Counterfeit Products Create Hazards for Electrical Industry
Contributed by Tom Grace
Manager of Anti-Counterfeiting Initiatives
Eaton Corporation
The electrical industry continues to promote programs that focus on the dangers of counterfeit electrical products and the effects such products have on consumers. The risks a counterfeit product presents, and the dire consequences of using these inferior products, should be of utmost importance to everyone who works in the electrical industry. These counterfeits, including illegally manufactured copies or modified genuine goods, are deceptively sold under brand names of reputable companies. Regardless of the origin, counterfeit products pose genuine threats to customers and the industry as a whole.
The electrical industry, including manufacturers, distributors, consultants, engineers and electricians, must work together to eliminate the risks of counterfeit products.
Counterfeit electrical products designed to distribute or protect electrical loads can overheat, short circuit, or fail to operate properly, which could lead to fires, electrocution or explosions. The counterfeit electrical products tested have been found to fail even basic tests required for safe operation. This creates a health and safety risk for people and the potential to produce considerable property damage.
Counterfeit products have an impact beyond health and safety. They threaten jobs, create unfair competition and result in lost revenues. The International Anti-Counterfeiting Coalition estimates that counterfeiting has caused legitimate companies to reduce U.S. employment by 750,000 jobs a year.
Eaton Corporation, a diversified power management company, is one company taking on counterfeiting. Eaton has implemented a zero tolerance anti-counterfeiting strategy that incorporates education and awareness, partnerships with industry and law enforcement, and product technology enhancements intended to detect and prevent counterfeiting. Eaton has established a Global Task Force to ensure the anti-counterfeiting initiatives reach across global markets and coordinate these programs and best practices. The task force develops programs and methods to influence and train customs groups, law enforcement, resellers and customers.
Tom Grace, manager of Anti-Counterfeiting Initiatives at Eaton, shares background information and insights on avoiding counterfeit electrical products.
Why do we see a proliferation of counterfeit electrical products?
The high demand for electrical products combined with economic pressure to reduce cost has led customers to go outside of traditional manufacturing and distribution channels. To meet this demand for low price products, illicit manufacturers often misrepresent counterfeit goods as genuine. The customer may unknowingly be buying and using, or reselling, counterfeit products. There are others, however, who are knowingly trading in counterfeit goods driven only by greed and the low risk of being caught or prosecuted.
What types of electrical products are commonly counterfeited?
The most commonly counterfeited items tend to be commodities such as batteries, extension cords, surge protective strips, receptacles, switches, and even holiday lighting. Other items known to be counterfeited include control relays, molded case circuit breakers, miniature (residential and industrial) circuit breakers, ground fault circuit interrupters, conduit fittings and ground rods.
What kinds of safety problems can result from using counterfeit products?
Rarely is a counterfeit made to the specifications of the original manufacturer. The use of lesser grade, lower cost materials, or materials not suited for an application, can lead to failure. This could have dire consequences in the case of circuit protective devices such as circuit breakers or ground fault interrupters. There is also the potential for considerable property damage if an electrical fault is not properly interrupted. All forms of counterfeiting are unacceptable, but electrical product counterfeiting has dangerous implications for the industry and the public.
What are the economic consequences of using counterfeit products?
The International Anti-Counterfeiting Coalition estimates that counterfeiting is $600 billion global industry. In the United State alone, that figure is $200-$250 billion. Counterfeiting also has a negative effect on the economy. It is estimated that as many as 750,000 jobs are lost in the U.S. due to the impact of lost revenues. Counterfeit products also reduce customs and sales tax revenues that result in greater financial burdens for businesses and individuals.
Where are most counterfeit products made?
The seizure statistics published for fiscal year 2009 by the U.S. Customs and Border Protection reports nearly 80 percent of counterfeit seizures originated in China. It’s important to note that counterfeit products are being imported into other regions without detection. This includes Africa, Latin America, the Middle East and Asia.
How difficult is it to spot a counterfeit?
The counterfeits may have missing or poor-quality labels, out-of-date product codes and packaging, and markings that legitimate manufacturers don’t use. As the counterfeiters become more sophisticated the suspect product has become more difficult to detect.
What can one do to protect themselves from purchasing counterfeit products?
The key is to purchase through an authorized retailer whenever possible. Authorized retailers ensure genuine products are being purchased because of their relationship with the manufacturer. This also provides a “chain of commerce” to the original manufacturer. Always use caution when dealing with online brokers and resellers and avoid “bargains” that seem too good to be true.
What should be done if a product is suspected to be counterfeit?
If a product is suspected of being counterfeit, we recommend that customers contact the original manufacturer or brand owner. This will allow authentication of the suspect product and ensure that the potentially unsafe product is removed from the marketplace.
How effective is the U.S. Government at stopping counterfeit products from entering the country?
For fiscal year 2009, the U.S. Customs and Border Protection made 14,841 seizures valued at $260.7 million. The seizure of electrical products accounted for $4.3 million of counterfeits seized.
Have there been any recent successes in stopping counterfeit products from entering the market?
In just the first four months of this year investigations and raids in China resulted in the seizure of 788,000 counterfeit electrical products on behalf of a number of brand owners including Eaton. In the past 10 years these anti-counterfeiting operations have seized more than 12 million counterfeit electrical components and devices.
Whose responsibility is it to stop the sale of counterfeit products?
The responsibility to stop counterfeiting lies with everyone. The manufacturers and brand holders, the certification industry, resellers, consumers, law enforcement and governments must work together to prevent these unsafe products from entering the supply chain and causing harm to people and property.
