Fight the fakes

Counterfeit electrical products may be available at cheap prices but they not only pose a great health and safety risk, they also erode the market share of genuine manufacturers. And that’s not all. The contractors buying or installing a counterfeit electrical product could be fined, lose their licence or possibly be put behind bars.

In 2009-10, Customs and Border Protection made 3775 seizures of suspected counterfeit or pirated goods as against 2158 in 2008-09. According to a research paper - by Tim Wilson, Director, Intellectual Property and Free Trade Unit and researcher Jordan Shopov - titled ‘Why Australia should adopt the AntiCounterfeiting Trade Agreement’, counterfeit and pirated goods undermine innovative activity, market competition, national unemployment and economic growth. The paper states that overall, counterfeiting and piracy destabilises international security and costs the global economy an estimated US$250bn a year.

In the electrical industry, circuit breakers, power tools, and switches are few of the most popular items that lure counterfeiters, says Theisz, Managing Director and Owner of Certification Body Australia.

There are very real risks you take when buying products that don’t comply, warns Gary Busbridge, Standardisation Manager, Clipsal. “The unwise use of such a product could lead to fines, loss of electrical licence, loss of credibility, loss of your business and possibly jail.”

“These days, there are many new channels to buy electrical products. In addition, there are many more brands selling similar electrical products. In addition to well-known, reputable wholesalers, there are now alternative ways of purchasing products - either from rogue wholesalers or from websites. Whilst buying these cheap products may seem like a bargain at the time, they could pose serious risks to you, your business and, most importantly, your customers,” Busbridge notes.

“There is often a reason those products are so cheap. Many of them are direct copies of a reputable manufacturer’s products. And potentially, they don’t comply with Australian Electrical Safety Standards. They could also be breaking copyright design or patent trademarks.”

In the article below, Busbridge highlights the risks of buying and installing electrical products that are not standards compliant.

What are the risks?

When you buy cheap products you don’t generally expect them to perform as well, or last as long. Now that’s okay if it’s a $20 jumper you’ve just bought and can throw away when it’s worn out. But when we are talking about electrical products, you are placing other people’s lives and property at serious risk. Not to mention your business, your livelihood and your reputation.

So what happens if that cheap product fails once it’s already been installed and causes damage to property or, much worse, hurts someone? Who exactly is liable? Well, that’s when it starts getting tricky.

Who takes responsibility?

If the products you have bought don’t comply with Australian Standards, then ultimately you would assume the manufacturer should be liable. However, this is not always the case. Under Australian Electrical Safety Law, whoever imports the product is legally recognised as the distributor of the product. As such, they are also liable should a product fail or cause harm.

So if the manufacturer has brought the goods into the country, they will ultimately be responsible. Alternatively, the wholesaler will bear that responsibility if they imported the goods. This is why it’s so important to buy from a wholesaler and manufacturer you can trust, because if the product fails, they will be there to assist you.

If you buy products from a rogue wholesaler, can you trust them to take responsibility?

If you purchase online, direct from overseas, you will be considered 100% liable as you will be the ‘distributor’ of the product. So you will be forced to take full responsibility. Is the two dollars you save now really worth the potential of thousands of dollars later?

What do you risk?

The legal risks of buying products that don’t comply to Australian Electrical Safety Standards include severe financial penalties, potential criminal charges and possible loss of your electrical licence. Further, products that don’t comply with Australian Electrical Standards will invalidate your insurance cover. This could result in further civil action and direct monetary costs for damages.

If you install goods that counterfeit a trademark design or patent, you will be infringing intellectual property rights. This could result in legal action, including a maximum jail sentence of up to two years and/or a fine of up to $55,000. It’s not only ‘extreme’ consequences that you face. You may think you have saved money buying cheap products, but when the products fail, you are responsible for replacements. Also consider the amount of time you could spend replacing the products - every hour you spend fixing faulty products for free means an hour of uncharged labour which you could have been charging for, at another job.

And then there is your hard-earned reputation. Customers lose faith in your workmanship because your products keep failing. Your reputation suffers and you could lose valued customers as a result. Do you really want to be known as a cheap but unreliable electrician?

So while there are very short-term savings in buying cheap, inferior products that may not comply, they will potentially cost you a great deal more. In the long run, it may end up reducing your profit margin.

Who do you trust?

There are two key things to remember when buying electrical products. Firstly, always buy them through a wholesaler you trust. Secondly, make sure you buy renowned brands that have a reputation for genuine, quality products. By doing these two key things you will avoid the risks.

Trusted wholesalers provide you with much more than just convenient access to electrical products. They also help you learn about new products, tips, tricks and they will even provide help with your cash flow by offering accounts for your purchases. They are there to help you build your business longer term.

Reputable manufacturers offer more than just good products. They continuously strive to develop new products, often by listening to your product feedback. They spend millions on research and development and engineering to continuously innovate and develop new technologies. They also put money back into the Australian economy by employing and manufacturing locally.

These manufacturers want to build a relationship with you and support you with sales, warranties and after-sales service networks. Some manufacturers even offer training and development opportunities to further your knowledge.

Below are some key ways to identify products that don’t comply:

• Don’t have certification marks
• Difficult to insert plugs into socket outlets
• Difficult to activate switches
• Breakages in product upon removal from packaging
• Poor installation advice
• Damaged when installing product
• Incorrect spelling of words on product, packaging or instructions