Bogus Ink Stink

In early February, Yasar Sattar shook hands with undercover detective Rod Jones and a private investigator for Epson, who were posing as potential ink buyers. All three men were inside a Brampton, Ontario, doughnut shop, and Sattar had just agreed to sell $30,000 (U.S.) worth of Epson and Hewlett-Packard ink jet and toner cartridges for a fraction of the normal price.

Jones and the Epson sleuth, who had pegged the cartridges as counterfeit after a lengthy joint investigation, hopped into an SUV and followed Sattar to a nondescript warehouse a mile away. There, Sattar swung open a metal door to reveal pallets of what looked like legitimate ink cartridges, packaged for sale.

"These fakes looked so real, I couldn't believe my eyes," recalls Jones, a member of the Brampton-based Peel Regional Police's intelligence unit. Sattar handed Jones the invoice for the cartridges, assuring him that the ink was genuine. Backup officers then barged in and arrested Sattar, ending one of a growing number of worldwide sting operations against counterfeit-ink rings.

Growing Problem

In U.S. and Canadian stores and on a host of Web sites, counterfeit ink jet and laser toner cartridges packaged as the real thing are becoming as ubiquitous as bogus Rolex wristwatches and fake Prada handbags. Individuals and businesses that purchase these knockoffs to save a few bucks can wind up with substandard prints, leaky or exploding cartridges, and permanent damage to their printers.

The problem has reached epidemic proportions in some areas--as much as half of certain brand-name inks sold in Mexico and in the Middle East may be inauthentic--and it's on the rise here as well. The Imaging Supplies Coalition, a printer and supplies manufacturers' organization, estimates that 1 of every 20 brand-name ink cartridges sold in the United States is counterfeit. Fake cartridges--which are not to be confused with third-party products clearly labeled as such and compatible with various name-brand printers--are showing up in reputable brick-and-mortar retailers and online stores. In at least some instances, the sellers do not realize the cartridges they're stocking are bogus.

The coalition estimates that its eight member companies--Brother, Canon, Epson, Katun (a maker of printer supplies), Lexmark, Oki, Toshiba, and Xerox--lost close to $2 billion last year globally to fake ink and toner cartridges. It's easy to see why: Counterfeit ink is simple to manufacture, yields enormous profits, and is a consumable that people buy over and over again. According to police and private investigators, these characteristics make ersatz ink an ideal product for both organized criminals and terrorist groups.

Into the Inkwell

 

To see for ourselves how prevalent counterfeit ink has become,PC World purchased Canon, Epson, and Lexmark ink jet cartridges over the Internet and in several major U.S. cities, and then asked the vendors to determine their authenticity. Our experiment confirmed industry statistics: Three of the 65 ink cartridges we bought were counterfeit.

One of the fake cartridges was among 20 that we ordered from various vendors online; the other two were among 45 bought at retail stores. (Four other cartridges that we purchased online, although genuine, had problems: One had expired, another was only half full and didn't come in a box, and the remaining two were intended for sale in Asia.)

We also spoke with several people who, according to police records, had unknowingly purchased counterfeit ink from Sattar's company, Multi-Tech (no relation to the telephony equipment manufacturer Multi-Tech Systems). Nearly all said they initially thought they were getting a great deal. But most complained of illegible printouts, clogged ink jet printers that took hours to clean, cartridges that didn't work, or broken printers that the customers had to scrap. Considerably fewer buyers of counterfeit ink had no problems.

"This stuff was nasty," reports Terry Schumacher, a machine shop engineer residing in Mesa, Arizona. He bought eight cartridges for his Epson Stylus Photo 1280 printer for $150--about half what they'd normally cost--through EBay. But he wound up discarding the cartridges when one of them "spit ink everywhere" after he installed it and tried to make prints. "This cartridge was a flawless copy of the real thing. The only problem is, the cartridge worked like crap," Schumacher says.

Photograph by: Sara Jorde

Gigi DiGiacomo, an agricultural economist from Minnetonka, Minnesota, says that counterfeit ink ruined the printheads of her Epson Stylus Photo 825 printer. "We... spent 4 hours trying to fix that printer," she says. Eventually, she and her husband got a new printer from Epson. DiGiacomo paid $133--about 33 percent below the normal price--for the ten cartridges that she purchased online. "They were sealed and had holograms," she says. "I never thought for a minute they were fake."

Similarly, some owners of Brother multifunction printers never suspected that cartridges bought from a regional office-supply chain were bogus. When their machines began to fail, many owners blamed the hardware and sent the devices back to Brother.

"We figured out [that] the problem wasn't with the machine, it was the counterfeit ink cartridges," says Brother's marketing director Matt Hahn. Brother yanked the cartridges from the shelves, but the company won't say where the incident occurred or how many customers were affected.

PCWorld's Buys

While police say Sattar eventually confessed to knowingly selling fake cartridges directly to consumers, most retailers that stock counterfeits do so unwittingly, says Tim Trainer, president of the International Anticounterfeiting Coalition.

For example, one of the fake cartridges that PC World purchased was sold by OmniPro, a Web site owned by Ray Casa of Medley, Florida. "I had no idea [that the ink was counterfeit]," he says. Casa declines to identify where he purchased the ink.

Another bogus ink cartridge we obtained came from a Miami retail store, US Computer & Cartridges. "We cannot test every cartridge we sell," says co-owner Ray Ricardo. "If we can't tell it's counterfeit, that makes it extremely hard to protect our customers." Ricardo isn't sure which of his distributors sold him the phony cartridge PC World purchased.

We got the third fake from Alameda Business Machines in Alameda, California. Owner Michael Wood says that his records do not show where the cartridge came from.

Mopping Up 

Brother, Canon, Epson, and Xerox shy away from giving specifics about domestic sources of--or lawsuits relating to--counterfeit ink. Lexmark declined all comment.

But William Duffy, Imaging Supplies Coalition president, says that some of the biggest counterfeit-ink suppliers operate in China, Malaysia, and Latin America, where government authorities have found falsified labels and packaging materials in raids of ink cartridge manufacturing plants.

Between October 2001 and March 2003, the U.S. Customs Service seized at least 18 shipments of counterfeit ink jet and toner cartridges in the port of Miami, most of them destined for Latin America. Three seized shipments, however, were believed to be headed for U.S. distribution points.

Federal court documents indicate that Epson, Hewlett-Packard, Lexmark, and Seiko have filed separate lawsuits accusing U.S. companies or individuals of selling or making counterfeit ink.

In Canada, Yasar Sattar and his partner Delwir Sing Rai appeared in court in June on charges of fraud and counterfeiting. The February raid of their warehouses netted 13,195 Epson- and HP-labeled ink jet printer cartridges and 437 HP LaserJet cartridges--all fake--carrying a total value of $534,000 if sold at retail, police records show.

The Canadian authorities allege that Multi-Tech sold phony ink to 276 EBay customers, primarily in the United States. A Canadian distributor called Amico Imaging bought another $318,000 worth of the ink and resold it to stores in the United States, Canada, and Europe. Amico Imaging's president, Albert Frankel, says he had no idea that the ink he purchased for distribution was counterfeit.

Inadvertent Sales

So profitable is the ersatz-ink trade that it has attracted organized crime and (on occasion) terrorists, says Robert A. Levinson, managing director of the Latin American office of SafirRosetti, a consulting firm that helps ink manufacturers in their efforts to crack down on counterfeiting rings.

Possible links between bogus products (including cartridges) and terrorism have also attracted the attention of the Department of Homeland Security. The National Intellectual Property Rights Coordination Center, which is chiefly responsible for intercepting counterfeit products that cross the U.S. border, is one of several federal agencies that are working with ink manufacturers to combat the problem.

"There are strong indicators that proceeds of counterfeit products are going to fund terrorist organizations, but we have not made a definitive link," says NIPRCC director Nancy Sherman-Kratzer. "No matter what it is, if it's popular, then counterfeiters will copy it," she observes.

Invisible Ink 

Printer vendors haven't widely publicized the problem of phony ink because they fear consumers might simply stop buying brand-name cartridges and purchase less-expensive third-party products instead. But the printer industry may be shooting itself in the foot: If a customer who has a problem with brand-name ink does not suspect that it might be counterfeit, the manufacturer's reputation may take a hit.
 

Some vendors are trying to minimize customers' pain. Epson says use of counterfeit ink will not void a printer's warranty. Canon agrees, as long as users didn't know they bought bogus ink. HP says that technically any damage sustained as a result of using third-party inks (including fake HP inks) would void the printer's warranty, but that to help victimized customers HP would make specific determinations on a case-by-case basis.

If you suspect you've bought a fake ink cartridge that was supposedly from an Imaging Supplies Coalition member, visit the ISC's Web site for information on submitting cartridges for testing. Report any problems with non-ISC members' products to the vendor's customer service department (customers of HP should call its fraud hotline at 877/219-3183). Testing could give you grounds for a refund and help vendors track sources of fake ink. For advice on avoiding counterfeits, see "Outfox the Fakers."

The high price of printer ink gives consumers good reason to seek cheaper alternatives. Next month we examine another source of inexpensive ink: third-party cartridges that are marketed as compatible with name-brand printers.

Outfox the Fakers: Ink Buying Tips

Psst...Wanna buy some name-brand ink for your printer on the cheap?

Not unless you want to risk substandard prints, a messy ink spray, and serious printer damage--problems that have plagued people who unwittingly bought counterfeit ink in their quest to save a buck or ten. Telling the knockoffs from the genuine article is not always easy, but here are some shopping tips and indicators that should raise red flags.

No-name merchants: To reduce the odds of purchasing illegitimate ink, buy from an authorized retailer that the printer or ink manufacturer audits. You can check the ink manufacturer's Web site to obtain a complete list of its authorized resellers.

Suspect pricing: Know how much ink costs before you shop, and be cautious if you see exceptionally low prices. Although some counterfeit ink costs as much as the real thing, the bogus ink that PC World purchased had been discounted up to 40 percent below the manufacturer's suggested retail price.

Funny packaging: Fraudulent-ink packaging ranges in quality from amateurish to indistinguishable from the original it imitates. Most of the counterfeit-ink victims we talked to couldn't tell the difference, but you should still look for abnormalities such as misprinted stickers and packaging that's old or falling apart.

Running on empty: Phony ink jet and toner cartridges typically run dry unusually quickly because their tanks aren't full. Keep track of the average number of printouts you get with your ink cartridges, and be suspicious of ones that run dry extremely early.

Performance problems: Color ink is harder to counterfeit than black. Many of the phony-ink victims we interviewed kept cleaning their printers' printheads in a vain effort to get the colors to look right. Compare the quality of great-looking printouts made with previous cartridges, and watch for differences in color between old and new samples.

Disasters: Bogus cartridges may leak, spit, or pop apart inside ink jet printers, creating messes that can take hours to clean. When replacing a cartridge that you've had good results with, do a side-by-side comparison with the new one and look for inconsistencies, particularly in molded plastic seams or in controller chips, if any. (Cartridges with integrated electronics are not as likely to be counterfeited as older, non-electronic cartridges.)

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