Chapter Corner

Deadly Deals: Counterfeits Can Kill

Posted in: Features, September/October 2014

For many, the word “counterfeit” conjures images of knock-offpurses and imitation currency. But counterfeiters are opportunistic and have evolved to target industries that can yield the most profit. In response to growing demands and new innovation, the electrical industry has been booming and has also become vulnerable to counterfeiting syndicates. Counterfeiters hope to capitalize on this growing customer base by providinglow-cost impersonations of legitimate products. Regardless of whether they are bought knowingly or unwittingly, counterfeit electrical products pose a uniquely dangerous hazard. It is critical that the public is aware of the potentially deadly effects of these products and also how to identify and report them before they can infiltrate the supply chain.

Modern life has become increasingly reliant on electricity and electrical products. In fact, the average American home now has more TVs than people, according to Nielsen Media Research. Each new “must have” gadget creates a new opportunity for counterfeit products to prey on those looking for the cheapest deal. In 2010, 470,000 counterfeit smartphone batteries were recalled because they overheated causing fire and burn hazards. Counterfeit electrical products do not undergo testing to ensure they comply with performance and safety regulations, which make them a true threat to public health and safety. Counterfeiters illegally use the brand, logo, or markings of trusted manufacturers and nationally recognized testing laboratories to dupe customers into purchasing these dangerous products. With the increasing reliance on cell phones and other consumer electrical products comes the need for multiple batteries and chargers, making off-priced counterfeits an attractive option.

However, the problem of counterfeits isn’t limited to consumer products. In 2014, the Electrical Safety Foundation International (ESFI) surveyed more than 900 electrical contractors, inspectors, manufacturers, and distributors and found that lighting and breakers were the most frequently encountered counterfeit electrical products. One-third of the survey respondents reported an encounter with a counterfeit electrical product, and more alarmingly, they also reported discovering an average of five counterfeits within the last 12 months. Beyond safety, the impact of using counterfeit electrical products in building or renovation projects poses serious liability implications and other business repercussions.

Consider Context

There are some contexts where encounters with counterfeit products are unsurprising, such as street markets and vendors. But as the level of detail among imitation products becomes more sophisticated, so, too, does their distribution. The International Anti-Counterfeiting Coalition (IACC) estimates that the prevalence of counterfeit products has increased over 10,000 percent in the past two decades. The onus is on the buyer to scrutinize the seller and its products to be sure they are purchasing legitimate products. Price should not be the only consideration. In fact, it often provides the easiest indicator by which a counterfeit product can be identified. The old adage holds true, “If it’s too good to be true, it usually is.”

Similarly, consider the surroundings during the point of purchase. You likely wouldn’t buy a phone charger from a store that has it placed on the same shelf as the toothpaste. This would raise some suspicions about the validity of the retailer and also the product. Also, keep an eye out for typos and grammatical errors on product packaging, as they are common characteristics of counterfeit products. The value of the legitimate supply channel cannot be overstated. Choose only to do business with trusted retailers who receive authentic products from reliable distributors sourced by recognized manufacturers. There is no better defense against counterfeit products.

Not surprisingly, the internet is becoming the go-to place to make purchases of all kinds. As a result, online sales of counterfeit products are expected to soon surpass the volume sold in physical markets. The same scrutiny should be applied to websites and online vendors. The multitude of websites offering the lowest price do not offer guarantees, warranties, or other safeguards the legitimate supply channel could provide in the event of product malfunction or worse.

How To Protect Yourself

Luckily, there is a lot that can be done to protect yourself and your clients from counterfeit electrical products. If you suspect a product is counterfeit you should immediately stop using it. You should also check with the U.S. Consumer Product Safety Commission (CPSC) for any recalls. The CPSC, in cooperation with the brand in question, will issue recalls when there are confirmed incidents of counterfeiting associated with the product. Independent testing laboratories, such as Underwriters Laboratories, Intertek, and Canadian Standards Association, also post information about confirmed reports of counterfeit products bearing their certification marks. However, if your suspected counterfeit is not listed, you should still contact the product manufacturer and report your concerns. If the product in question bears a certification mark from a testing laboratory, you should also report it to them. Lastly, you should also file a claim with the National Intellectual Property Rights Coordination Center, the U.S. government’s clearinghouse for investigations into counterfeiting and piracy. In some instances the product in question is replaced or reimbursed by the manufacturer.

Despite their disastrous potential, there is a striking level of disparity between the high rates of awareness about the counterfeiting issue in the electrical industry and the action taken to help combat the problem. While more than 95 percent of respondents in ESFI’s survey believed counterfeit electrical products were at least a moderate threat to public health and safety, over half felt their company did not provide adequate training about the issues related to counterfeits. In fact, 75 percent of contractors answered “No” to the question, “Do you or your employer have a process in place through which to report counterfeits in the event they are discovered?” Lastly, of those who reported having discovered a counterfeit on the job, only half reported it to the manufacturer, testing laboratory, or the government. A collaborative effort by all sectors of the electrical industry and the public is critical to help reduce the pervasiveness of counterfeit electrical products.

ESFI has launched its anti-counterfeitingprogram, “Zero Tolerance for Counterfeits,” which provides additional information, tips, and other tools at no cost on its website to educate and enhance awareness of counterfeit electrical products among the public and industry stakeholders.

Brett Brenner is the President of the Electrical Safety Foundation International, a non-profit dedicated to promoting electrical safety at home and in the workplace through education, awareness, and advocacy.

Tom Grace is the Brand Protection Manager at IEC National Platinum Partner Eaton, leading the organization’s anti-counterfeiting efforts.