What should you do if you purchase a fake coin on Proxibid or eBay and discover it when your options have run out–a few months, or even years, after the sale? What if you buy a counterfeit in a private coin dealer auction online? Or an Internet estate auction?
Portals like Proxibid and eBay have service terms that prevent the selling of fakes. Yet, you can spot dozens on eBay, especially California Gold. I wrote about that in Coin World.
In fact, some bloggers routinely post about fakes being sold on eBay. Check out this one.
As viewers of Coingrader Capsule know, I buy on Proxibid as well as eBay. Some Proxibid sellers announce that all of their lots are genuine. Here’s an example:
I especially like “Auctions by Wallace” (screen shot above) because its owner Sheena Wallace understands that all lots must be authentic and that Proxibid’s Unified User Agreement forbids fake coins on the block.
Unfortunately, Auctions by Wallace is the exception on Proxibid (although many of my favorite sellers identified in my personal blog also have similar service terms).
Too many auctioneers on Proxibid and Internet estate and coin sales warn bidders “All Sales Final–No Warranties” in their service terms. When it comes to Proxibid, I routinely warn auctioneers about clause 5.16. of Proxibid’s Unified User Agreement:
“If, within a reasonable amount of time, Buyer gives notice in writing to Seller that the lot so sold is a counterfeit and after such notice the Buyer returns the lot to Seller in the same condition as when sold, and establishes to the satisfaction of Seller that the returned lot is in fact a counterfeit, Seller as agent for the consignor will rescind the sale and refund the purchase price.”
Sheena Wallace guarantees her lots are genuine not because of the above clause but because it is the ethical auctioneering thing to do.
Many Proxibid auctioneers (as well as eBay mega-sellers and auction houses) are members of the National Auctioneers Association. Before they post service terms, they might want to read their Ethics Code, particularly this:
ARTICLE 2. Members owe the buyer (from now on referred to as the Customer) the duties of honesty, integrity and fair dealing at all times.
Fact is, at any given time, I can identify a half dozen fakes on the Proxibid portal.
Counterfeit Gold Coin
Despite repeated warnings, however, many auctioneers–used to calling the shots in local sessions–aren’t paying attention to posts like this, because they think they know better–or rely on their consignors for that. (Their default defense is to protect the consignor–more on that momentarily.) As a recourse, if you fall victim to buying a fake coin and the portal or auction house refuses to refund your purchase, you can check to see if the seller is a member of the NAA. If so, you may open a formal complaint.
You can read about the process on the NAA Ethics Code page here. Here’s the operative clause:
Upon receipt of a written complaint alleging that a Member has violated the Code of Ethics, the Chief Executive Officer shall forward a copy of such written complaint to the accused Member and request that the accused Member provide a response in writing to such charges.
The NAA Ethics code also speaks about violations of law. That can occur with the US Hobby Protection Act, which states:
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.
General Requirement §304.2 of the act warns that distribution of counterfeit coins constitutes a violation of the act as well as the Federal Trade Commission Act.
Our advice if you buy a counterfeit coin, or even if you learn about it months or years later, is to contact the seller and politely but firmly inform him or her about consequences for sale of fake goods. (We have done that several times, and each time with Proxibid sellers, and one eBay seller, we got refunds.)
You can also tell auctioneers to state in their consignor contracts that consignors are liable for the sale of fakes and must refund money to the auction house. You can read a blog post about that by clicking here.
In any case, this is why bidders should cite Proxibid’s Unified User Agreement and eBay’s anti-counterfeiting service terms. Both strive to be in compliance with NAA’s code as well as the Hobby Protection Act. To be sure, however, this also gives them a strong defense against charges of “contributory liability,” a concept that holds online sellers responsible for facilitating the sale of fake goods.
You can read about how eBay won a recent case about contributory liability by clicking here. EBay had invested over $20 million annually in combating counterfeits on its portal, bolstered by notices warning sellers offering counterfeits with a quick “take-down” notice.
The legal matter concerning contributory liability is still being decided abroad. The European Union, in particular, does not allow a hosting defense (such as online organizations enjoy when viewers post libelous comments) and carefully scrutinizes a portal’s “take down” terms.
With the rise in counterfeits from China, including ones sold through U.S.-based sellers, you need to be vigilant about the coins you buy online.
Do you have an story to share about buying a fake on Proxibid, eBay or another Internet source? How were you treated? What can you recommend to do or not do?
We want to hear from you. We depend on viewers like you to help resolve numismatic issues. This is one of the most serious you can encounter buying coins online.
Ebay is also rife with counterfeit guitars. I have contacted them NUMEROUS times when obvious fakes are being auctioned..But have NEVER received a reply or seen an auction stopped. They spend 20 million a year trying to prevent it? Could save a lot of money by actually paying attention when they are alerted.
Ebay does not care about fake coins. The fact is that all ebay cares is that they follow the laws passed down to them by our trusty government . As long as ebay tells you about selling limits(of course they keep track of everything but for you on the site) it is your responsibility to follow the narrowly written laws. I am a disabled vet,Told them I was selling a large amount of my collectables to pay off a debt and both them and paypal kept telling me I was a business! As far as counterfiet coins,I bought a one dollar gold I found out was counterfiet,notified ebay and they stated because I submitted the coin for grading and found out After the ebay alotted time frame(you cannot submit a coin and get it back before that time frame by the way unless you rush it) Ebay told me I could NOT go after the seller. The laws made to protect us are now out their to protect the BUSINESSES or CORPS instead. AS long as they follow the one of a million vaguely written laws,they fall through the loophole.
Paul,
I hear you concerning eBay. It does take more than 30 days to send in and get back a PCGS or NGC designation on a coin. However, I am not persuaded that there is little a person like you can do. One of these days a buyer of a counterfeit coin is going to hire an attorney, get a class action suit against eBay, and hold that company responsible via US federal law or the Hobby Protection Act. A class action through the Federal Trade Commission should get the attention of eBay and PayPal. Being a business rather than a hobbyist has nothing to do with it. So I’m with you. But buyers have to get as mad as hell and not take it anymore before this problem is fixed.
Thanks for your contribution. It is appreciated. And as you are also a vet, thank you for your service in the Armed Forces and defending our freedoms and, dare I say, laws.
Michael
Simple. Only buy PCGS or NGC graded coins.
Caveat emptor. The world is full of fakes waiting for someone to buy and good luck getting your money back unless you lose a huge sum. Local law enforcement and the Secret Service don’t have the time or resources to investigate, much less arrest the small timers. This is being brought to you by an experienced dummy.
How I can detect counterfeit coins?
SJ:
You’re correct about the Secret Service. And you’re also correct about caveat emptor. But as fakes become more sophisticated, the buyers suffer, as it requires expert analysis and records of existing fakes (which NGC, PCGS, ANACS and others have in their offices, as counterfeits are screened via technology to make an exact replica of the authentic source coin. You’re also right about the Secret Service. In the Omaha district, the loss has to be $100,000. But I know precisely what I am talking about, and that is, a class action or, on an individual level, small claims court, citing the Hobby Protection Act and the US Federal Code. I have taken on at least a dozen auctioneers who refused initially to return funds, and I have won every case by explaining what I intended to do if they did not comply with the law.
There is no easy way to detect a counterfeit coin. However, some simple ways may be of help. Use a magnet for base metal coins being passed off as silver rounds or 90% silver dollars. Always weigh a suspect coin to see if its weight falls within acceptable parameters of the use mint. Also purchase a digital caliper to measure the diameter of a coin accurately. And, of course, a good magnifier to look for suspicious pocking that usually occurs in the metal of inferior fakes.
I unknowingly purchased a counterfeit coin via proxy bid last year. It was through a large coin wholesale group that sells through numerous outlets. Upon receiving the coin via mail, along with several other purchases, I briefly glanced at the coin and put it away. Three to four months later I was individually going through my coins and came across the coin I had won at auction. Looking through a loupe at the reverse, under some heavy toning, I saw “copy”. The coin was not listed as a copy, however the inspection period was way past the allotted time frame. Nevertheless, I contacted the company via email and they said to send the coin back. After a few days, when the received the coin I was refunded my whole amount. I was very impressed with the hassle free experience and prompt response on the companies part. This company has earned my trust and I will continue to do business with them.
This is the right message, RW. Companies that accept returns get more than a return. They get a return customer.
Does anyone know if the electronic tester put out by Sigma Metalytics works well ? I saw a video of it online and was interested. Does anyone have any working knowledge of their precious metal verifier ?
I have report a seller on ebay for over a year and ahalf, this seller keep changing acount information listing counterfeit morgan dollars mainly 1881,1882,1883,1884,1885,1889 and 1893 cc.They are listed as located in the US for selling but it will come from China. How can this seller be stopped.
While I cannot comment on this individual seller, and my remarks do not concern him or her (because I have not evaluated the coins), n situations like this I always recommend contacting the Secret Service. They might not be able to do anything about this case; but they can discern whether this is a China/USA network that needs to be analyzed,
throughout the past 4 years I bought $250,000 of coins. Now, I found $45,000 of my collection is fake bought from baldwin auctions. You would think an english company would have ethics. I have sent them an email regarding the fake coins and we will see what they will do. Now, I can detect fake coins and fake coin holders, but I don’t want it to be a $45,000 lesson though. I utilize pictures from hertage auction and stacksbowers auction sites to look for tiny details
For the past 10 years PCGS and NGC have been being faked. So why buy a coin certified by “PCGS” and “NGC” when their premiums are astronomical on ebay. Some will go for 10 times the cost or more of not being “certified”. You get a silver coin that you can’t do a ring test, or a gold coin can’t use a Fisch on. Just look at it from it Chinese made casing and be fooled that all is ok.
When fake PCGS and NGC are coming out of China:
https://www.pcgs.com/news/counterfeit-pcgs-holders
I thought it was against the law to counterfeit money in the US or try to pass it own?? Evidently that’s not true I have bought several coins that were fake and I am a collector not a expert!! Don’t they usually send people to Federal prison for passing fake money?? To stop it send some of th
Life members of ANA and licensed dealers to 5-10 years in Leavenworth I bet it would slow it down!!
I purchased a coin from Property Room auctions a few months ago. Since I won it and other items at auction on there website my circumstances have changed finance wise. I lost my job as a result of cuts due to the pandemic. I took the coins I won with a few other item to a coin and gold broker and was informed that a few of the items were in fact counterfeit or fakes. I contacted Property Room and was told via email, that the time had passed the 30 day mark for returns. And that even if it were allowed that I would not be entitled to the return of all my money because shipping to and from, taxes they collected, auction premiums, and get this….a restocking fee were all my burden to bare! Today again I was told by a coin broker that the coin was a counterfeit and not real gold. I had her show me how she determined it was a fake and when she put it next to the real one I could see the difference. Once the gold acid test was preformed, it was clear that it does not contain any gold at all. I never intended to sale this coin or other items but I also did not intend to need too! I purchased these items as an investment. This coin should sale for $500 easily, and I won it for half that, now I find out its not even worth a penny. Since these are police auctions….Is there any thing I can do? Any suggestions on the way to handle this? It’s been made clear that I will not recover any of my money from PR.
Over a 29 month period, I purchased a total of 29 Morgan Silver Dollars, from The Bradford Exchange Mint. They are dated from the late 1800’s to the early 1900’s. They came with a display case. Each coin is individually sealed in a circular clear plastic casing. Since I’d previously purchased over two dozen Morgans from other sources, and resold them as legal tender, I figured The Bradford was a good source. The name seemed legit. The coins are highly polished and appear authentic. Red flags should have slapped me in the face whenever I realized the packaging said “MADE IN CHINA”. I didn’t think anything of it until recently. After going on their web site, I reviewed literally dozens of reviews. Nearly 99% of those reviews are 1 (one) star out of a possible 5 (five). Needless to say, I was flabbergasted! Based on those reviews, I decided to take one of the coins to a local reputable dealer. I’d sold my previous Morgans to him. After holding that coin in his hand, in the plastic casing, he told me that it’s “not real silver”. He could tell by just the weight. What! My heart sunk. To make a longer story shorter, I contacted The Bradford and was told the coins I bought are long past the one year warrantee. They also told me that the coins are silver plated. I’d purchased the 29th one back in June 2019. Now, I’m trying to figure out a way to get my money back…$50.00 each. This is horrible! Big mistake on my part. HUGE!
I have known people that conterfieted paper money on really good copy machines. They deposited and spent said “money”. I heard that the feds are really tough on “big” time conterfeiters. Are conterfeited coins viewed differently by the feds? Are most coins from China conterfeit?
I bought 20 fake Morgan Silver dollars earlier in 2020 from an ad on Facebook, stating they were selling Morgan Silver Dollars for $9.99 each. The ad site was named KARYNT. It was actually from a company in China called: henwinto.com. I sent them several emails including photos and videos and they just kept stringing me along about a refund, which they never sent. They kept telling me I did not have enough information, and their policy was that a refund request had to be placed before I received the coins – totally bogus. I received the coins in a package filled with Chinese characters, so that caught my attention for fraud and then i took them all to a coin shop and they weighed and analyzed the coins. They were all 2 grams more than they should have weighed, and the metal analysis showed they mostly tin and zinc, with some copper, and only 2% silver instead of the 90% they should have been!
What can I do if a coin I purchased from a private seller/3rd party website turns out fake?
I recently bought an 1803 East India coin. It’s in such good condition it can’t believe it’s genuine. Although I have no way of knowing unless I take it to an expert. Leads me to think perhaps others I have bought aren’t genuine. It didn’t cost me much and I wouldn’t mind if it was fake (for the price), however it was sold to me as genuine.
I’ve not found any info online about East India Company coins being faked or even done for commerative purposes. It looks about 20 years old not 200.