The following Q&A is excerpted from Clifford Mishler’s Coins: Questions & Answers: Q: Is collecting any type of coin a good investment? A: No! The hobby collector—be it of coins, back-scratchers, or Bavarian beer mugs—is occasionally persuaded to purchase by impulse or sentiment. Indulging frequent lapses into irrationality is part of the fun of maintaining a hobby. But the strictly … [Read More...]
For the sixth time in two years, I purchased a counterfeit coin through an online vendor, this time through the portal Proxibid, which hosted an auction house selling what was billed as “250-350 A.D. Tetradrachm” lot.
The coin was similar to the silver one at right, only it was made of base metal. I do not have permission to show the specific coin, but suffice to say, as soon as I held it, I knew it was a counterfeit. It felt as light as an aluminum alloy, or tin, and the minting of it had seams as if hot metal was poured into a mold and then cooled.
Ancient coiners minting Tetradrachms used iron dies that often left traces of rust. There was none on this coin, which was smooth and dull gray. For more on ancient minting practices, click here.
To participate in the Proxibid auction, I had to agree to terms of service, which stated for this particular session: “All information is believed to be accurate, but the auction company shall not be responsible for the correct description, authenticity, genuineness of or defect in any lot, and makes no warranty in connection therewith.”
Despite that, as soon as I notified the company of the fake, its representative told me to return the coin; and within five days, the auctioneer refunded my money. That’s excellent customer service.
Then it occurred to me that many coin auctioneers on Proxibid also are dealers. Presumably, several belong to the American Numismatic Association or the Professional Numismatists Guild. Ethics codes for both companies warn against the selling of counterfeits.
The ANA states that members must not “sell, exhibit, produce or advertise a counterfeit, copy, restrike or reproduction of any numismatic item if its nature is not clearly indicated by the word ‘counterfeit,’ ‘copy,’ ‘restrike,’ or ‘reproduction,’ incused in the metal or printed on the paper thereof, with the exception of items generally accepted by numismatists and not in any way misrepresented as genuine.”
PNG states that members have to “refrain from knowingly dealing in counterfeit, altered or repaired numismatic items without fully disclosing their status to my customer.”
When those auctioneers on Proxibid use boilerplate language, such as this–“It is the Bidder’s responsibility to determine condition, age, genuineness, value or any other determinative factor,” essentially avoiding the ANA or PNG ethics codes–are those members living up to their membership standards?
A few coin dealers selling on Proxibid do not publish terms of service, neglecting to address the illegality of selling counterfeit coins. Here are specific legal references:
Section 486, Title 18, Chapter 25 of the federal code: “Whoever, except as authorized by law, makes or utters or passes, or attempts to utter or pass, any coins of gold or silver or other metal, or alloys of metals, intended for use as current money, whether in the resemblance of coins of the United States or of foreign countries, or of original design, shall be fined under this title or imprisoned not more than five years, or both.”
Section 473 of that chapter states: “Whoever buys, sells, exchanges, transfers, receives, or delivers any false, forged, counterfeited, or altered obligation or other security of the United States, with the intent that the same be passed, published, or used as true and genuine, shall be fined under this title or imprisoned not more than 20 years, or both.”
There are other laws, too, such as the U.S. Hobby Act of the Federal Trade Commission, which reads, in part:
“Imitation numismatic item means an item which purports to be, but in fact is not, an original numismatic item or which is a reproduction, copy, or counterfeit of an original numismatic item. Such term includes an original numismatic item which has been altered or modified in such a manner that it could reasonably purport to be an original numismatic item other than the one which was altered or modified.”
In researching this column, I analyzed terms of service on Proxibid addressing counterfeit coins, and to my surprise and relief, several coin auctioneers addressed the issue of selling fakes in online Proxibid sessions. Here is a sampling:
Weaver Signature Coin and Currency Auction: “We will accept returns on counterfeit coins (which we NEVER intend to sell) or if we made an error in denomination description. Buyer must contact us within 5 days of receipt of coin to request return as a counterfeit. On receipt of coin we will verify identity & make necessary refund. Any coin removed from the original packaging or holder is considered sold & may not be returned.”
Key Date Coins: “I Guaranty that all coins going through these Auctions are Authentic. If you find a coin that is not I will refund the total price of that item.”
Crawford Family Auction: “All efforts are made by Crawford Family Auctions to represent authetic,(unless other wise described)merchandise. The Exception is for Gold, silver, platinum & coins specific to metal content, gems and jewelry. If you purchase jems, jewlery, coins, or precious metals, in regards to silver,gold, or platinum content and it comes back as not genuine. Crawford Family Auctions will refund your purchase.”
West Coast Auction Co. L.L.C.: “If for any reason an item purchased with a certificate of authenticity is false (due to a re-evaluation from other outside authenticating companies), the buyer must submit that information as proof to us and we as an auction company with also have it evaluated by a very reputable forensics company to determine its authenticity. If in fact an item was sold through our company as false (determined false) we will be happy to refund the total purchase price paid for that item.”
The most elaborate and instructive service term was by Silver Trades, which “guarantees all coins to be genuine.”
Silver Trades also outlines a process: “If after receiving the coin, a buyer questions the genuineness of a coin is, the buyer has 10 days from receipt of the coin to return the coin to Silver Trades. The coin must be in the original holder and holder must not have been opened. Silver Trades will determine if the returned coin is the actual coin sold. Silver Trades will ship the coin in question to PCGS or NGC, at Silver Trades discretion, for determination if the coin is genuine or not. The buyer is responsible for all costs associated with grading and shipping if the coin is deemed genuine by PCGS or NGC. If coin is deemed not genuine, Silver Trades will refund purchase price of coin and shipping and grading costs.”
This is an incredibly helpful policy. However, each one of the above auctioneers would be in compliance with numismatic ethics.
If you bid in online coin auctions, please do read the terms of service. And if no term addresses counterfeit coins, email the auctioneer to ask what internal policies are in place should a bidder win a fake coin.
If there is any pushback, reference this article.