LIT was approached by a large cellular-communications provider that was facing a warranty scam. The company security officer had reported that a relatively large number of malfunctioning batteries had been replaced by the company as warranty items. The number was far greater than would be expected under normal circumstances.
Investigation had shown that many of the replaced batteries carried fake warranty labels. Like their genuine counterparts, the fake labels had holographic images that included a tamper-evident feature (the holograms break if there is an attempt to peel the labels). It was in fact quite difficult to distinguish between the fake labels and the genuine ones. The cellular provider suspected that the fake labels were brought in large quantities from outside the country.
LIT suggested that the cellular provider prevent further labeling scams by switching to LIT's LITogramÖ labels, with the warranty expiration date marked on them and a latent image for authentication.
Since the cellular provider was primarily concerned with large scale counterfeits rather than tampering (attempts to modify or transfer individual labels), the labels we recommended did not incorporate standard tamper-evident material we usually recommend in similar cases. This made it possible to use our proprietary pressure-sensitive labels. These labels can be covered entirely by a latent image, which we felt would look optimal in their intended locations. Although the labels are not tamper-resistant, they are perforated, which makes it very difficult to peel them without tearing them.
Because the batteries have a warranty of one year, an implementation period of one year was set. By the end of this period, all batteries under warranty would have the new warranty labels.
When implementation began, all of the cellular provider's relevant service personnel were supplied with polarizers that had the company's logo printed on them. In addition, all of the provider's cellular-phone suppliers were requested to add the new warranty labels to the phone batteries they supplied.
In the first three weeks after implementation began, about 700 battery-replacement requests were rejected.
Six months after project implementation, the rate of battery replacement had dropped by about 20%.
One year after project implementation, the monthly battery-replacement rate had declined by about 33% compared to the rate a year earlier. Furthermore, in the same period, the number of active cellular phones serviced by the company increased by 7%.
The case described here is a classic case of a professional counterfeiter attack. The fake labels were of very good quality and it was very difficult to differentiate between them and the original ones. Because of this, customer-service representatives either did not notice the differences or had to confront angry customers who did not accept the representatives' judgment.
The solution provided by LIT br present, almost all of the football clubs in the country use the LIT solution on their tickets. Counterfeiters have consistently failed to produce fake tickets that cannot be identified easily by stadium attendants. They have at times produced tickets with round, silver labels on them that look like genuine LIT labels, but these labels had no latent image on them and so were easily spotted at the gates.
This case demonstrates some of the major benefits of LIT technology: