A three-light plug-in tester is a useful tool with one serious blind spot, and someone who knows about that blind spot can make an unsafe outlet read as perfect.
The trick is simple. In a box with no grounding conductor, a short jumper is added between the neutral terminal and the ground terminal of the receptacle. The tester now sees voltage between hot and ground exactly as it expects, lights up correctly, and reports a properly wired grounded outlet. Nothing about the display suggests anything is wrong.
What has actually been created is an arrangement where the grounding pin of every plug in that outlet is connected to the neutral conductor. Under normal conditions the neutral is close to zero volts, so nothing happens and the deception holds.
The failure mode is what makes it dangerous. If the neutral conductor opens anywhere upstream, at a loose backstab, a corroded splice or a failed connection in the panel, the neutral downstream of the break rises toward full supply voltage through whatever load is connected. That voltage is now sitting on the grounding pin, and therefore on the metal case of anything plugged in.
A reversed bootleg, where the hot and neutral are also swapped, is worse again, because the appliance chassis becomes energised the moment it is plugged in whether it is switched on or not.
Detecting one requires more than a three-light tester. A dedicated ground impedance tester will reveal it, and so will opening the box and looking, which is the method available to anyone. In houses of the right vintage, particularly where three-slot receptacles appear on two-conductor wiring, opening a few boxes is a reasonable thing to do.
The correct alternative was always available and takes the same amount of effort, which is a GFCI device labelled to say there is no equipment ground.
Where one is found, the repair is not complicated. Remove the jumper, fit a GFCI device or feed the outlet from one, and apply the supplied labels. The outlet then does less than a truly grounded one but tells the truth about it, which is the whole difference between a compromise and a hazard.
Related reading: learn more