The Free Dictionary online defines “sleaze” as a condition of low quality or dirty appearance. Other meanings have to do with dishonesty and ethics.
Let’s focus on “low quality” as a condition of a coin. Let’s discuss ethics, too, and dispense with dishonesty as that is a state of mind, which cannot be easily proved in court.
In addition to being a numismatist, I’m an ethicist with a few published books, including Living Ethics Across Media Platforms (Oxford University Press, 2008). So I feel qualified to speak on the topic.
A practice may be legal and unethical or ethical but illegal. Texting while driving on the highway is legal in many states but unethical, as a person endangers his own and other lives because of driver inattentiveness. Civil disobedience, such as holding a religious ceremony on the steps of a government building, to protest an action, can be ethical but illegal.
If you’re interested in the topic, this post has succinct definitions.
Self-slabbing, as the term indicates, involves a person putting his or her own coins in holders and then labeling them with year, mint mark and condition. This happens every day when hobbyists put coins in flips and holders and sell them online, designating condition. But only a relative few people doing that also designate themselves as companies.
Doing so suggests expertise, allowing auctioneers to cite Red Book or PCGS prices for coins barely worth their melt value.
In my opinion, self-slabbing can be legal and ethical (accurately describing condition without designating yourself as a company), legal but unethical (accurately describing condition while designating yourself as a company), and illegal and unethical (holdering counterfeit U.S. coins while designating yourself as a company).
I can’t think of an everyday situation where the practice of self-slabbing would be illegal but ethical.
Let’s deal with legality. It’s perfectly legal for a person to holder a coin and print a label that accurately or inaccurately depicts the condition of a coin. If the person has incorporated under a numismatic name, but doesn’t accept submissions as a grading company and holders only his or her own coins, well, that’s legal, too.
Moreover, it’s the truth. Grading, one may argue, is entirely subjective. And no law states that a coin grading company has to accept submissions from other collectors and offer guarantees on authenticity and condition.
So when a hobbyist spots a self-slabber hyping coins far beyond their intrinsic worth, the hobbyist should know the difference between legal and ethical and all the shades of truth in between.
That said, the zealous hobbyist also has truth on his or her side. Grading may be subjective, but within a given range according to convention. Labeling a coin MS67 when it actually only is VF30 is off by 37 points. The act of designating a grade in itself at best implies a warranty and at worst, a modicum of expertise. Any numismatist can testify to that. More difficult to prove in court is the state of mind of the self-slabber, especially when a third-party is involved, in this case, an auctioneer.
In a recent estate auction, I was aghast at the prices people were paying for self-slabbed coins. One common Morgan dollar, labeled MS66, sold for more than $500 and appeared to be an AU53, cleaned coin, worth about $44. Other almost uncirculated and slider lots by the same company were depicted as super gems. One sold for about $400 and, in my view, was worth $65; one sold for $360, worth about $40; one sold for $160, worth about $35; and another sold for about $400, worth $35.
I approached the auctioneer afterward to see if he knew about self-slabbers. “I’m not a coin man,” he said.
There is no law holding auctioneers to be expert in what they sell, even if they sell coins regularly and should know better. Neither is there a law that holds online auction portals accountable for allowing such trade on their networks.
(I’d argue, however, that it is the portal’s interest to establish baseline rules, such as eBay has.)
You may have noticed that I am not naming the self-slabber in Coingrader Capsule. I am also asking my editor to monitor and not allow comments on Coin Update News and/or under this column that may or may not identify a self-slabbing company.
I know about law, too. As long as I don’t identify the person and this Web site takes reasonable precautions to do the same in the comments, then the burden of proving my own state of mind falls upon the self-slabbers. Worse, they will have to self-disclose who they are in order to threaten me, as is their wont, allowing me to file a counter suit against them in my capacity as a nationally known ethicist and numismatist, in as much as I have reasonable care not to identify a particular person or company.
Also, there is this: You as a Coin Update News viewer are free to research “self-slabber,” a specific numismatic term, via your favorite search engine. I recommend that all online auctioneers do the same and stop pleading ignorance that they know so little about coins, even though their auctions primarily sell coins. If you’re going to sell coins regularly on Internet portals, then you have an ethical obligation to know what you’re doing and whom you are hurting, usually onsite, as those attending an auction in person typically are not as schooled as those purchasing coins online.
In other words, you’re going to have to look the buyer in the eye one day when he or she learns about the actual value of self-slabbed coins.
Good luck with your reputation then.
Finally, grading may be subjective. But in the pix illustrating this column — again note my precautions in not identifying the self-slabber or even the year of the coins — I maintain that any average hobbyist (let alone expert numismatist) would agree that my grades are closer to the truth, which is the best defense, of course, in all matters legal and ethical.
Chris says
January 31, 2011 at 7:07 pmSIMPLY OUTSTANDING!! I thoroughly enjoyed every sentence of your article. A great message – long overdue – and I, for one, am glad you took the time to write it.
As a licensed professional engineer (who also collects coins), I receive at least 40 hours of training on ethical standards and professional behavior every year. Too many in today’s instantly gratified, profit-driven society have lost sight of the core values of ethics, responsibility and accountability. Similarly, they often have little to no regard for the far-reaching consequences that their action will bring upon themselves or their particular community, e.g., numismatics. However, other collector hobbies are having nearly identical problems.
Thanks for putting it out there!! I hope we get to see more of these from you in the very near future.
Michael Bugeja says
January 31, 2011 at 7:25 pmDear Chris,
Thank you so much for your insightful comment. I concur entirely with your take on profit-driven society with little regard for consequences of actions.
Your message means a lot to me, and I appreciate your taking the time to send it.
Kind regards,
Michael
Tim says
January 31, 2011 at 9:21 pmInteresting read on your thoughts of self slabbers. I totally agree with the issue of wrongful grading by self slabbers and as you said. Their reputations will proceed their wrong doings. However, I see no place in this article that shows the major companies which I will not name as being responsible or causing the out right false commercialism of coins by way of such labels which introduce statements like First Strike or Early release. Or do I see anything stating that the buddy system involved with these major companies that have allowed many people unknowing to purchase doctored coins for more then 20 years now. As many great and well known numismatist have stated that 80% of Morgan dollars have been cleaned. How can there be so many of any older coins which look cleaned that have grades of ms66 or even 67 and demand 1200.00 or more in values. When in fact after the coin was cleaned it then becomes an AU58 at best. I don’t like seeing this happen to unknowing buyers any more then your article shows dissatisfaction of the self slabbers. To me, They are all in the same sinking boat and taking this hobby down in the process. I do welcome your return comment on this matter as I enjoy a healthy friendly debate.
Michael Bugeja says
January 31, 2011 at 9:38 pmTim,
Thanks for your comment. I’m not aware of any other columnist who has put the major grading companies to the test as Coingrader Capsule. You might want to check out my previous columns, such as “Genuinely Concerned About PCGS,” “PCGS Changes Plus (Kind Of),” “NGC Collection Manager Review,” “Take 2 on PCGS Secure Plus: Imagine a New Numismatic World,” and “PCGS Secure Plus Makes Me Feel, Well, Insecure.”
That said, I do feel the major grading companies provide a valuable service. I’m old enough to remember coins without third-party graders preying on collectors and eliciting the same complaints that you voice. I’ll take PCGS, NGC, ANACS and ICG any day than return to those days.
I also write for Coin World and have a column forthcoming titled “The Swindling of the Hobby.” One of the threats that I mention is the marketing hype of “First Strike” and “Early Release.” That column should appear within six months.
However, I strongly disagree with you that self-slabbers of this magnitude are in anyway on par with top third-party graders. Reason? The obvious and intentional unethical ploy to take advantage of estate and online auctions.
You can find all of my previous Coingrader Capsules at this link: http://news.coinupdate.com/category/coingrader-capsule/
If you know of another columnist writing for a numismatic publication who critiques the major grading companies as I do, please share the name and links with our audience.
Michael
Tim says
January 31, 2011 at 10:52 pmI do appreciate your article as awareness and education is a key element of coin collecting. Buying the coin and not the slab is only based on the knowledge of the buyer of said coin. I guess my only reasoning for lumping them all together is the vast amounts of cleaned older coins I see in all slabs whether they be self slabbers or major companies doing the slabbing in a so called professional way. I will keep up with your articles and try to put forth any knowledge I may have in my over 40 years of experience dealing in coins in an honest and trust worthy way. Although my knowledge is mostly self taught through reading and experience with many countless hours of coin study. I still enjoy my hobby for the history I have been fortunate enough to acquire over the years. To see the last 20 or more years grow with more numismatists entering the hobby only has given a much more delicate ability to acquire coins in a satisfactory way. I truly trust more in my self taught education and appreciate any ability to learn more by reading others opinions. I highly recommend anyone entering into this hobby to take a grading course before buying coins. This will save you much time and money in the long run.
Tim says
January 31, 2011 at 11:20 pm“The obvious and intentional unethical ploy to take advantage of estate and online auctions.”
Please do not be offended when I state that your comment IMHO also applies to these major companies. Reason? I have witnessed many people paying extremely high prices on these major company slabs when the coins in the slabs IMO are cleaned and called ms67s. Or the coin happens to be a doctored coin to increase the grade in one of these major companies slabs. This to me is even worse as many people have been taken for much more money in this manner.
Michael Bugeja says
February 1, 2011 at 1:57 amDear Tim,
Thanks again for adding to the discussion in your two most recent comments. I’m hoping that you’ll become a regular reader of my column and add to each discussion. Often I base my columns on something that a reader has said in feedback.
In my day job I’m a journalist and so my comment about critiquing the major companies is one of pride. In fact, I have an upcoming column that you will enjoy greatly concerning cleaned coins. Don’t want to give too much away here, though, as it is more of an investigative piece.
We need people like you in the hobby whose first love is the hobby itself. Thanks again for your insight.
Kind regards,
Michael
Frank Provasek says
February 3, 2011 at 6:26 pmDavid Hall, Heritage, Q David Bowers all started “self slabber” operations. Those services became PCGS, NCI, and Hallmark/PCI respectively. PCGS ended up changing the industry.
Those services, or better ones, could not develop today with the attitude that they are BY DEFINITION unethical, and should be banned from the market, ebay, boycott dealers who trade in them, etc.
Don’t claim you support “the free market” if you think corporate or government banning of new products and services is preferable to letting the quality of the offering and the acceptance of the marketplace determine success.
Michael Bugeja says
February 3, 2011 at 7:14 pmThanks for your comment, Frank. The problem is, I have no idea what you are talking about. You provide no facts in your first paragraph claiming David Hall et. al are self-slabbers; you imply that the article claims all grading companies are by DEFINITION (ahem) unethical; and then you insinuate that I support a free market.
Bulletin: I don’t support a free market: I support a fair one.
G.J. says
February 4, 2011 at 12:01 pmI wish that someone would put as much effort and dedication in to discussing counterfeits and how they are ten times more harmful to the hobby as the subject at hand. I would rather have a coin that is cleaned than a fake personally.
Michael Bugeja says
February 4, 2011 at 3:00 pmGJ
Coingrader Capsule has put as much effort into counterfeits. Please read past columns:
http://news.coinupdate.com/another-online-counterfeit-gold-coin-0627/
http://news.coinupdate.com/counterfeit-coins-and-third-party-coin-grading-0060/
Walker02 says
February 9, 2011 at 1:29 pmThis article is a joke. Third Party Coin Grading has manipulated the word subjective in to benefiting the themselves at the expense of the American Consumer.
I recently came in to a large collection of Mint State Walkers, Morgans, Barber Dimes, Mercury Dimes..etc..etc They were all raw and sitting in protective cases within a safe deposit box for the last 30+yrs. I signed up for a collector society membership for both PCGS and NGC and began direct submissions. Not knowing at the time that these two “top tier grading services” grade collector submissions low in favor of “authorized dealers” I sold a few to dealers. As is turns out in every case the Authorized Dealers resubmitted and were in turn rewarded with much higher grades than I was given under a collector society membership.
Basically what you have is a network of dealers who got together and have created a “Ponzi Scheme” using the word subjective to defend themselve against what many would view as fraudulent business practices. They dictate the prices, control graded coins that enter the market that best benefits large dealers and authorized dealers, and fleece collectors.
The Federal Government needs to step in and disban these TPGs and take over the grading of United States Currency. There is computer technology available now and programs that could be written that would scan the surfaces of each coin, and in turn give a grade. One submission one grade, that is how it should be, end of story.
How many unsuspecting collectors, naive newbies, and very small dealers have been defrauded by the use of the word “subjective”?
Walker02 says
February 9, 2011 at 1:37 pmLastly I submitted a Mint State 1917 S OBV Walker to both PCGS and NGC for review under my collector society membership. Both TPGs sent it back to me as “Questionble Mint Mark” “Questionable Authenticity”. I took the same Walker and asked an Authorized Dealer to submit the coin for me to PCGS under his dealer account. His results were MS63 valued at over $5000.00! They us the word “subjective” to cover up bias and fraud toward collectors. That is what caused me to do more research and find out what happen to the coins I sold under fraudulent circumstances to authorized dealers.
http://www.congress.org/soapbox/alert/26629501
Michael Bugeja says
February 9, 2011 at 1:41 pmWalker02: I’m struck by comments such as yours who see in one article an encyclopedia that wasn’t covered. Coingrader Capsule not only criticizes top-tier grading companies but also tests them on the very notions you suggest.
See other columns on “Cross-over, -under and -out,” a running series that evaluates consistency and grading of several companies.
Given a choice between private vendors and the federal government, I’d take the former any day!
Walker02 says
February 9, 2011 at 9:29 pmDealer submissions are favored over direct submissions, crack out, cross over what have you. Every coin graded under my collector society membership has been graded above the original grade when sent in under a dealer account, end of story. BIAS.
But if I was a an authorized dealer, shareholder, relative of a TPG employee who has benefited from the subjective TPGs I would prefer TPGs over a non partisan grade too. A non partisan government run grading process would eliminate the conflict of interest that currently exists in TPGs.
Change is coming, and I will continue to actively lobby congress until it happens.
Michael Bugeja says
February 10, 2011 at 4:55 amWalker02:
After your curious comment about lobbying Congress, I decided it might be best not to engage you anymore. We don’t need rants on Coingrader Capsule.
This morning I read your comments again and decided to respond, one more time, because your information is faulty and misleading.
My experience differs from yours. I stopped submitting through my dealer, learned how to cherrypick, and increasingly get good grades–better than or as good as his. That’s why we post “Coingrader Capsule,” to share methods and news about coin grades and condition.
I think you have gotten burned more than a few times by grading companies. It happens. There are borderline conditions concerning coins that were dipped or that have slide marks.
Again, if you were a regular reader, you might have realized that we already discussed that.
We believe in fact in Coingrader Capsule. You claim EVERY coin submitted by you came back with a lower grade.
Let’s take a look at that assertion.
1. You don’t say how many coins. 1? 3? 33? 333? The more we increase the numbers, the more ridiculous your claim becomes, because of the grading processes at companies whose employees lack time for conspiracy theories. There are multiple graders on an assembly line of coins.
2. You don’t say how many submissions you sent in, received back, and brought to your dealer. 1? 3? 33? 333?
3. You’re asking us to believe that you (a) figured out the system, (b)took all your under-graded coins to your dealer for resubmission, (c) kept accurate records and so forth.
Here’s what we appreciate at Coingrader Capsule: documentation.
We take pictures of coins returned with a grade, then resubmit them to test the grading company, noting bag marks or details on the coins so that our viewers realize that we are not switching coins and slabs.
Then we make our case.
Here’s what I’ll do, Walker02, when the occasion allows. I’ll start putting aside coins whose grades I think were wrong. I’ll record those grades and take pictures of the coins in their labels. Then I’ll crack them open and take them to my dealer and ask him to resubmit them.
We’re test your conspiracy theory without the rhetoric.
It will take some months to do that. But I’ll get it done.
Steven says
April 20, 2011 at 5:45 pmMichael, I agree that Walker02 should provide more definitive statistics, but even a small sample size would be suspect. I have shown quite a number (dozen or more) of PCGS-returns to the best in the business and have received comments like, “If I were you, I would resubmit it.” or “This one does not appear to be counterfeit to me, I do not understand why they would not grade it.”. Again, this is not coming from anyone less than past ANA presidents, renowned authors and the like. I too have come to the conclusion that preferential treatment is given to dealers, who send in quantities and can cause great grief if they are unsatisfied. The problem is that I don’t understand why that should be so, unless PCGS fears stirring the pot of someone with considerable influence.
If you do this study as planned, I would tend to dismiss your data out-of-hand, because you are not in a position to perform a blind study. PCGS knows you. They know who you are and that you wield a “pen”, which is far mightier than any “sword”. The difference between your submitting a coin and your dealer would not be expected to be significant, because your name is at least as well known among those at PCGS as would be your dealers. I would suggest even more so. So, what am I trying to say. I would suggest that you will get a higher grade, on the average, for exactly the same coin than I would or Walker02 would. Enough so such that the data would be statistically significant, if the sample size were large enough. Again, no one at PCGS is going to grade your submission “down”, in a case of a close call, because they know it will appear on “Coin Update News”, at your local club or both (and perhaps in more places). Again, you cannot be part of a blind study, because who you are anything but “blind” to PCGS.
So, I suggest you send some coins to PCGS in the name of a “coin club member”, who is a newbee. Better yet, use the 8 “free submissions” of multiple “newbees” and send in a series of unrelated coins (as would be expected from a commoner). Also be certain to have them sent in from an address not already on file at PCGS. Yours would definitely taint the study. Give them absolutely no way to trace the submission back to an author of coin articles in a major publication.
Then pick a fairly well-known dealer or even yourself for the second half.
Then, and only then can we look at the data to see if there is a statistically significant difference between a well-recognized coin submitter (professional) and a casual hobbiest. The study will be blind, and the data random.
I look forward to hearing more on this topic.
Thanks,
SM
Michael Bugeja says
April 20, 2011 at 5:50 pmDear Steven,
I really appreciate comments like yours that take several factors into consideration. I work for an institution of science and technology, in addition to writing for numismatic publications; and I can see your approach has objective validity.
In the April 18th issue of Coin World, I wrote about new PCGS and NGC policies that, I believe, hurt the hobby. We’re following up tomorrow, I think, in Coin Update News.
I’m trying to protect the hobby as best I can and need comments like yours and others, which help guide me.
Thank you very much.
Michael