Los Angeles Electricians On Alert for Counterfeit Products

September 18, 2009 3:29 PM CDT
Electrical industry warns contractors to watch for counterfeit products
by Brian Johnson Staff Writer

Electrical contractors throughout the country may be shocked to learn that some of the products they’re installing may be bad imitations of the real thing.

Counterfeit electrical products — including circuit breakers used in residential and commercial construction — are increasingly making their way into the U.S., creating safety hazards and putting businesses at risk, according to national experts.

Roughly 90 percent of the knockoff products are coming from China, where enforcement against such activity has been lax at best. The National Electrical Contractors Association, which has been crusading against the influx of bogus products, said it’s a “$20 billion annual crime.”

Importation of counterfeit items — from bogus hand bags to fake designer watches — has long been a concern.

But the problem has reached “epic proportions” in the $130 billion electrical industry, NECA officials said. The organization cites a U.S. Customs report, which shows that seizures of counterfeit electrical products were up 43 percent from 2007 to 2008.

John Maisel, publisher of NECA’s Electrical Contractor magazine, has spearheaded a national Anti-Counterfeit Products Initiative. Participants include NECA, Underwriters Laboratory (UL), the National Electrical Manufacturers Association, and Illinois-based Schneider Electric, among other organizations.
“Electrical products counterfeiting is a huge issue,” Maisel said in a phone interview.

“Probably the most dangerous aspects of this crime are safety of electrical workers and ultimately safety of the consumer. If you have a fake handbag your pride gets hurt. If a major electrical product fails, you could end up seriously injured.”

Not a problem here - yet

It’s a national problem, according to Maisel, who will deliver a speech on counterfeit electrical products at the Sept. 15 NECA Convention & Trade Show in Seattle.

However, at least one expert says it’s not a big concern in Minnesota — at least not yet.

Jeff Ohman, chapter manager of the Minneapolis chapter of NECA, said counterfeit products tend to be more of an issue in areas hit by natural disasters, where buildings and infrastructure need to be rebuilt in a hurry.

“In the Twin Cities, we have yet to see it hit, which is fine with us,” Ohman said. “We are not immune to those issues, but it doesn’t seem to have made any inroads up here yet.”

Still, Ohman says it’s important for contractors to get their supplies from reliable sources.

“I have experienced myself what I call fly-by-night suppliers, making a cold call from another part of the country, wanting to sell you electrical materials, circuit breakers, switch gears, things like that,” Ohman said.

“On the other hand, I don’t think a lot of our contractors make those purchases over the phone. They are used to dealing through reputable supply firms. … If you deal directly, like a lot of our members do, with established supply houses in the area … I think you are going to be better off.”

Maisel warns contractors that they can be on the hook for hefty fines and criminal penalties if they install an unsafe product that causes injury or property damage. Contractors could be held liable for anything from negligence to breach of contract.

Education is key

It’s easy to be fooled, because counterfeiters have become increasingly savvy and sophisticated. Besides copying the product itself, disreputable suppliers are using fake UL labels, designs and packaging, experts say.

Another red flag: inordinately low cost.

“We all look for bargains,” Maisel said. “And that sort of thing [unusually low cost] — I would say that probably could be a significant driver. If it is really, really cheap, it could be for a reason.”

Maisel advises contractors to watch out for things like misspelled words on the packaging or subtle differences in the label or design.

“One thing is to educate the field staff, field electricians, as to what to look for,” he added. “They are the last people to touch these products before they go into the building.”

Schneider Electric, which has its North American headquarters in Palatine, Ill., is among the industry leaders in fighting counterfeit products.

The company speaks from experience. In July, a jury found an Indiana firm guilty of purchasing and selling counterfeit versions of a trademarked Schneider circuit breaker obtained from two unauthorized suppliers.

According to a company press release, the lawsuit and similar efforts have “kept more than 250,000 potentially hazardous counterfeit goods out of the marketplace.”

Schneider officials have seen bogus circuit breakers that have improper materials, erratic tripping mechanisms, lack of thermal adjustment and arc chamber insulation, and inadequate short circuit rating, among other shortcomings.

Tracey Garner, manager of Schneider’s anti-counterfeiting division, said the company has seen “quite a few” counterfeit operations in the past few years.

After getting into the discovery process of its civil litigation, Schneider followed the trail to other companies and ultimately filed 13 different lawsuits, according to Garner.

In an investigation related to one of Schneider’s civil lawsuits, she said, authorities recovered $1 million worth of counterfeit electrical products from a single warehouse.

“That was just lucky we got to the warehouse before they got the opportunity to sell it,” Garner said. “It is definitely a multi-million [problem]. We are just one manufacturer. Across the country, it has to be pretty significant.”