What's worse - people KNOWING their bag is fake or NOT KNOWING?

Knowing...
And again when you have a nice friend or family member who genuinely tell you how happy they are they got a perfect fake copy of a LV, Chloé, etc...what do you answer ?? me , nothing, I just smile....
Again I think you can excuse and understand when it's teenagers who are craving for labels/status labels, and obviously don't have the money for it.....but when it's a mature woman with income, that's just looks bad on her...