What are Some of the Scams in the Rare Coin Market?
Like any hobby, or area where people buy and sell items, the coin industry
has its share of fraud, tricks and rip-offs. This article will explore some of
the common things a prospective coin buyer should be aware of.
Chinese Fakes
One of the things that is having an impact on the hobby is the influx of fake
coins, which are mostly originated from China. While the Hobby Protection Act
requires that all imitation numismatic and imitation political items sold in, or
imported into, the United States be marked with the word “Copy” or the year of
manufacture, many Chinese fake coin sellers blatantly ignore this.
Unfortunately, many of these coins sell on eBay and so far eBay seems to have
ignored this issue. When buying coins on eBay, insist on large pictures and do
NOT be afraid to ask the opinion of others. Better to pay a few dollars more for
a real coin, than buying a fake coin. This scourge of fake coins is not limited
to raw coins. The people who make these are also placing fake coins in real PCGS
slabs as well as fake coins in fake PCGS slabs. Buy from well known dealers.
Dealers with 100,000 feedback items does NOT make them a reputable dealer. It
only means they have sold a lot of junk.
Over Graded Slab Coins
You might read that you should only by slabbed and graded coins. While there
is some truth to that, be aware that there are companies who grade and then sell
the coins they grade. These so called “self slabbers” typically way over grade
their coins often graded them as MS70 and claiming they are perfect. These coins
are entering the market place at the rate of thousands per week. They are often
not worth the plastic they reside in. Do your own research on coin grading
companies.
Coin Magazine Advertisers
You would think that buying from a dealer in a coin magazine would be a safe
venture. I am sorry to say that this is not the case. Many of these dealers in
the big magazines (COINS, Coin World, Coinage, Coin Values, etc) are known for
selling cleaned coins as BU/UNC coins. Before buying from a dealer in these
magazines, simply Google their store name and do some research. PNG, ANA, etc.,
membership is also NOT a guarantee of honesty.
Coins on TV
Be very cautious about buying coins on TV. These are typically way over
priced. Do not buy into the hype. Think about how much it costs to put on a TV
show. They did not get the coins for free, so someone has to pay for the show,
and that someone is the buyer of the overpriced coins.
Doctored/Altered Coins
This is very difficult to detect and can even fool the best of coin experts.
When buying any coin of value, buy from reputable dealers. Again, these altered
coins have fooled the best of coin experts and some have even been slabbed by
the top tier grading companies. These alternations sometimes do not show up for
years. PCGS is currently engaged in a lawsuit against several dealers and
individuals who are accused of coin doctoring.
Big Newspaper Ads
From time to time you may see advertisements in major newspapers by some
company claiming to be selling the last of something, or some rare coin. Many of
these ads are structured to look like a news story, The only news for you, is
that the product is usually junk and will NEVER rise in value. Again, a little
research can go a long way in saving you money and embarrassment. Just because
it is a big advertisement in a well know paper does NOT make it legitimate.
Final Words
Simply put, doing a little research may save you a ton of embarrassment as
well as a lot of money. Spending $10,000 on a coin to find out it is a fake or
doctored is a very expensive lesson. Let your pride take a hit and ask
questions.
As always, happy collecting
Keith Scott has been a collector for over 30 years. His website has
US coins for sale. He also writes
Coin Collecting Articles for fun. Visit his websites for a history of US coins,
metal market updates and news about your favorite coins.
Want to discuss coins? Join the coin forum.
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