Dangerous Fakes

2. Dangerous Products – Types of Risks

As indicated earlier, the overall, precise magnitude and scope of counterfeiting are unknown; assessments of the impact of substandard products on the health and safety of consumers thus relies heavily on anecdotal evidence. The anecdotal information, while imperfect, nevertheless provides useful insights into the serious risks that counterfeits can and have posed. The purpose of this section is to provide illustrations of the effects, across a broad range of products.

For analytical purposes, the damaging impacts of counterfeiting were classified into four areas: effects on (i) health, (ii) safety, (iii) environment and (iv) personal security.

Importantly, many dangerous products pose several risks at the same time. For example, a counterfeit pesticide can be harmful to the environment while at the same time posing health risks to people; fake spare parts (e.g. car battery) can pose safety and environmental risk; and a counterfeit medical device can pose both safety and health threats.

In addition, the presence of dangerous counterfeit products also damage the value of the brand and image of the producers of genuine products over time. For instance, those consumers who believed they were buying a genuine article when they in fact were buying a fake will be likely to blame the manufacturer of the genuine product if the fake did not fulfil expectations, thus creating a loss of goodwill. If consumers never discovered that they had been deceived they may be reluctant to buy another product from that manufacturer and may communicate the information to other potential buyers. Effects of this sort were reported to several surveys along the lines of “erosion of company name” or “destruction of brand reputation”. Such indications came from respondents across numerous sectors including consumer electronics, information and computers, electrical equipment, food and drink, luxury goods, sportswear, automotive spare parts & car accessories and pharmaceuticals.

Effects on health

Counterfeit food, beverages, pharmaceuticals and related personal care items which have been improperly formulated or which contain ingredients that are harmful can have effects ranging from mild inconveniences to consumers, to life-threatening situations. Moreover, in the case of pharmaceuticals, the lack of active ingredients can deprive consumers of the possibility to treat diseases effectively, thus prolonging illnesses that would otherwise be treatable.

Pharmaceuticals

Substandard counterfeit medicines can affect individuals directly in a variety of ways, including: i) the adverse effects of incorrect active ingredients, ii) failure to cure or prevent future disease, thereby increasing mortality, morbidity and the prevalence of disease and iii) contributing to the progression of antimicrobial resistance and drug-resistant infections (WHO, 2017[9]). Moreover, the existence of ineffectual or dangerous counterfeits can contribute to a loss of confidence in health care professionals, health programmes and health systems, which can further undermine the well-being of persons.

WHO estimates indicate that between 72 000 and 169 000 children may die from pneumonia every year after receiving counterfeit drugs, and that fake anti-malarial medication might be responsible for an additional 116 000 deaths (WHO, 2017[9]). The effects on children can be alarming. One study of malaria-positive children in 39 sub-Saharan countries estimated that 120 000 children under five years of age died because of use of low-quality anti-malarials, including counterfeit and substandard products (Renschler et al., 2015[10]). Another study on the health consequences of falsified medicines analysed 48 incidents in which falsified medicines caused serious adverse effects to patients. These incidents involved approximately 7 200 casualties, including 3 604 deaths (Rahman, 2018[11]). The results of the study indicate that a similar number of incidents affect developing and developed countries alike, and the counterfeiters target all types of medications.

Forensic tests of suspect samples performed by the pharmaceutical industry demonstrate that counterfeit medicines could cause harm to patients in 90% of the cases tested. While many incidences of patient harm will likely go undetected, numerous examples have nevertheless emerged.1 For example, a 2020 UK survey concludes that almost one-third (32%) of those who bought one or more counterfeit medicines experienced a health issue as a result.2 There are numerous other documented cases in which patients have died or suffered harm due to an online purchase. In 2013, for example, people died after taking a counterfeit diet pill bought through an online drug seller.3 The pill, sold as a weight loss aid through many illicit online pharmacies, contained BNP, which is also used in pesticides. Depending on the amount consumed, acute poisoning could occur with consumers. Reactions could include nausea, vomiting, restlessness, flushed skin, sweating, dizziness, headaches, rapid respiration and irregular heartbeat, possibly leading to coma and death.

Dangers have also surfaced with respect to counterfeit opioids, resulting in a safety alert being issued by the US Drug Enforcement Agency in September 2021.4 The alert cites a sharp increase in the availability of counterfeit prescription pills containing fentanyl and methamphetamine. The counterfeit pills, mass-produced by criminal drug networks, were deceptively marketed as legitimate prescription pills, killing unsuspecting Americans at an unprecedented rate. More than 9.5 million pills had been seized at the time of the alert. Laboratory testing revealed a dramatic rise in the number of counterfeit pills containing at least two milligrams of fentanyl, which is considered a lethal dose.

The challenges related to illicit trade in pharmaceuticals became more significant with the COVID-19 pandemic, which provided criminals that run illicit trade networks with new opportunities for profits. Broken supply chains, strong demand for medicines, personal protective equipment and tests, combined with limited capacities of law enforcement officials to intercept the counterfeit products, contributed to a reshaping of the market for illicit products. Criminals clearly took advantage of the global pandemic, with enforcement authorities reporting a sharp increase in seizures of fake and substandard medicines, test kits and personal protective equipment (PPEs) as well as other medical products. In addition, recently, instances of counterfeit COVID-19 vaccines have been reported, posing a serious threat to the vaccination programmes.

Alcohol

Alcohol is an attractive market for illicit trade, which includes counterfeit and unbranded, bootlegged products, as well as products which are smuggled from countries where taxation is low, to countries where high taxes are imposed to discourage consumption. The high retail prices for legitimate alcohol, which reflects the high taxes imposed, have created incentives and opportunities for counterfeiters and other criminal organisations to both i) smuggle genuine products and ii) produce and market substandard products clandestinely. The illegally produced products are sometimes made with lower priced ingredients. This has raised serious health concerns as the rogue producers may use lower-priced methanol in their products in lieu of highly taxed ethanol (Box 2.1) (Lachenmeier Dirk W. Maria Neufeld and Jürgen Rehm, 2021[12]). It is estimated that methanol has a strong link to morbidity and mortality results in several thousand deaths per year worldwide. In addition to death, methanol consumption can have other serious effects, including a decreased level of consciousness, poor or no coordination, vomiting, abdominal pain, and/or could cause permanent blindness due to the destruction of the optic nerve.

Box 2.1. Examples of methanol poisoning

A methanol-poisoning outbreak occurred in the Czech Republic in 2012 from counterfeit alcohol and resulted in 140 people suffering health damage and more than 50 deaths. The mass poisoning in the Czech Republic was associated with a significant decrease of health-related quality of life for the survivors, as well as to long-term costs for the healthcare system.

In Russia, 34 persons died from drinking illicit vodka containing methanol in October 2021, with another 25 hospitalized. Police investigation discovered a warehouse manufacturing plant in which over 600 litres of alcoholic spirits were seized, with a further 1,279 bottles of counterfeit alcohol discovered in the region affected by the contaminated alcohol during two days of widespread checks.

Sources: (Lachenmeier Dirk W. Maria Neufeld and Jürgen Rehm, 2021[12]) and www.brusselstimes.com/news/188971/counterfeit-alcohol-in-russia-claims-34-lives/.

Other potentially toxic ingredients found in illicit alcohol include formic acid, which is contained in some antiseptic medicinal products that people drink instead of alcohol (i.e. surrogate products) (Lachenmeier, Neufeld and Rehm, 2021). Formic acid can lead to exacerbation of the chronic effects of ethanol by contributing to an excessive buildup of acid in the body (metabolic acidosis). Some of the toxicological studies from Kazakhstan, Russia, and Ukraine indicate that patients treated for acute poisonings with surrogate alcohol also showed traces of methanol, isopropanol, acetone, fusel alcohols, bio-solvents, and unknown and unidentified alcohols.

Other contaminants found in illicit alcohol include aflatoxins (i.e. toxins produced by certain fungi that are found on agricultural crops such as maize, peanuts, cottonseed, and tree nuts), hydrocyanic acid (a highly poisonous hydrogen cyanide product), cyanide derivatives (including ethyl carbamate), heavy metal contamination (with lead, arsenic, or cadmium), and elevated levels of acetaldehyde (which might contribute to the carcinogenicity of ethanol) (Lachenmeier Dirk W. Maria Neufeld and Jürgen Rehm, 2021[12]).

Importantly, during the COVID-19 pandemic, additional volumes of illegal (including counterfeit) alcohol have entered markets through vulnerable supply chains, weak enforcement, and porous borders. Closures of some businesses and disruptions in transport methods have led to significant distortions in supply chains. These distortions have been generating both: excess supplies of goods (for example, in cases of closures in the HoReCa sector that did not need contracted alcohol anymore) and unsatisfied demand (in cases of limited access to existing suppliers). In all these cases, criminals exploited these opportunities for illicit profits. 

Cosmetics

Government and industry studies and testing have discovered that some of the ingredients that are used to produce counterfeit cosmetics and fragrances are dangerous. Such cosmetics often contain known carcinogens, such as arsenic, beryllium, and cadmium, along with high levels of aluminum and presence of microbiological contamination.5 Some of these products have caused acne, psoriasis, rashes, and eye infections. Counterfeit fragrances have been found to contain DEHP, classified by the US Environmental Protection Agency as a probable human carcinogen. These counterfeit perfumes and colognes, which sometimes contain urine, have been known to cause serious skin rashes.

In 2020, the Los Angeles Police Department raided the city’s Fashion District and seized USD 700,000 worth of counterfeit cosmetics. Tests revealed that the seized products, which included fake Anastasia, NARS, MAC, Urban Decay and Kylie Cosmetics, contained high levels of bacteria and animal waste (Holland, 2020[13]). In the United Kingdom, authorities uncovered hundreds of thousands of pounds worth of counterfeit beauty products in 2018.6 Use of the products risked chemical burns and skin rashes. Moreover, exposure to the mercury in the cosmetics could have toxic effects on the nervous system, digestive and immune systems, lungs, kidneys, skin and eyes. Some of the counterfeit seized by the authorities were also found to have illegal levels of the skin-whitening agent hydroquinone.

Toothpaste

In 2019, the Ministry of Health in Costa Rica, issued an alert indicating that two types of counterfeit toothpaste of a known brand were being sold on the market. Tests on seized products confirmed that the product contained diethylene glycol (DEG), which was not declared on the labeling and that could be harmful to health. DEG is a compound that is used as an antifreeze and sometimes as a glycerin replacement thickener; the legitimate producer, Colgate-Palmolive, indicated that it did not use it in its toothpaste. It is rapidly absorbed through the digestive and respiratory tract and by prolonged skin contact. Its use in cosmetic products is prohibited in the country.7

Counterfeit toothpaste of a well-known brand was also detected on the US market, in 2007. The FDA issued two alerts in that year, both indicating the presence of DEG in toothpaste that it tested, which included products indicating South Africa and China as the countries of manufacture.8 While the agency was not aware of any instances of poisonings from the toothpaste, it was concerned about potential risks from chronic exposure to DEG and exposure to DEG in certain populations, such as children and individuals with kidney or liver disease. DEG in toothpaste reportedly has a low but meaningful risk of toxicity and injury to these populations.

Contact lenses

A major online retailer of colored contact lenses in the United States pleaded guilty in 2016 to running an international operation importing counterfeit and misbranded contact lenses from suppliers in Asia and then selling them over the Internet without a prescription to tens of thousands of US customers.9 Such lenses are medical devices that must receive FDA authorization to enter the United States. After purchasing the lenses, many customers complained directly about their quality and questioned whether the contact lenses were genuine and FDA approved. The retailer admitted that some of the contact lenses he sold were tested and found to be contaminated with potentially hazardous bacteria. The case revealed that the retailer received at least USD 1.2 million in gross revenue from the illegal enterprise, including approximately USD 200,000 alone from the sale of counterfeit Ciba Vision FreshLook COLORBLENDS.

Effects on safety

Clandestinely produced, substandard counterfeit products raise serious safety concerns for a wide range of consumer products. Insights into the magnitude and scope of the problem can be obtained through the experience of Underwriters Laboratories (UL), which is an independent worldwide body that tests and certifies the safety of products. Once certified, tested products are entitled to bear a “UL” mark, which can be important for enhancing consumer confidence in the safety of the products concerned. This could be particularly important for lesser-known brands that have not established a reputation. The UL mark thus has considerable value, and counterfeiters have used it fraudulently to deceive consumers. In 2019, the company worked successfully with partners to remove 3.8 million counterfeit UL marked products from the market (UL, 2020[14]).

UL activities have also included efforts to disrupt fraudulent online trade. In 2019, UL’s Brand Protection team monitored websites for listings containing potentially dangerous products bearing counterfeit or unauthorized UL marks (UL, 2020[14]). Their efforts resulted in the removal of more than 86,873 listings in 25 economies,10 up from 8,370 on 2018. In 2020, UL launched an initiative to crack down on deceptive practices to combat fraudulent personal protective equipment (PPE). The organization’s brand protection team initially reviewed over 40,000 online supplier listings, preventing over 300 million deceptive products from entering the marketplace.11

Table 2.1 lists products that have been found in recent months by UL to bear a counterfeit (unauthorized) UL mark. The testing body recommends that many of the products be removed from service and/or be taken off the market in light of the potential safety risks, including fire and electric shock.

Table 2.1. Examples of unauthorized use of UL mark during 2020-22

Product	Date of notice	Note
Certain SAFT lithium/thionyl chloride batteries	01-2022	Batteries concerned are counterfeit. Unknown if any safety requirements met. UL recommends removal from market.
Certain ADVENTECH motors	10-2021	Unknown if any safety requirements met. UL recommends that product not be used.
Certain KARTAR fire sprinklers	09-2021	Unknown if any safety requirements met. UL recommends that product be removed from service.
Certain Ningbo Xuanhua extension cords	09-2021	Cords do not comply with safety standards. UL recommends that the product not be used.
Certain ABBOTECH wall outlets	08-2021	Outlets do not comply with safety standards. UL recommends that the product not be installed.
Hunan Aomeng electrical cords and appliance wiring material	06-2021	UL mark has not been authorized for these products. UL requests that it be contacted if products found on market.
Certain Love Attitude cleansing products	06-2021	Unknown of the products comply with any UL sustainability standards. UL recommends that products not be used.
Proextinseg fire extinguishers	04-2021	Extinguishers are counterfeit. Unknown if any safety requirements met. UL recommends that product not be used.
Certain Clariitonix communication cable	03-2021	Cable does not comply with safety standards. UL recommends that the cable not be used and be removed form service,
Certain LEMSIR portable energy-stored power packs	01-2021	Unknown if any safety requirements met. UL recommends that the products concerned not be used.
Certain eLink USB chargers	11-2020	Unknown if any safety requirements met. UL recommends that the products concerned not be used.
Certain pressure restricting valves from an unknown manufacturer	09-2020	Unknown if any safety requirements met. UL recommends that the products concerned be replaced.
Certain UNIIMAX e-scooters	07-2020	Unknown if any safety requirements met. UL recommends that products not be used.
Certain Songling cordless massagers	07-2020	Unknown if any safety requirements met. UL recommends that products not be used.
Certain Yeiser lead acid batteries	04-2020	Unknown if any safety requirements met. UL recommends that products not be used.

Source: (UL, n.d.[15]).

Following are specific examples of a range of counterfeit products that raised safety concerns in recent years.

Toys and children’s equipment

Counterfeit versions of popular toys are an ongoing problem, which is exacerbated during holiday periods when genuine products are often in short supply. The availability of lower priced alternatives on the Internet further complicates the situation, as buyers may be attracted to the lower prices, not knowing that the product they are buying is a fake, and could well be substandard and unsafe for children. L.O.L. dolls, for example, are highly popular toys which have been counterfeited with substandard products that contain phthalates, a chemical which can damage the liver, kidneys, lungs and reproductive system.12

In December 2018, a four-year-old boy broke fake Magformers magnetic building blocks and swallowed several loose magnets (Kent, 2020[16]). As the ingested magnets tried to connect to each other, they caused significant intestinal damage, resulting in hospitalization and surgery to repair and remove his damaged intestine. Genuine Magformers toys are subjected to regular safety testing to ensure the small magnets are encapsulated safely and will not come loose during play. This was not the case with the non-compliant product.

Magnets already have been flagged as an area of concern when used in toys in general (Frankel, 2019[17]). Rare-earth magnets are particularly dangerous because they can be 10 times stronger than the ordinary magnets. As mentioned above, multiple, small rare-earth magnets are swallowed, they can pull together inside the intestines, potentially causing life-threatening holes and blockages. Their use by counterfeiters, who are not likely to take adequate precautions, is therefore a major concern.

Counterfeit baby strollers have also raised safety concerns. In 2019, online advertisements for "4 in 1 Baby car seat and Stroller" falsely linked the product to a popular brand called Doona.13 The counterfeit, listed for USD 299, which was USD 200 cheaper than a genuine Doona. The counterfeit product broke into pieces and failed to meet even the most basic of safety standards set by US regulators in a 30 mile per hour crash test. The test indicated that a child could be put in grave danger, with potential injuries to the child’s chest, neck or head, which could result in a traumatic brain injury. The dummy used in the test fractured and slid forward along with plastic pieces that had broken off the car seat. In an identical crash test, the genuine Doona product met crash requirements and remained in one piece.

Recreational equipment

Hoverboards were a popular gift item in 2015. Many consumers, however, discovered that their hoverboards overheated, putting themselves and their homes at risk.14 In response, the US Consumer Product Safety Commission declared many hoverboards unsafe and recommended only the sale of hoverboards that met UL’s requirements (Box 2.2). This posed a challenge to many distributors holding large inventories of items that did not meet the requirements. In response, some elected to put a counterfeit UL mark on the items. In one instance, UL located an online business that was misusing the UL mark, resulting in the seizure of more than 4,800 counterfeit products.

Box 2.2. CPSC safety alert on hoverboards, 2017

“Since fall 2015, CPSC has led the way in warning the public about the dangers posed by hoverboards. CPSC is aware of more than 250 self-balancing scooter/hoverboard incidents related to fires or overheating. In March 2017, a 2-year-old girl and a 10-year-old girl died in a house fire ignited by a hoverboard in Harrisburg, Pennsylvania. In addition, CPSC has reports of 13 burn injuries, three smoke inhalation injuries and more than USD 4 million in property damage related to hoverboards.”

CPSC recommended that consumers take a number of steps to reduce the risk of fire, including purchasing only those items which were compliant with UL safety standards. The agency cautioned that hoverboards should never be purchased from a kiosk, a second-hand seller, or an online retailer without proof that the item was compliant with these standards.

Source: (CPSC, n.d.[18]).

Electrical and electronic equipment

Many types of electrical and electronic equipment have been counterfeited, some, like semiconductors, are used in a broad range of products that demand high performance, which is something that cheaply manufactured articles cannot achieve. Their incorporation into other products complicate their detection, with potentially serious consequences.

Semiconductors

The Covid pandemic disrupted supply chains and resulted in shortages in many products, including semiconductors.15 In response to shortages, hard-pressed suppliers and businesses explored new ways to meet their demand for the semiconductors, reaching beyond their traditional sources to meet demand. Increased sourcing of parts through non-traditional channels, such as the Internet, created new forms of risk as the situation provided opportunities for counterfeiters to infiltrate markets.

The risk that counterfeits pose to product safety are significant. While semiconductor companies invest heavily in developing, manufacturing, testing and supporting products that will operate at a high level and reliably, counterfeits are often “harvested” from electronic waste using crude and poorly-controlled processes that result in counterfeit semiconductors having far higher failure rates than genuine semiconductors.16 Some counterfeit semiconductors will reportedly fail immediately when electrically tested or first used, while others may fail shortly thereafter. The use of counterfeits has already been linked to a number of potentially life-threatening incidents, including:17

• Medical devices: A counterfeit semiconductor component was identified in an automated external defibrillator, resulting in a defibrillator over-voltage condition. Failure to detect and address this issue could have resulted in improper electrical shocks being applied to heart attack victims, thus jeopardizing their lives.

• Household appliances: A counterfeit semiconductor component caused a fire in the control circuitry in a vacuum cleaner for residential use. This fire was successfully contained, but it had the potential to result in major property damage or even loss of life.

• Air travel: A counterfeit semiconductor failed in a power supply used for airport landing lights. This did not result in any reported airline take-off or landing incidents, but the potential for such incidents was apparent.

Batteries

Lithium-ion batteries are becoming increasingly common, as their use in devices such as smartphones and tablets rise, along with increased use in power tools, lawn mowers and other yard devices, as well as toys (Box 2.3).18 The batteries, however, pose safety hazards that require the attention of consumers generally. The risk of harm, however, is magnified when the batteries are not manufactured and tested to ensure adherence to standards. Consumers thus need to be wary about purchasing unbranded batteries which may not have been thoroughly tested by independent testing bodies, but they must also be careful in purchasing certified, branded batteries as these batteries have been and continue to be counterfeited.

Box 2.3. Lithium battery safety concerns

Lithium cells and batteries power countless items that support everyday life from portable computers, cordless tools, mobile telephones, watches, to wheelchairs and motor vehicles. Our society has come to depend on lithium cells and batteries for an increasingly mobile lifestyle. Today's lithium cells and batteries are more energy dense than ever, bringing a steadily growing number of higher-powered devices to market.

The risks posed by lithium cells and batteries are generally a function of type, size, and chemistry. Lithium cells and batteries can present both chemical (e.g. corrosive or flammable electrolytes) and electrical hazards. Unlike standard alkaline batteries, most lithium batteries manufactured today contain a flammable electrolyte and have an incredibly high energy density. They can overheat and ignite under certain conditions, such as a short circuit or improper design or assembly. Once ignited, lithium cell and battery fires can be difficult to extinguish. Additional, although infrequent, events can result in lithium cells and batteries experiencing thermal runaway, a chain reaction leading to a violent release of stored energy and flammable gas. This thermal runaway can propagate to other batteries or conductive materials nearby, potentially resulting in large scale thermal events with severe consequences.

Source: PHMSA, 2021.

With respect to the nature of battery safety risks, counterfeit products may in particular be prone to failure and cause fires and explosions. They are typically produced by illegal enterprises, by manufacturers which typically lack the technical knowledge and understanding that are required for quality control, safety and shipping. Certifications are often falsified along with misleading performance claims, thereby compromising the safety of the lithium-ion products and eventually the devices that they are used in. High-quality components and safety mechanisms are needed in lithium-ion products for protection against off-nominal conditions.19 Overcharging, over discharging, extreme temperatures, and external or internal shorts are some of the off-nominal conditions that products may experience in use which may result in thermal runaway and fire.

Substandard counterfeit batteries may also affect the performance of the devices that they are used to power. Low quality products which have not been subject to rigorous controls are likely to affect the overall performance and safety of battery powered devices and appliances, affecting the uniformity of the cells inside a battery pack thereby making the battery management system complex or inoperable or in some cases the components that are used in the battery management system (BMS) may not be compatible with the charger or the application.

Lithium-ion products are considered dangerous goods and must be labeled as such when transported. Strict guidelines and restrictions must be followed and must meet UN test standards when being transported by air. Counterfeiters, however, may mislabel their products and not declare them as dangerous goods in order to avoid restrictions. Dropping such batteries during transportation may cause cells to undergo venting, thermal runaway, and fire. Incidents of fatal crashes and fires in airplanes have in fact been linked to cargoes containing undeclared lithium-ion products.

To help lower the risk of adverse events, the International Air Transport Association (IATA) has developed comprehensive risk assessment guidance for the aviation industry which provides concrete steps for evaluating the dangers inherent in transporting the batteries (IATA, 2021[19]). The guidance makes specific reference to the availability of lithium batteries which do not meet UN safety standards (which may be counterfeit or simply substandard), in some parts of the world, and on the Internet. Such batteries pose an increased risk that they may fail or catch fire when subjected to the shocks and loadings encountered under the normal conditions of transport.

The guidance further notes that safety concerns are not restricted to baggage and cargo. While lithium batteries, whether shipped on their own or packed with equipment, are not permitted in airmail, numerous websites advertise the batteries for sale with delivery by airmail as an option. According to IATA, there have, in fact, been a number of incidents involving lithium batteries in airmail.

Power adapters

An adapter is a device that converts power from an electrical outlet into a form that an electronic device can use (i.e. commonly from 100-240 volts, to 5 volts). Many brands of adapters are available from retailers and many brands are also available for purchasing on the Internet, at prices ranging from less than USD 2 for a simple charger available online, to more than USD 30 dollars for more sophisticated products. The design of the adapters and the materials used in their construction are critical to their operating properly and safely (UL, 2020a). Leading manufacturers and companies devote significant resources and money to make their adapters safe and subject their adapters to rigorous testing for safety and reliability.

Substandard adapters have been shown to be potentially highly dangerous. In 2013, a man from Thailand was found dead holding his Apple iPhone which was plugged into a wall outlet (UL, 2020[20]). An investigation conducted by the government determined that the Apple adapter was in fact counterfeit and was improperly shielded or grounded. In 2014, it is believed that a phone charger that had not been certified to applicable safety standards sent a high-voltage electrical pulse into an Australian woman’s phone, which transferred to the earphones she had connected to a laptop, resulting in her being electrocuted.20

The scope of the problem is alarming. In 2020, UL posted a white paper containing the results of an investigation in which it tested 400 counterfeit Apple adapters to assess their safety (UL, 2020[20]). The adapters bearing counterfeit UL certification marks were obtained from multiple sources in eight different countries around the world, including the United States, Canada, Colombia, China, Thailand and Australia. An electric strength test was carried out on the adapters to determine how well they were isolated from the electrical mains. If the amount of current flowing was above a specified threshold, the unit was found to have insufficient isolation and was judged as unsafe, with a significant potential for electric shock. The adapters were also subject to a touch current test, which serves to measure the amount of current that could potentially flow through a person’s body when that person comes into contact with the product. If too much current leaks through, the unit is said to have insufficient isolation and is considered to be unsafe, with a risk of electrocuting the user.

Twenty-two adapters were immediately damaged during the process of energizing or during the leakage current test, with 12 samples having a very high leakage current, which was high enough to result in electrocution. With regard to the electric strength test, only three of the four hundred samples passed, which translates into a 99 percent failure rate. Construction reviews found problems with the isolation transformer design in selected devices. The internal components were vastly different from those used in genuine UL Listed Apple adapters. Post-testing analysis also revealed a complete lack of triple isolation wire used for the secondary windings; neither the primary nor secondary windings were separated properly, which was the major reason for the high failure rate on the electric strength test.

Automotive parts

The global automotive aftermarket for replacement parts and accessories is large, accounting to more than USD 390 billion in 2020, according to one research organization.21 The size of the market, and the increasing role of the Internet in the market have made it an attractive market for counterfeiters. Counterfeit products pose potentially serious risks to consumers as they are not made to the specifications of the original manufacturer, are not subject to quality control tests, and often fail to perform as intended, which could result in catastrophic failures with potentially fatal consequences.22 US Customs seizure statistics reveal that counterfeit safety components like brake pads, air bags, wheels, and suspension parts are commonplace. Additional counterfeit parts reported to have been seized by law enforcement include seat belts, oil and air filters, windshields, microchips, and spark plugs.

The Automotive Anti-Counterfeiting Council (A2C2) is actively engaged in combatting counterfeits. The Council has identified a number of safety risks associated with substandard counterfeits, including:23

• Airbags: Many counterfeit airbags have been found to improperly deploy, or not deploy at all, posing a risk to vehicle occupants.

• Body and structural parts: Counterfeit vehicle hoods designed without crumple zones may penetrate the passenger compartment in a crash, putting vehicle occupants at greater risk.

• Brakes: Counterfeit brake pads have been found to be made of grass clippings and saw dust, which would likely jeopardize stopping ability. A test conducted by Mercedes-Benz revealed that counterfeit brake pads on cars driving at 100km/h on a dry surface took 25 metres longer to come to a complete halt.24 In another BMW test, counterfeit brake pads started to smoke and disintegrate early on in standard testing procedures.

• Engine and drive train: Counterfeit spark plugs can overheat and may lead to fire. Counterfeit oil filters can cause sudden engine failure.

• Suspension parts: Counterfeit suspension parts made of substandard materials have shown higher rates of failure, which may place drivers and passengers at risk.

• Wheels and tires: Counterfeit wheels have exhibited compromised structural integrity by cracking after hitting a pothole at just over 30 miles per hour. Counterfeit tires often fail on air pressure and feature cracking, bulging, blistering, rippling in the sidewall or abnormal treadwear patterns.25

Particular attention has been paid in recent years to the proliferation of counterfeit parts available on online ecommerce platforms. In October 2021, the organization urged one major platform to ban the sale of all airbags on its site, noting that counterfeit airbags are typically comprised completely of counterfeit components, but that such airbags have also been found to be comprised of certain used original equipment manufacturer (OEM) components cobbled together with counterfeit components so as to appear to be complete OEM airbags.39 The fake airbags are reportedly difficult to spot, often appearing nearly identical to genuine, original equipment parts; they can, however, be unsafe and result in catastrophic failures, with fatal consequences.

Personal protective equipment

The Covid pandemic resulted in a sharp rise in demand for personal protective equipment, by medical professionals and the general public alike. The market was flooded by products, some of which falsely attached trademarked certification to deceive consumers on the efficacy of the products. One of the products which was widely counterfeited was respirators.

In the United States, the National Institute for Occupational Safety and Health (NIOSH), which is a part of the Centers for Disease Control and Prevention (CDC) oversees the National Personal Protective Technology Laboratory, which evaluates and approves respirators which meet government standards. In the case of N95 respirators, it ensures that the products in question filters 95% of airborne articles.26 The use of the NIOSH label obligates the applicant to whom it was issued to maintain the quality level of manufactured respirators and assure that the respiratory protection device (RPD) is manufactured to the drawings and specifications upon which the certificate of approval is based.

The approval labels contain important information to assist users in understanding the respirator, its protections, cautions and limitations, and approved configuration of components. According to NIOSH, use of components not listed on the full NIOSH approval label constitutes configurations not included in the approval and could cause serious injury and/or death to the user (Metzler, 2011[21]) When the agency discovers counterfeits, it alerts the public through public notices which are posted on the Internet. In 2020, some 21 notices of counterfeit products were posted, up from 16 in 2019; in 2021, the number slipped to 13.27

Respirators similar to the N95 have been designed and tested to meet international standards.28 The most widely available are KN95 respirators, which are a Chinese version. Other examples include 1st, DL2, DL3, DS2, DS3, FFP2, FFP3, KN100, KP95, KP100, P2, P3, PFF2, PFF3, R95, and Special. NIOSH evaluated KN95 masks in 2020 and 2021, finding that about 60% of those tested did not meet their intended requirements.

Environmental impact

Substandard counterfeit products can have environmentally damaging consequences. Both the manufacture and the disposal of counterfeit items can have major impacts on the environment. In the manufacture of products, the use of toxic dyes, unlawful disposal of chemicals, and unregulated air pollution are problematic (UNODC, >2013). With respect to the disposal of counterfeit goods, the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) requires the WTO members to provide in their domestic legal framework for the remedy of destroying or disposing of IP infringing goods; the practical implementation of this, however, is daunting (WIPO, 2017[22])

Firstly, the large volume and wide diversity of IP infringing goods make managing seizure operations, from the processing of items to their destruction, a difficult undertaking for enforcement agencies (Guard, 2017). While the costs of the operations should ideally be recovered from the infringers or criminal organizations that produced or imported the illicit goods, in practice the costs are most often incurred by right holders and taxpayers. The logistics of storing, destroying or disposing of products, or recycling them in an environmentally safe way with minimal health and safety implications, is in itself often a daunting task, especially when hazardous materials are involved. This is particularly difficult in countries where technical capacity, appropriate storage and waste facilities, regulatory control and funds are more limited. In countries with more robust regulatory frameworks, specialized facilities for environmentally safe waste disposal and recycling of seized IP infringing goods can diminish the scope of environmental damage. The task for all, however, can be further complicated following coordinated customs seizure operations in which a large number of IP infringing goods are confiscated over a short timeframe, creating a volume of IP infringing products that may stretch the enforcement authorities’ ability to effectively and correctly store and dispose of them. In addition to limited storage capacity, extended litigation procedures or the protracted time required for analysing seized goods to determine their composition or hazard before destruction or disposal can further complicate the situation.

The techniques for disposing of IP infringing goods include incineration, open burning, recycling, shredding, crushing, chemical treatment, encapsulation, inertization and landfill (WIPO, 2017[22]). A survey carried out by React, a non-profit organization engaged in combatting counterfeit trade, indicates that most of the billions of counterfeit items seized are in fact incinerated. Open burning is by far the most harmful disposal method, with the potential of devastating and long-term effects on both the environment and human health (WIPO, 2017[22]). Despite this, it is frequently used and is the main method employed at showcase events aimed at raising public awareness of the counterfeit problem. Burning products with their plastic packaging materials, which is often the case, can release a large volume of toxic fumes such as persistent organic pollutants (POPs), which are resistant to environmental degradation and affect both workers and waste pickers with direct exposure to the toxic fumes, while raising the potential for polluting soils and waterways. Toxins can be absorbed by people through smoke, fumes and vapors, or following settlement on the surrounding environment through bioaccumulation or bio-magnification in the food chain. Moreover, exposure to smoke and vapors can cause respiratory ailments, headaches and eye problems while emissions of POPs and other toxins are linked to i) certain types of cancers, ii) liver problems, iii) impairment of the immune system, the endocrine system and reproductive functions and iv) effects on the developing nervous system and other developmental events.

The disposal of products in non-sanitary and open landfills can also result in environmental and potential health impacts through the escape of contaminating or toxic leachate, which can pollute soils, groundwater and inland/coastal waterways, while releasing foul odors and spawning disease vectors (WIPO, 2017[22]). In addition, such landfills usually attract waste pickers, which can expose those individuals to harmful materials directly or through toxic releases when scavenged materials such as e-wastes (i.e. discarded electrical or electronic devices) are burned for copper and other metals.

Countries have handled the destruction of counterfeits in various ways, with far-reaching implications for the environment. Panelists in a 2021 UL virtual symposium recounted an instance where a pile of goods in a developing country containing toys, electronic goods and textiles was doused with gasoline in an open field, without due regard to the environmental consequences. In other instances, counterfeit goods were reportedly simply buried in the sand or in forests (UL, 2021[23]). On the other hand, in the United States, the government contracts with organizations that store and oversee the destruction of most counterfeit merchandise. The merchandise is typically incinerated, though there are exceptions for some products, such as tires, where shredding and recycling is preferred in light of the serious adverse environmental effects of tire burning. The potential to move counterfeits from jurisdictions which have limited capacity to destroy goods to ones which are in better position to do so has appeal, but legal constraints limit, if not prohibit, such traffic.

Pesticides and agrochemicals

Substantial quantities of counterfeit pesticides and agrochemicals are traded internationally. They are sold untested and unauthorized and are generally toxic, containing components very different from the original product (WIPO, 2017[22]) Moreover, they can have far lower flashpoints (which creates a transport risk) and may also contain illegal or banned POPs. With respect to transport, inadequate containers can provide an extra hazard for both storage and transport of these goods.

Use of counterfeit pesticides can have devastating effects on unsuspecting users (UL, 2021[23]) . In some areas, use of counterfeit products has destroyed crops and poisoned the fields for subsequent years, with severe economic and health consequences for the farming villages concerned. Moreover, substandard pesticides that are not strong enough to kill insects could result in the creation of more robust species of superbugs that could further damage farming. Consideration also needs to be given to the possibility of risky transportation by counterfeiters. Improperly shipped merchandise that ends up in waterways would have a pronounced effect on ecosystems.

Disposal of organic pesticides in an environmentally safe way (except those containing metals or arsenic), requires incineration at temperatures exceeding 1100⁰ C. The risk of dioxin and furan formation can be reduced by an incinerator design; however, both the ash and filters may contain some toxic elements that require careful treatment and disposal.

Pharmaceuticals, cosmetics and medical equipment

The best environmental option for the disposal of most counterfeit pharmaceuticals is high temperature incineration with appropriate gas flue treatment to capture toxic gases is the most effective option for the disposal of counterfeit pharmaceuticals (WIPO, 2017[22]). The most widely practiced method for the disposal in developing countries is, however, non-sanitary open landfills, which is not environmentally friendly and should only be considered if pharmaceuticals can be immobilized through encapsulation, which is an inexpensive treatment that involves the filling of containers with solid or semi-solid pharmaceuticals to 75 per cent of their capacity, or inertization, which involves the prior removal of all pharmaceuticals from their packaging, the crushing of the counterfeit medicines using a grinder or road roller and the mixing of this material with other ingredients to form a homogenous solid which can be disposed of in landfill.

Information and communication technology and other electronic devices

Counterfeit electronic products contain many of the same materials as genuine electronic goods, including hazardous toxic substances such as lead, mercury, cadmium, arsenic, beryllium and brominated flame retardants, but also gold, silver, copper, palladium, cobalt, aluminum, lithium and rare earth metals (WIPO, 2017[22]). The most environmentally safe and beneficial form of disposal is through the recycling, with the recovery of the valuable metals offering significant financial dividends. While developed countries have licensed recycling facilities in which salvageable materials can be safely extracted, recycling of e-waste in developing countries is frequently conducted through informal recycling practices that are unregulated, usually informal and sometimes illegal and practiced by people with little personal protection equipment or technological support and a lack of awareness of the potential health risks. This can pose serious consequences for both public health and the environment.

In informal recycling, plastics are often openly burned at low temperatures either as a method of disposal or to salvage metals from the electronic products (WIPO, 2017[22]). This can release heavy metals into the environment as well as toxic emissions and residues, often carcinogenic, from the plastics. Moreover, the de-soldering of circuit boards likewise results in the release of highly toxic lead saturated fumes while the use of solvents, reagents and acids to remove precious metals in open acid baths can have adverse health and environmental impacts. Furthermore, most of these processes are highly inefficient so that only a fraction of the potential recoverable valuable metals is actually extracted.

Personal security

The growing role and impact of the Internet and, more generally, information and communication technology have been of great interest to cyber criminals, who have hacked their way to new markets, defrauding a growing population of consumers. One of the techniques that they have used is through the sale of adulterated counterfeit software that is designed to access and misuse the personal information of users, with potentially devastating consequences to their personal finances, privacy and security.

A survey published by the BSA and the Software Alliance in 2016 found that some 39 percent of all software installed on computers was not properly licensed (BSA, 2016[24]). The study found further that there was a strong correlation between malware and unlicensed software. Microsoft notes that each year tens of thousands of people report to Microsoft that they bought software that they later learned was counterfeit.29 In many cases, the firm reports, illegitimate software downloads may be riddled with malware, including computer viruses, Trojan horses, spyware, or botware, designed to damage a computer, destroy data, compromise security, or steal one’s identity (Box 2.4).

Box 2.4. Street sales of counterfeit Microsoft software

Several years ago, Microsoft caried out a market test in which counterfeit Windows and Office software was purchased from four different sellers in local markets, in Melbourne. The disks were then tested

• Five out of the six Microsoft Office disks were infected with malware while six out of the twelve Windows disks could not be installed and run. Of the other six disks which could be run and tested successfully, the following was observed:

  • Two were infected with malware;

  • All the six copies had Windows Update disabled;

  • All the six copies had the Windows Firewall rules changed.

• Of the total of twelve counterfeit software copies that could be installed successfully (six Office and six Windows) and tested, the following was affirmed:

  • Seven copies (58%) were infected with malware;

  • A total of 20 instances of six different types of malware code were found.

Source: www.thewindowsclub.com/consequences-risks-pirated-counterfeit-software.

The impact of adulterated counterfeit software was also examined in a 2013 study by IDC (IDC, 2013[25]) It found that:

• One third of PC software in the world is counterfeit. Because of the link between counterfeit software and IT security issues from malware, this posed a danger for consumers and businesses alike.

• In lab tests that included 533 tests of Web sites and P2P networks offering counterfeit software and counterfeit CDs/DVDs, IDC encountered tracking cookies/spyware 78% of the time when downloading software from the Internet and Trojans and other malicious adware 36% of the time. On the CDs/DVDs that were actually installable, Trojans and malicious adware were found in 20% of the time.

Once detected, consumers and enterprises had to invest considerable time and money to identify the corrupted software, repair their systems, recover lost data, and dealing with identity theft. In the case of consumers, the cost per incident was estimated to average from USD 60 on the Asia Pacific area, to USD 203 in North America. In total, consumers were estimated to have spent 1.5 billion hours and USD 22 billion to address the problems caused by the counterfeit software.

The costs, however, varied considerably even within regions. In the United States, professional services for restoring corrupted data files on home PCs were estimated to be as much as USD 2,500. Moreover, some US households experienced personal losses of greater than USD 13,000, while having to spend as much as 500 hours over a period of years to clear up problems.

Notes

← 1.  See https://buysaferx.pharmacy//wp-content/uploads/2020/06/Patient-Harms-Tracker-6-4-2020.pdf.

← 2.  See www.incoproip.com/reports/counterfeit-products-are-destroying-brand-value/.

← 3.  See www.dailymail.co.uk/health/article-2312986/Sarah-Houston-Banned-slimming-drug-DNP-kills-medical-student-coroner-attacks-online-dealers-target-vulnerable.html.

← 4.  See www.dea.gov/press-releases/2021/09/27/dea-issues-public-safety-alert.

← 5.  See www.fbi.gov/news/stories/counterfeit-cosmetics-fragrances.

← 6.  See www.bbc.com/news/uk-45313747.

← 7.  See www.amcostarica.com/Alert%20on%20two%20versions%20of%20fake%20Colgate%20toothpaste.html.

← 8.  See www.fda.gov/media/72959/download.

← 9.  See www.ice.gov/features/dangers-counterfeit-items.

← 10.  Argentina, Australia, Austria, Belgium, Canada, Chile, China, Colombia, France, Germany, Hong Kong (China), Ireland, Italy, Japan, Malaysia, Netherlands, Philippines, Poland, Portugal, Singapore, Spain, Switzerland, Thailand, United Kingdom and United States.

← 11.  See www.ul.com/news/ul-cracks-down-deceptive-practices-combat-fraudulent-personal-protective-equipment.

← 12.  See www.thesun.co.uk/money/10497431/dangerous-christmas-presents-fake-lol-surprise-toys/.

← 13.  See https://edition.cnn.com/2019/12/20/tech/amazon-fake-kids-products/index.html.

← 14.  See www.ul.com/news/ul-teams-law-enforcement-brand-defense.

← 15.  See https://electronics360.globalspec.com/article/17110/counterfeit-part-rise-will-linger-through-2023.

← 16.  See www.semiconductors.org/wp-content/uploads/2018/06/ACTF-Whitepaper-Counterfeit-One-Pager-Final.pdf.

← 17.  See www.semiconductors.org/how-to-stop-counterfeit-semiconductors/.

← 18.  See https://electronics360.globalspec.com/article/17259/the-growing-danger-of-counterfeit-batteries.

← 19.  Off-nominal conditions occur when elements of the system are operating as designed, but operational or environmental factors are not as planned or as forecast.

← 20.  See www.smh.com.au/national/nsw/faulty-usb-phone-charger-blamed-for-sheryl-aldeguers-death-20140627-zsoc8.html.

← 21.  See https://www.grandviewresearch.com/industry-analysis/aftermarket-automotive-parts-market.

← 22.  See https://docs.house.gov/meetings/JU/JU03/20190718/109812/HHRG-116-JU03-Wstate-CammisoJ-20190718.pdf.

← 23.  See https://iipcic.org/courseSamples/A2C2/EN/presentation_content/external_files/A2C2%20Brochure.pdf.

← 24.  See www.incoproip.com/counterfeit-car-parts-risking-lives/.

← 25.  See www.tractionnews.com/be-aware-of-counterfeit-tires.

← 26.  See www.cdc.gov/niosh/npptl/topics/respirators/disp_part/n95list1.html.

← 27.  See www.cdc.gov/niosh/npptl/usernotices/counterfeitResp.html.

← 28.  See www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/types-of-masks.html.

← 29.  See www.microsoft.com/security/blog/2018/04/02/take-these-steps-to-stay-safe-from-counterfeit-software-and-fraudulent-subscriptions/.