Counterfeits Can Kill: How Online Purchases Can Lead to Real-World Dangers

By Chuck Ross | May 15, 2019
Counterfeit Electrical Products




Scouring the internet for the best product pricing has become a way of life for most of us. Search, click, submit a credit card number—how many times have you run through that cycle in the last week or month, perhaps even for electrical products intended for a customer installation? When the package arrives a few days later, do you check the labeling or certifications? If not, that circuit breaker or lighting fixture could put you and your customer at risk.

You might think years of electrical contracting experience have given you the eagle eyes necessary to identify fakes when you see them, but the enormous number of counterfeit products on the market illustrates how frequently frauds are accepted as the real thing.

In 2017, authorities around the world seized more than 2.2 million products bearing counterfeit Underwriters Laboratories (UL) labels. The top four products recovered in those raids were power supplies, batteries, surface-mounted luminaires and cord sets—products electrical contractors work with every day. And, more frequently these days, such products are coming to market through individual online orders, rather than bulk shipments.

“Years ago, the main focus was the big containers coming into port, but the game has changed,” said Jason Daniels, UL’s senior investigation manager. “Seizures in ports have decreased. There are more products available online, so we have to focus our efforts on the online marketplace.”

A challenge for contractors who are trying to steer clear of these products is that the products, themselves, might not be fakes. Instead, manufacturers say, they’re more frequently real products that have been fraudulently labeled or packaged. So, unlike cheaply made clothing or jewelry knockoffs, counterfeit electrical products might actually have been manufactured by the labeled manufacturer but not for the labeled purpose or installation size.

“It’s primarily taking existing products in the marketplace and then relabeling it with specifications it didn’t have when it first left the factory,” said Tom Grace, brand protection manager with Eaton Corp.

This might include taking a product with a European IEC rating and relabeling it with counterfeit NEMA or CSA markings.

Molded case circuit breakers are the most frequently counterfeited products from both Eaton's and Siemens' catalogs.

“It might be manufactured by Eaton but not intended for the U.S. market,” Grace said.

Another common counterfeiting tactic is mixing and matching product components so exteriors look legitimate, but actual functionality is compromised.

“More people are remanufacturing products with the cover of one product and the base of a different product,” Grace said. “That includes changing the amperage of the product,” so a 20-ampere (A) breaker might be packaged into a case labeled for 30A service.

Burke Hunsaker, senior director of Siemens’ electronics and components business, also sees illegal product remarketing as the biggest counterfeiting issue now troubling electrical manufacturers.

“We’ve seen water-damaged breakers and breakers that have had short-circuit events,” he said. “It’s a safety device, and when an owner is expecting a level of protection, there’s no warranty for performance and the damage can be catastrophic.”

While UL’s biggest seizures are more for directly consumer-facing products, both Grace and Hunsaker see circuit breakers—specifically molded-case circuit breakers—as the most frequently counterfeited products from their own catalogs. These devices offer protection at higher amperages than residential miniature breakers for use in many commercial and light industrial applications.

“They’re bigger and more expensive,” Hunsaker said. “That seems to be where these counterfeiters and gray marketers are putting their attention.”

The phrase “gray market” turns up a lot in these conversations about counterfeit electrical products. Hunsaker defines it as any unauthorized channel to a customer or end-user, and he gave the example of breaker brokers who set themselves up as resellers. Among the products you might see offered by these suppliers are breakers described as “refurbished” or “recertified.” Such descriptions should be immediate red flags to potential purchasers, he said.

“There’s no such thing as a recertified circuit breaker because there’s no UL label for that,” he said.

Learn what to look for

Underwriters Laboratories (UL) has developed a list of tips electrical contractors can use to help spot fake products. Take an extra minute or two to look over your next electrical-product purchase—especially if it’s from an online retailer you haven’t used before—with these signs of counterfeiting in mind. Report any suspicious products directly to the manufacturer.

- References to UL on the carton or product but no other company name or trademark

- Low-quality workmanship and/or packaging marks with the letters “UL” side by side, instead of staggered, a lack of control or issue number, or the words “Approved” or “Pending,” instead of “LISTED” or “CLASSIFIED”

- Grammatical or spelling errors on the packaging

- The lack of a manual, safety warning sheets or other documentation in the packaging with the product

- The lack of a toll-free number or other manufacturer contact information in the packaging

Identifying and tracking down counterfeit products is labor-intensive. Internationally, UL engaged in 1,348 separate investigations in 2017, including almost 200 investigations of online retail activities and more than 800 customs actions. Daniels said UL’s agents have learned counterfeiting activities are global in scope.

“Asia is what comes to mind first, but we see stuff being made in the U.S.,” he said, adding that UL works closely with Chinese customs officials to target counterfeit products before they leave that country’s ports. “We’re able to identify products that are going to be exported all over the world.”

Investigators get their tips from a variety of sources, including consumer complaints, local law enforcement officials and their own internal market surveillance group. Separately, manufacturers also have teams that track products branded with their own labels.

“We actually monitor e-commerce sites and make blind purchases from resellers to monitor products in the marketplace,” Grace said, describing one of Eaton’s brand-protection tactics. “I think it would be a standard practice for any manufacturer.”

Eaton also is working toward a tracking system for every product it manufactures and recently introduced a mobile-device app that enables customers to scan UPC and QR codes on packaging to determine product authenticity. Grace said the plan is to expand this identification capability using laser-etched serial numbers on products. Beyond providing assurance that an individual circuit breaker is authentic, the system is hoped to eventually tie all product data, including warranties and manuals, to the scannable product codes.

“We’re trying to think what that future might be,” he said, “to get all the information you might otherwise need to make a phone call for—or have to check the manual.”

Hunsaker said Siemens has boosted its investigations over the last year in an effort to get ahead of counterfeiters before their products hit the market.

“We were more reactive than proactive,” he said. “Now we’re more on the offense than defense. The Siemens brand and the entire industry was being sullied because these breakers won’t perform as needed.”

And this isn’t a problem experts see being solved in the near term. Instead, their intent is to stay at least a step ahead of fraudulent-product marketers as the sophistication of both their own products and counterfeiters’ capabilities move forward.

“As the market continues to increase, we believe this issue will also increase because of the incentives,” Hunsaker said. “And, as manufacturers use advanced technology today to make better circuit breakers, that same technology can be used by counterfeiters to make better counterfeits.”

About The Author

ROSS has covered building and energy technologies and electric-utility business issues for more than 25 years. Contact him at [email protected].






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