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September 22, 2023

Counterfeits Do More Than Economic Harm

Woman typing at laptop on desk.

Counterfeits are often talked about in terms of economic loss. It’s significant — counterfeits cost the global economy an estimated $500 billion a year. But the true costs go far beyond financial implications.

Counterfeit sales may fund criminal enterprises that engage in human trafficking, organized crime, drug dealing, and other illegal activities. Further, the environmental consequences are significant. Fake goods are made quickly and cheaply, using materials that may be toxic, dumping production waste into waterways, and creating a product that is likely to end up in consumers’ trash in short order.

At UL Standards & Engagement, the cost of counterfeits we’re most concerned with is safety. Fake goods mortgage our safety, resulting in more than 70 deaths and 350,000 serious injuries annually.

When people think of counterfeit items, they mostly think of accessories and apparel. However, the safety standards we develop affect products that pose a significant risk to safety, from electrical equipment and life jackets to batteries and smoke alarms. When those products are manufactured to safety standards, they are built and tested to protect against negative outcomes like fire, electric shock, poisoning, and other accidents that can seriously injure and even kill consumers.

But the criminals making counterfeits are not conforming to standards — or considering safety at all. They are intentionally deceiving consumers. Despite the risk, a UL Standards & Engagement poll found that only 25% of Americans check to see if the products they purchase meet safety standards.

More than a quarter (26%) of U.S. consumers have bought a counterfeit product. And while many buyers may assume they aren’t getting a genuine designer handbag for $20, they may have a harder time distinguishing, for example, a counterfeit lithium-ion battery from the original manufacturer item.

In fact, lithium-ion batteries are one of the most counterfeited — and dangerous — products. While genuine replacement batteries for laptops, e-bikes, power tools, and other devices that require them can be expensive, the cost of going with a cheaper or counterfeit alternative can be severe.

Still, the ULSE poll found that nearly half (46%) of Americans admit to choosing the most affordable replacement chargers or batteries. 

Both Nicholas Jones and Angela Bolger thought they were getting a bargain when they bought replacement laptop batteries for $15 and $12, respectively. Unfortunately, those good deals quickly soured. Just days after buying the battery, Jones heard a noise like a gunshot before his battery ignited, setting his couch on fire and resulting in first-degree and chemical burns. Bolger heard a series of clicks before sparks flew from her laptop, producing a fire in her apartment and first-degree burns that have taken years to heal.

The sounds they described are common in cases of thermal runway, a state of uncontrollable, self-heating that can cause lithium-ion batteries to catch fire or even explode. Products that conform to safety standards are built to resist going into thermal runaway. The ones Jones and Borger purchased were not.

The value of a standard is in its use. Companies producing counterfeits are not using them. It can be difficult to root out these bad actors, particularly with online sellers. Take one down, another springs up in its place. Collaboration and coordination among law enforcement, government, business, and other organizations will lead to learnings and solutions that leave us better protected against the harms of counterfeits.  

For more than a century, we have worked to make the world a safer place and will continue to do so. At the end of September, UL Standards & Engagement will partner with co-hosts Interpol and the Norwegian Police Service for the 2023 International Law Enforcement IP Crime Conference in Oslo, Norway. It is an opportunity to discuss the dangers of counterfeits and the opportunities for enforcement — giving us an advantage that will make a difference.