Communist country were behind a rise in complaints that letters sent with stamps bought from legitimate stores were being flagged as fraudulent.

Security experts and MPs described the mass forgery as an “act of economic warfare” and akin to “printing counterfeit money”.

It is understood that the convincing forgeries are being bought unwittingly by small retailers, who are not required to buy stamps directly from Royal Mail and can instead source them from wholesalers in bulk.

It comes after the Royal Mail last week launched a review into its new barcoded stamps amid fears customers are wrongly being forced to pay £5 to collect letters.

Post Office minister Kevin Hollinrake said he expects Royal Mail to investigate how the counterfeit stamps from China entered the supply chain and were being sold in shops.

Royal Mail insists its systems are not faulty – meaning any stamps flagged as counterfeit are likely to be fakes from China.

A Telegraph investigation identified four major Chinese suppliers offering to print up to one million counterfeit Royal Mail stamps a week for as little as 4p each – and deliver them to Britain within days.

The stamps are also being sold through online retail giants such as Amazon and eBay – and on websites that mimic the official Royal Mail store.

A senior figure at Royal Mail admitted to BBC One’s Watchdog that he could not spot the difference between a counterfeit and a genuine stamp.

David Gold, director of external affairs and policy, said: “The reality is counterfeiters are now so good at what they do that even I, and I work for Royal Mail, I can’t tell the difference just by looking at them.”

Security experts have warned that the mass fraud is “economic warfare” done with the “tacit approval” of the Chinese Communist Party.

The postal workers union CWU has also said that the “scam on an unprecedented scale” had resulted in a rise in aggression against its members and risked further damage to the Post Office brand following the Horizon computer scandal.

The Royal Mail introduced barcode stamps in 2022 in an effort to put a stop to forgeries that were costing the postal service tens of millions of pounds every year.

The barcodes are scanned when post arrives at sorting offices and suspicious stamps are then inspected by staff who then declare if the stamp is genuine or fake. Stamp fraud has since fallen 90pc.

Royal Mail insists genuine stamps will never be marked as counterfeit, unlike those printed in China.

The Government last month revealed that China was behind a cyber attack on the Electoral Commission that compromised the data of 40 million voters, and concern in Whitehall that China was behind social media attacks on the Princess of Wales.

Official Royal Mail stamps have been printed by the same family business in Wolverhampton for the past decade. However, more than 8,000 miles away, one factory in China’s third largest city, Shenzhen, claims it employs 39 members of staff and can produce up to one million per week.

Another company in the port city of Quanzhou, in south east China, is selling sheets of 50 first class large barcoded stamps. The listing describes the fake stamps as “mint, new and read [sic] for posting”.

The biggest supplier identified is based in Shanghai. It has numerous listings for different types of barcoded stamps including stamps featuring King Charles first released last March and older iterations which feature the late Queen.

The minimum purchase order is 20,000 stamps which are sold at $0.20 (£0.15) per stamp. However, for orders above 300,000, each stamp costs just $0.05 (£0.04) – representing a 3,275pc markup if it was sold at the Royal Mail retail price of £1.35.

The price of a first class stamp in Britain has doubled since March 2019 when it was just 67p. Since then, there have been seven price rises, culminating in last week’s rise to £1.35 for a first class stamp and 85p for a second class stamp.

Royal Mail said it believes sheets of genuine stamps, which can only be bought and sold in Britain, are being sent to China where they are then copied repeatedly to produce counterfeits in vast quantities. The forgeries are then sent to Britain where they are sold to unsuspecting retailers and consumers.

Alan Mendoza, founder of national security think tank the Henry Jackson Society, said the mass production of forged stamps damaged the British economy by “robbing businesses of revenue”.

He said: “It is inconceivable that a large-scale counterfeit operation like this could be occurring without the knowledge and therefore tacit approval of the Chinese Communist Party given its strict control over the Chinese economy. As such, it’s an obvious form of economic warfare and should be called out for what it is with economic repercussions for China if it does not rein it in.”

South Thanet MP Craig Mackinlay accidentally bought counterfeit stamps on Amazon last year.  The Conservative MP raised in Parliament last May, accusing Amazon of “facilitating the sale of counterfeit postage stamps from China” that were “virtually perfect except for the barcode”.

He said he had raised the “serious matter” with the National Crime Agency and Trading Standards but “received woeful responses”.

Royal Mail says it has taken down more than 300 suspicious listings in the past year including on Amazon and eBay.

Amazon says it continues to collaborate with Royal Mail to “improve proactive detection mechanisms” as well as UK law enforcement to protect customers from “those attempting to abuse our store”.

Yet The Telegraph found numerous suspicious listings on Amazon – all of which had reviews claiming the stamps were fraudulent and left recipients with £5 fines.

There are also counterfeit stamp listings on eBay with one detailing in the product description that it was manufactured in China.

An eBay spokesman said: “The sale of counterfeit items is strictly prohibited on eBay and we proactively block millions of counterfeit items every year.”

Sir Iain Duncan Smith, the former Conservative leader, called for a criminal investigation and said forging stamps needed to be treated with the same severity as counterfeiting money.

He said: “Criminal law is very clear about this and I don’t understand why the police are not cracking down. The law is there to be used and these people are counterfeiters and they are as bad as counterfeiting money so treat them in the same way.”

He urged the Government to take a firmer stand against China, adding: “We have to ensure we deal with this in a way that tells the Chinese ‘enough is enough’ and we should be saying to the Chinese embassy, ‘why aren’t you cracking down on this?’. Because the more this goes on, the more it undermines the very nature of law and order in the UK.”

Conservative MP Bob Seely said: “It is pretty appalling. It is incredibly brazen and it begs the question what are the Chinese authorities doing about this and why aren’t they cracking down, unless this is yet more undeclared conflict against the West.”

“China allows [this criminality] because it damages our society and it damages our institutions and this is yet another example of that.”

Tom Keatinge, of defence and security think tank The Royal United Services Institute, said while he believed it was more likely a Chinese organised crime group has “identified a vulnerability” in our stamps, the “acid test will be how the Chinese state responds to this information being brought to their attention”.

China is also believed to be behind a rise in counterfeit stamps that have infiltrated the United States Postal Service (USPS). Last February, USPS warned the public to be “alert” to a rise in counterfeit stamps being sold online. In one case, US border protection seized $2.5m (£1.9m) worth of counterfeit stamps that had come from China.

The USPS now reserves the right to open and destroy any post that has been sent using counterfeit postage.

But the union that represents postmasters and postmen in the UK has warned Royal Mail not to go down a similar path.

Andy Furey, of the Communication Workers Union, said post workers were facing a rise in aggression after the fake stamp penalty was increased from £2.50 to £5 last October.

He said: “This appears to be a scam on quite an unprecedented scale and it’s not good for postal workers who are knocking on people’s doors saying ‘we are going to surcharge you because this stamp is counterfeit’.

“Royal Mail has an obligation not to penalise the customer and to stop it at source and get it sorted rather than pass the burden of the blame to the customer.

“There is a sense of inertia about this from Royal Mail. I wonder if they are in denial about the scale of this [scam] and they are hoping it goes away.”

The union leader said the prevalence of fake stamps now risked further undermining trust in postmasters after some people claimed stamps bought at Post Offices had been flagged as counterfeit.

He said: “It’s important that the Post Office is a go to destination for customers to buy stamps, books and packs, we don’t like any bad or negative publicity around this where people are starting to question the brand [the Post Office] or the legitimacy of what they are spending their money on. We are deeply perturbed by this and we think Royal Mail has been too slow to react.”

A Royal Mail spokesman said: “We are working hard to remove counterfeit stamps from circulation. We regularly monitor online marketplaces to detect suspicious activity, such as sales of heavily discounted stamps and work closely with retailers and law enforcement agencies to identify those who produce counterfeit stamps.

“We work closely with a number of police forces across the country to apprehend offenders and search premises. In recent cases we have recovered stamps with a retail value of over £250,000.”

Have you bought a counterfeit stamp from a Post Office? Email [email protected]

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