Proforma Safety Blog

When An ‘Incredibly Good’ Deal Goes Bad

Posted by proforma on March 19, 2011

When we’re purchasing electronics, appliances, toys, or other consumer items, we take for granted that the UL, ETL, CE or other “certification marks” are evidence that someone has tested the product and found it meets acceptable standards. These marks can be easily falsified, however, leading the uninformed and unaware to risk personal injury or loss. Welcome to the growing counterfeiting industry.

Not only consumer goods are faked; steel and electronic components, electrical parts and plumbing are just a few of the industrial applications being targeted. The major source of counterfeits is reputed to be China, but this is becoming a homegrown U.S. industry as well. In 2008, two Tomball, Texas residents pleaded guilty to selling substandard pipe couplings with a fake API monogram to oil and gas companies. (Read Hot Commodities on the ENG website.)

The implications for business extend beyond direct involvement in fraudulent manufacture; a compromised supply chain can introduce faulty components. The closer the supplier is to the end of the “supply chain,” the higher the liability. For example, installing a counterfeit product can result in your company being held liable for personal damages. (Read Counterfeits Can Kill.)

Underwriters Labs periodically issues Public Notices on counterfeit products that are being sold for consumer or industrial use that claim the UL certification. UL offers information to help with identifying counterfeit UL marks. Another registrar, Intertek Group, offers this informative brochure explaining the various certification marks and when they are used.

Fake designer clothing may not harm you, but a substandard power tool or electrical item can. In one tragic instance, a family traveling to Thailand bought an electrical cord locally for their son who had forgotten his Gameboy recharger. The faulty knockoff electrocuted the child. Recently Intertek warned consumers purchasing electrical goods online to be wary of counterfeits, citing examples of home appliances and laptop chargers without fuses that could result in fires.

When it comes to electronics, markets are awash in counterfeits with false marks. In some instances, the problem arises when the brand manufacturer doesn’t exercise appropriate process in choosing authorized manufacturing partners and unintentionally includes faulty components in its products.

In our eagerness to implement “green” programs to recycle tech products, we’ve created a new opportunity for counterfeiters who file off marks or other identifying information from components and send them back out into the market. Greenpeace estimates 50 -80 percent of the e-waste collected for recycling in the U.S. is exported to developing countries where lack of regulation is prevalent.

The U.S. and other countries have been pressuring countries like China to crack down on counterfeiters; China recently announced the arrest of 3,001 persons for counterfeiting medicines, electric appliances and mobile phones, some under the Nokia and Apple brand names.

The U.S. Chamber of Commerce has formed the Global Intellectual Property Center to address these thefts. A broad-based business coalition, the Coalition Against Counterfeiting and Piracy (CACP), now boasts 700 members.

The European Union (EU) is strengthening the CE mark (read details here) and is joining forces with the U.S. in launching a new website, the TransAtlantic IPR Portal, that will offer guidance to companies that want to conduct business in other countries.

As countries, governments and industry associations increase their efforts to combat counterfeiting, consumers are warned to avoid the obvious — if it looks incredibly cheap, it probably is counterfeit. (Caveat: counterfeiters are now selling their products at high prices to “fool” buyers into thinking they’re legitimate products.) If there’s no certification mark; if the mark is on the packaging only, or it’s lacking a bar code, avoid buying the item. Lack of contact information or appropriate documentation may also indicate a counterfeit. Beware of brokers; buy goods only from authorized dealers or brand owners. Many manufacturers are now using digital certificates and signatures to authenticate component parts.