Suspect, counterfeit and fraudulent electrical–targeting authenticity

by Tom Grace, Eaton Corp.

Manufacturers and trade associations have devoted much attention to the effects of counterfeit electrical products on consumers.

Utility executives and managers should be mindful of the dire consequences of using inferior goods marked deceptively under brand names of reputable companies.

Counterfeit electrical products occupy second place after pharmaceuticals in the number of intellectual property rights seizures.

According to the Department of Homeland Security, consumer safety and critical technology seizures increased 44 percent, and the value of these seizures rose 41 percent from 2010 to 2011.

Examples of components known to be counterfeit are fuses, cables and circuit breakers, but nothing is safe from counterfeiting.

Dangers of Counterfeit Electrical Products

Safety. In many instances, counterfeit products appear to be genuine but they are unable to meet minimum performance specifications.

Manufacturers of counterfeit products often use inferior materials without regard for meeting published ratings or safety.

These knockoffs consistently fail independent certification testing from organizations such as Underwriters Laboratories (UL).

Instead, counterfeit product manufacturers rely on deception and prices below market level to find their way into our homes, businesses and electrical infrastructure.

Counterfeit circuit breakers can result in product malfunctions or failures and also can cause serious bodily injury including electric shock, electrocution and death.

Counterfeit circuit breakers also are capable of significant property damage.

Circuit breakers are designed to provide circuit protection for power distribution systems and to safeguard people and equipment. A breaker failure means the loss of production, possible equipment damage necessitating costly system analysis and replacement and the increased risk of worker injury at the time of failure or maintenance.

The financial liability of such an incident will fall on those who participated in the supply and distribution of the counterfeit products.

Unexpected costs. In addition to safety, counterfeit electrical products can add costs in purchasing.

If a buyer shops on price alone without regard to traceability of the product or the nature of the channel from which it was purchased, it is only later in the procurement process that issues can even be identified.

These issues can cause delays during shutdowns or significantly increase the costs of the products because of short-term delivery requirements or expediting freight and shipping.

Other serious financial implications. If the safety hazards and financial liability posed by counterfeit products fail to attract your attention, the economic consequences should.

This includes layoffs as a result of unfair competition and reduced customs and sales tax revenues, resulting in greater financial burdens for businesses and individuals.

Worldwide, counterfeiting costs the electrical products industry $600 billion annually. In the U.S. that figure is $200 billion to $250 billion.

Because of the revenue stolen from lawful companies, counterfeiting reduces U.S. employment by 750,000 jobs each year, according to the International AntiCounterfeiting Coalition.

Combatting Counterfeiting

Stopping the sale of counterfeit products is everyone’s responsibility. This includes manufacturers, distributors, resellers (authorized and unauthorized), governments and customers alike. As the last step in the supply chain, customers can help combat counterfeiting by educating themselves on how to identify a counterfeit electrical product and avoiding the purchase of those items.

The first step in identifying a counterfeit electrical product is to recognize that they are difficult to identify.

Can you tell which circuit breaker is counterfeit? The answer is at the end of this article.

Many counterfeit products are hard to detect because they contain a trademark or service mark of a genuine brand or use the appearance of a well-recognized article, which might not include the tags or labels.

The photo above shows an example of a counterfeit circuit breaker with a genuine circuit breaker. Can you tell which is the counterfeit? The answer is at the end of this article.

Purchasing Tips

To avoid these safety hazards and unnecessary costs, know how to spot a counterfeit electrical product at the beginning of the purchasing process. The following tips will help purchasing decision-makers become more confident their facilities are free of counterfeit products.

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

2. Verify authentication. When possible, use tools provided by the original manufacturer or certification organizations to verify electrical products are authentic. This can be done while purchasing or for products already owned. Eaton’s new Circuit Breaker Authentication (CBA) tool allows customers to detect if Eaton molded circuit breakers (MCCBs) up to 400 amperes are counterfeit. By entering the bar code, part number and date code found on the circuit breaker, the CBA tool is intended to immediately verify authentication.

3. Scrutinize labels and packaging. When purchasing an electronic product, check for certification marks from organizations that certify the quality and performance of electrical products. Avoid products that lack an identifying branding label or affiliation. Be leery of additional markings or labeling not applied by the original manufactures with missing or poor-quality labels, out-of-date product codes and unauthentic packaging. As counterfeiters become more sophisticated, counterfeit products become even more difficult to detect this way and create an increasing need for additional scrutiny.

4. Avoid “bargains.” When shopping for electrical products, avoid bargains that seem too good to be true. Compare the price of products to similar products at different retailers. If they seem too good to be true, the odds are they are.

5. Pay close attention to products purchased. Quality control often is lacking in counterfeiting operations, so you might be able to spot a counterfeit based on its workmanship. If a product is purchased habitually, compare the quality and price of that product at a different retailer. Be cautious of products that seem flimsy or are made poorly.

6. Make sure everything that should be there is there. Counterfeit products often don’t include supplementary materials such as owners manuals or product registration cards. Sometimes counterfeiters do not include all parts that should come with the product or some parts are from different manufacturers.

7. Report suspected counterfeits. If a product is suspected to be counterfeit, contact the brand owner. This will allow authentication of the suspect product and ensure the potentially unsafe product is removed from the marketplace.

Collaboration Efforts

If every utility executive and purchasing manager followed these tips, the demand for counterfeit electrical products would decrease. As mentioned, to stop counterfeit electrical products, collaboration will be key.

Many companies are leading initiatives to protect public health and safety and collaborate with industry partners globally to prevent unsafe counterfeit products from harming people and property.

For example, Eaton’s electrical business adopted a strict policy for counterfeiting and is committed to anticounterfeiting technologies and programs. Slowing the proliferation of counterfeit products can help ensure maximum electrical safety levels for consumers.

Industry organizations such as the Electric Power Research Institute (EPRI) actively engage the electric utility industry to promote awareness of suspect, counterfeit and fraudulent equipment, including counterfeit electrical products.

These collaborative efforts carry a stronger message and improve awareness and detection dramatically.

Targeting Authenticity

Counterfeit electrical products are a danger to our safety, businesses and economy, and collaboration is the key to combatting it. The counterfeiting industry is overwhelming, but that’s no reason to give up and let it continue.

When possible, purchase electrical products from authorized representatives or distributors of genuine manufacturers.

Remember the circuit breaker photos? The physical differences between the two circuit breakers are nearly undetectable, but Eaton’s CBA tool alerts users that the circuit breaker on the right is the fake.

Try it yourself by entering the highlighted information into the authentication tool at http://eaton.com/counterfeit.

Author

Tom Grace is brand protection manager for Eaton Corp.’s electrical sector, where he oversees counterfeit awareness, training and prevention. This involves building awareness of the risks counterfeit electrical products present to personal safety and the economy with end customers, contractors, inspectors and electrical resellers.

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