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The Real Cost of Counterfeit Electrical Products

Employees in dark roomThe growing threat of counterfeit electrical products has prompted manufacturers and trade associations to pay close attention to counterfeits in the industry marketplace. According to the Department of Homeland Security, in 2012 alone there were over 3,400 seizures of “Consumer Safety and Critical Technology” products, which accounted for more than $146 million.

Consumers run many risks when using counterfeit electrical products, including product malfunctions or failures, serious bodily injury, and even death. Product failures can cause unplanned outages or event significant property damage. The potential damages of counterfeit products create financial and legal liabilities that not only affect the customer, but also facility managers responsible for the code regulations of the building and the safety of its inhabitants.

In order to find out exactly what that means for facility managers, I reached out to Paul A. Kempf, senior director of utilities and maintenance at the University of Notre Dame, to share his experiences with counterfeit electrical products.

Have you ever encountered a suspect counterfeit or gray market product out in the field?

Use of such products is forbidden in the industries I have worked in, including in the university setting. Their use would not only be a dangerous violation of specifications, but would be damaging to my professional reputation. I am not willing to take that kind of risk for any savings in cost. Working the last quarter of a century at an institution that emphasizes safety, reliability and uptime, along with my own convictions, has led me to only use products in which I have a high degree of confidence. This has spared me from the drawbacks and risks of using counterfeit products. I have heard of other facilities that have not been so lucky and dared to chance the use of gray market, used, or counterfeit electrical components.

Committing to only using authentic products in which you have a high degree of confidence is a great first step. How do you avoid purchasing counterfeit products?

We deal directly with manufacturers and authorized distributors. Knowing with whom you are dealing, and that they are connected to a proper supply chain is a strong assurance of genuine products.

We also are an active customer that participates in specification, direct purchase, and project management, including the commissioning of our equipment and systems. By maintaining active participation in all phases of a project, we are able to keep a close watch on the quality of labor and material used to construct our projects. Testing products prior to relying on them for service also helps to find any lower level counterfeit products. For critical assemblies and components, factory visits and acceptance testing also provides a higher degree of confidence.

There are a number of ways counterfeit products could end up in a facility, but it is typically due to poor specification of acceptable products, poor oversight by the owner, or suppliers who lack the integrity to ensure they are providing quality materials.

From speaking with industry professionals across the country, it is often the promise of a great deal or discount that attracts purchasers to products that end up being counterfeit. Why are you, as a facility manager, committed to avoiding these products, despite these discounts?

Counterfeit products expose their users to safety risks; they are unreliable and can result in loss of revenue. The lack of product quality assurance, testing, and standards certification make their use a gamble at best. In a time where downtime, reliability, and worker safety are of paramount importance, the threat from inferior products is not a risk worth taking. It is also worth noting that if there are any issues with a product, chances are there is no warranty or recourse once you discover it is counterfeit.

Any savings that gray market or counterfeit products may offer are far outweighed by the risks. If the pricing is too good to be true, then more often than not something is wrong. Facility managers need to be cautious and know whom they are dealing with when purchasing products and ensure they have the ability to support the products both financially and technically.

Stopping the sale of counterfeit products is everyone’s responsibility – manufacturers, distributors, resellers, contractors, facility managers, and customers alike. You should always purchase products from an authorized representative or distributor of the manufacturer. There is a higher risk of receiving a counterfeit product if you cannot trace the path of commerce to the original manufacturer.

By Tom Grace, brand protection manager at Eaton’s Electrical Sector Americas. For more information about counterfeit materials, visit

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