Group Keeps an Eye on Counterfeit Products

October 9, 2006
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Doug Geralde of CSA Group Audits and Investigation Team gave a presentation on counterfeit products being imported into the North American market.

CHARLOTTETOWN, PEI - Global counterfeiting accounts for 5-7 percent of world trade or $500 billion annually. Counterfeiting grows 20-25 percent a year compared to 3 percent economic growth.

Those were startling statistics quoted by Doug Geralde of the CSA Group Audits and Investigation Team based in Toronto. Geralde was speaking to seminar attendees at the Heating, Refrigeration and Air Conditioning Institute of Canada (HRAI)'s 38th Annual Meeting.

His group investigates many counterfeit products coming from China and other countries that have a history of copying legitimate product designs and manufacturing cheap knockoffs, then importing them to North America. The new global economy is to blame, according to Geralde.

"With globalization, essentially everything is being counterfeited," he said. "It used to be products like Gucci bags or Rolex watches, but not any more. "Counterfeiters have an established infrastructure and the process has gone high tech. It is so lucrative and big that it now involves organized crime."

The implications of counterfeiting include: safety issues, product liability, poor product performance, and loss of revenue.

Geralde said that although his group has not investigated any counterfeit HVAC equipment, he believes some have made their way into the market and have been passed off as products of poor quality control rather than counterfeit products. He noted that counterfeit HVAC products can be a real problem because of the impact on safety issues.

"Standards are written with safety as a goal and knockoffs threaten safety," Geralde said.

His group, CSA, maintains a zero tolerance policy toward any unauthorized use of the CSA trademark on packaging or products. He noted that CSA trademarks must appear on both the packaging and product. Counterfeiters sometimes put the bogus trademark on the product and not the package.

And the problem is compounded by where counterfeit products are found- in mom and pop stores as well as on the shelves of major retailers. Geralde showed examples of some of the products that CSA has investigated, including an electrical power strip with three-prong (grounded) receptacles using a two-prong plug.

Another example was an electrical extension cord with 26 gauge copper wire instead of conventional 16 gauge. The high cost of copper may have been the reason for the switch. The wires were so thin that they only held a minimal charge and soon overheated.

"Counterfeiters try very hard with cosmetics- making the product look as real as possible," Geralde said. But in the haste to make things look real, counterfeiters often copy a package many times, producing multiple labels with identical serial numbers.

"The ‘just-in-time' philosophy today is very conducive to counterfeiting," he said. "Retailers need products to fill up their shelves."

Publication date: 10/09/2006

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