Protect Yourself From Counterfeits: What You Should Know

A Q&A with Eaton’s Tom Grace about the dangers of counterfeit electrical equipment and components.

Counterfeit equipment and components continue to flood into the North American supply chain. From an industrial perspective, the problems this situation poses for plants and facilities, as well as for the end-users of products manufactured in those operations, can be catastrophic. Using counterfeit electrical products can result in a higher risk for failure or malfunction. Such failures may result in electrical shock, overheating or short circuits, leading to equipment failure, fires or explosions that can cost workers their lives and cause considerable property damage.

Unfortunately, the dangers that these unsafe products present are an issue for personnel across all industry sectors. Preventing harm to people and property from counterfeits continues to call for strong, multi-pronged efforts. We all have roles to play.

For an update on this critical issue and tips on how maintenance and reliability professionals can address it, Maintenance Technology’s Managing Editor Jane Alexander sat down with Tom Grace of Eaton.

What is the state of counterfeiting today?

TG: The counterfeiting of well-known brands and products is a growing, worldwide issue, estimated at up to 7% of world trade, or nearly $1.77 trillion in 2015. This includes consumer safety and electrical products that can have threatening implications for workers and facilities.

In 2013, more than $1.7 billion worth of counterfeit consumer safety and critical technology products were seized by U.S. Customs and Border Protection (cbp.gov). Over the last five years, counterfeit seizures have seen nearly 50% annual growth. Furthermore, the International-Anti-Counterfeiting Coalition (iacc.org) estimates that the counterfeiting of distinguished brands costs U.S. industries $250 billion annually and may result in as many as 750,000 lost jobs every year.

What types of dangers do counterfeit electrical products present?

TG: Aside from the significant and ever-increasing economic consequences, counterfeiting can compromise a brand’s reputation and system reliability, as well as have a negative impact on public safety. By definition, a counterfeit is a product, product package or service that uses, without authorization, the trademark, service mark or copyright of another, with the intent to deceive prospective customers into believing that the product or service is genuine. This makes detecting the difference between a counterfeit and authentic product very difficult.

Counterfeit electrical products, many of which are intended to serve as protective devices, are unsafe lookalikes. Such counterfeits, including circuit breakers, ground-fault and arc-fault interrupters and surge protectors, are often duplicated without regard for electrical safety or minimal performance specifications.

Counterfeit electrical products also present serious legal and perception implications that can create problems for individuals involved in the procuring, design and installation of the electrical product and its environment. In the event that a counterfeit electrical product causes harm to an individual or property, investigation and litigation can take much longer to complete than the 24-hour news cycle allows, potentially damaging brand reputation and the bottom lines of companies associated with the product.

What is being done to combat the problem?

TG: Many companies are leading efforts to protect public safety by collaborating with industry partners to prevent these dangerous counterfeits from causing harm to people and property. Some companies operate with zero-tolerance policies against counterfeiting and are committed to anti-counterfeiting technologies and programs.

Industry organizations are also working to combat counterfeiting. Organizations such as the National Electrical Manufacturer’s Association (nema.org) enable member companies in the electrical industry to focus their collective efforts on identifying ways to stop counterfeiting. Industry representation by NEMA can be used to promote laws, regulations or government directives.

Other industry organizations, including the Electrical Safety Foundation International (esfi.org), rely on engagement from the electrical industry and supporters to promote consumer awareness of counterfeit electrical products. These collaborative efforts carry a stronger message and can help improve awareness and detection. To address the problem of counterfeit electrical products meaningfully, further collaboration is needed across industries and beyond.

Stopping the sale of counterfeit products is everyone’s responsibility. If every individual along a product’s supply chain played an active role in stopping the buying and selling of counterfeit products, the demand for counterfeit electrical products would decrease. It is crucial to continue to work together to prevent these unsafe counterfeit products from causing harm to people and property.

How do counterfeit products enter the marketplace?

TG: Counterfeiters rely on deception and below-market-level prices to find their way into the marketplace. In addition, counterfeit manufacturers are becoming more and more sophisticated in their production of unsafe lookalike products, making it extremely difficult to tell the difference between a counterfeit and an authentic product.

The sophistication of shipping counterfeit products is also adding to the difficulty of detection. A counterfeit shipment takes an indirect shipping route to the intended destination. In some instances, counterfeit products and other infringing components are shipped separately, further increasing the difficulty of detection.

The sheer number of imported products is also alarming. In 2013, 11 million shipping containers and 250 million air shipments of counterfeit products were accounted for being imported into the U.S. In addition, counterfeiters have reduced the size of a shipment to decrease losses if a shipment is seized. Due to these counterfeiting practices, deceptive manufacturers can easily circulate potentially dangerous products throughout the marketplace.

What can industry professionals do to avoid counterfeits?

TG: Recognizing a counterfeit product is difficult at first glance, but there are several ways to detect and avoid them prior to making an actual purchase. By following these tips, end-users are more likely to identify and avoid counterfeits:

Buy authentic. The best way to avoid counterfeit electrical products is to purchase products directly from the manufacturer’s authorized distributors or resellers. The risk of obtaining a counterfeit rises if one cannot trace the path of commerce to the original manufacturer.

Scrutinize labels and packaging. Be skeptical of poor-quality labels with legacy branding, missing date codes and extraneous markings, or labeling not applied by an original manufacturer. For easier identification, some companies use branded packaging on their component products.

Question bargains. When shopping for electrical products, look for red flags that could signify if an item or distributor should be avoided. The first is associated with “bargains” that seem too good to be true. Compare the price of that product to the price of a similar product at a different retailer. If it seems too good to be true, it probably is.

Verify authenticity. When possible, use tools provided by the original manufacturer or certification organization to verify that electrical products are genuine.

What should maintenance and reliability pros do if they come across counterfeits in the field?

TG: If a suspect product is found in the field, contact the original manufacturer. This allows for product verification and ensures that the potentially dangerous product is removed from the marketplace. The more information a manufacturer has, the better chance it can find similar counterfeit products and remove them from the marketplace to protect consumers.

When reporting potentially dangerous products, work to disclose the product vendor’s name, business name, address, domain name and any other identifiers. It’s also helpful to share a description of the commodity, including an explanation on why it is suspected to be counterfeit. If contact information is unavailable, don’t stop: Contact the National Intellectual Property Rights Coordination Center (iprcenter.gov; IPRCenter@dhs.gov or 866-IPR-2060), which will disseminate the information for an appropriate response.

It is also beneficial to establish a company-wide process for reporting counterfeit electrical products. This provides a collaborative outlet for alerting fellow workers and protecting your property. MT

3 Tips: How You Can Help Combat Counterfeits

To stay protected from unsafe lookalikes and help combat this industry-wide problem, Tom Grace encourages maintenance and reliability professionals to keep the following anti-counterfeiting tips in mind, and share them with others in their operations. These pointers can help personnel build confidence in their ability to properly avoid, identify and report fake products:

Know that counterfeits are hard to spot.
Counterfeit product manufacturers rely on deception, the Internet and prices below market level to find their way into our homes, businesses and facilities. The more sophisticated counterfeiters become, the more difficult counterfeit products are to identify.

The best way to avoid counterfeit electrical products is to purchase products from the manufacturer’s authorized distributors or resellers. The risk of obtaining a counterfeit rises if one cannot trace the path of commerce to the original manufacturer.

Know your resources.
Take advantage of the resources available surrounding counterfeiting. Many companies are leading efforts to protect public health and safety by providing tools, tips and information to help professionals avoid coming into contact with hazardous electrical devices.

Know how to report a counterfeit.
If you identify a counterfeit in the field, report it to the brand owner. This will allow authentication of the suspect product and ensure its removal from the marketplace.