By Charles Morgan and Hubert Walker for CoinWeek Notes …..
There are various respected and educated companies that mix to promote billions of {dollars} of uncommon cash and trendy numismatic cash within the uncommon coin trade–you’ll discover adverts for a lot of of them on CoinWeek. However outdoors of those trustworthy actors are people who search to idiot unsuspecting collectors.
Within the 12 years that we’ve coated the uncommon coin market, we’ve seen all method of scams. Listed here are three that it’s best to keep away from.
Rip-off #1: Counterfeit Collectible Cash
E-commerce has made the manufacture and import of counterfeit cash far more prevalent than at any time within the passion’s historical past. These fakes sometimes originate in China, the place they’re manufactured on an industrial foundation and imported into the United States, the place they get by means of customs and are marketed to unsuspecting consumers. The scourge of those fakes has price the main grading companies tens of millions of {dollars} as they work to enhance the anti-counterfeiting measures on their slabs. CoinWeek contributor Jack Younger usually writes about these fakes, that are so misleading that they often idiot skilled numismatists.
The simplest method to keep away from these fakes is by buying your cash solely by means of a good coin vendor. If the coin is graded, test its certification quantity in opposition to the verification instruments supplied by the grading service. If the coin has an public sale historical past, test the looks of the coin in opposition to recognized pictures of the coin from its prior gross sales. These efforts won’t eradicate the chance that you’re shopping for a faux, however you vastly cut back your publicity.
One other factor that it’s essential to think about is that sellers who market counterfeit cash threat authorized publicity by doing so within the open. Coin sellers who’re members of the American Numismatic Association (ANA) or the Professional Numismatists Guild (PNG) adhere to codes of ethics and neither of those organizations would tolerate a member who knowingly offered fakes.
The identical can’t be stated by social media firms like Fb, which permit anyone to market their items and companies and not using a background test. Whereas respected sellers could promote on that social media platform, we advise in opposition to buying any coin off of a Fb advert until it’s from a longtime enterprise you could confirm is a member of one of many aforementioned nationwide organizations.
Rip-off #2: Excessive-Strain Gross sales Techniques
Respected sellers nurture lasting relationships with shoppers and sometimes are important companions in constructing collections. A very powerful collections within the historical past of numismatics have been collaborations between the passion’s most prosperous collectors and the trade’s most educated sellers.
One doesn’t need to be a Rockefeller to afford high quality illustration from a good coin vendor. In actual fact, most sellers want to work with collectors who’re critical about constructing collections, even when the cash should not essentially costly. Sadly, not each interplay {that a} collector may need with somebody promoting cash goes to be optimistic, and collectors must be leery of buying cash from sellers that they don’t know – particularly if that vendor is soliciting a sale over e-mail, social media, or the cellphone.
All too ceaselessly, these solicitations are both outright scams or scummy within the sense that the cash being supplied are overpriced or overgraded. A number of years in the past, we interviewed a former telemarketer who admitted that his firm would usually chilly name leads and supply them overpriced graded cash. That is fairly frequent, and people taken in by the supply must be grateful they acquired any cash in any respect. Some cellphone scammers don’t even have cash to start with.
Whereas we might by no means purchase cash from a phone solicitation as a rule, there are respected firms that do that. As a substitute of simply saying “sure” to the supply, ask the individual calling if they will refer you to their firm’s web site. Don’t be taken in by provides of getting a greater deal over the cellphone or that the coin goes to promote out in case you don’t act now. Virtually nothing that you simply get supplied over the cellphone, particularly trendy cash, are so scarce you could’t discover them at different respected sellers.
Additionally, be cautious of sellers who make doubtful valuation claims by pulling random on-line ask costs. Sometimes, you will notice this with coin tv exhibits. The way in which the bit works is that the vendor will supply a coin or set of cash after which present printouts from numerous eBay listings. An eBay itemizing proves completely nothing concerning the worth of a coin. Anyone can ask any worth for something they checklist on the positioning, and even the TV vendor can seed inflated ask costs or offered costs for cash on eBay. Sometimes, these exhibits will supply fascinating merchandise on the market, however for the odd stuff, you’ll find cheaper options.
One other tactic is fear-based promoting. Normally, you see this with treasured metals merchandise, and the best way sellers use this to promote merchandise is by interesting to 1’s pure distrust of the federal government and its financial insurance policies. If you happen to’ve ever seen a pitch for gold or silver that additionally mentions runaway inflation, then you definitely’ve encountered fear-based promoting. Concern-based promoting isn’t a rip-off by itself, however when it’s used to make the client behave in ways in which they ordinarily wouldn’t, it turns into predatory. A technique a dishonest vendor may exploit concern to affect habits is by changing gross sales of lower-price bullion cash into gross sales of overpriced numismatic merchandise.
To know how that is doable, one should perceive that the United States has a spotty historical past of respecting a purchaser’s freedom to personal gold bullion. In 1933, on the top of the Nice Despair, the Roosevelt Administration issued an government order that recalled all gold cash. From this level ahead, it grew to become illegal for People to hoard gold bullion, though it created a carveout for coin amassing and the possession of jewellery and different non-monetary types of gold. These restrictions have been eradicated in the course of the Nixon Administration, and the United States Mint has produced legal tender gold bullion coins for sale to investors and collectors since 1986. Sellers know this but sometimes drive sales to more profitable coins by suggesting that the government may once again seize gold bullion and that smart investors will buy rare coins instead.
Of course, it’s not knowable what the government will do in the future, but it’s highly unlikely that gold would again be seized as the dollar is no longer on the gold standard. Besides, if gold were seized, what’s to stop the government from taking everything?
Scam #3: Phony-Baloney Toners and Varieties
Collectors love toned coins, rare varieties, and Mint errors – which is why these numismatic items sell for higher premiums over similar coins struck with the same design or date.
Toning (or tarnish, depending on where you sit on the issue of surface corrosion) is a naturally occurring phenomenon that impacts different coins in different ways. For bronze or copper coins, toning changes the color from a fiery orange to a dull brown, dark chocolate, or even blue. For silver coins, like the gratuitously offensive toned American Silver Eagle pictured above, it’s not unusual for a coin that has been improperly stored for a long period of time to develop a champagne or dull gold tarnish. Other colors are also possible, which is why you occasionally encounter Silver Eagles with attractive rainbow coloration. This type of toning usually occurs when the coin has been stored in proximity to sulfur-rich paper-based packaging materials.
Unfortunately, rainbow toning can be faked with just a basic understanding of coin chemistry. When people add toning to coins to sell them for more money, we call this coin doctoring, and the coins themselves are described as being “artificially toned”. Coins with artificial toning are relatively easy to spot. The coloration of artificially toned coins is too vivid, too uniform, and appears to float on the coin’s surface. If submitted to a leading third-party grading service, most of these artificially toned coins will be flagged and given details grades.
On eBay, however, raw coins with artificial toning are quite common, especially coins of more recent mintage. These may be vibrant and colorful, but numismatically, the coins are ruined and should be avoided. Buy toned coins only if they have been certified and given a numerical grade. Then and only then are these coins worth a premium.
As for varieties and errors, it is important to know how coins are made before diving too deeply into the field.
Numismatists use the word “variety”, or “die variety”, to denote a coin that has been struck with certain characteristics that may differ from other coins struck that same year. Examples of this are the 1909 V.D.B. Lincoln Cent and the 1909 No V.D.B. Lincoln Cent. For this coin, the United States Mint initially issued coins that included the designer’s initials at the bottom of the reverse. After receiving complaints, the Treasury Department ordered the Mint to remove the initials on subsequent strikings. The Mint complied and prepared dies for use that did not have this feature. Less obvious varieties may relate to minute details such as doubled dies, repunched dates, or repunched mintmarks.
An error is a coin that was struck in a manner that does not comply with the Mint’s official standards or tolerances. These pieces are occasionally released among the billions of coins issued into circulation, but in the past, some dramatic errors have gotten out of the Mint through other means.
To an experienced collector, phony error coins pose little threat. To the earnest beginner, however, inexperienced or unethical sellers often pass ordinary coins off as if they are errors. In the image above, an ordinary Washington Quarter was listed as an error because of an incorrect spelling of the word “GOD”. A collector with a good understanding of how modern coins are made would know that the Mint utilizes advanced computer software to design its coins and that accidental misspellings on certain dies and coins do not happen. Furthermore, the serif on the letter “G” is present on the coin in the image, despite the seller’s interpretation that the letter “C” is present instead.
A little bit of knowledge goes a long way for Mint error collectors, and we recommend those interested to consider a membership in the Combined Organization of Numismatic Error Collectors of America (CONECA for brief). Not solely does this group publish intensive analysis about Mint errors, however the degree of experience accessible to newbie collectors will not be accessible anyplace else within the passion.
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These are only a few of the various potential pitfalls that await the newbie collector, and most veteran collectors will let you know that they’ve fallen for comparable coin scams alongside the best way of their amassing journey. As long as you keep aware of your purchases and don’t get caught up within the hype, you can find coin amassing to be enjoyable, difficult, and academic.
Until subsequent time, joyful amassing!
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