Counterfeit Coins Cost Consumers Millions

FROM:
http://moneywatch.bnet.com/saving-mo...-millions/768/

Counterfeit Coins Cost Consumers Millions

By Kathy Kristof
Oct 12, 2009

Beware buying rare coins online, at flea markets
and swap meets. Consumers are spending millions
buying what they believe are rare coins, but
they're getting near-worthless Chinese-made
counterfeits.

(fake 1916-D dime, front)
http://i.bnet.com/blogs/fake-1916-d-...attachment_776

(fake 1916-D dime, back)
http://i.bnet.com/blogs/fake-1916-d-...attachment_777

More than a million counterfeit coins manufactured
in China have been fraudulently sold in the U.S.,
according to Coin World, a respected industry
publication. Some of these were peddled as
"replicas" but they were manufactured without the
requisite "copy" stamp.

Roughly 99% of the replicas produced in China
don't contain the "copy" marking that' required
by the U.S. Hobby Protection Act, which is aimed
at warning consumers that they're getting a
mass-produced replica rather than the original,
according to Coin World. As a result, it's easy
to resell these coins at flea markets, swap meets
and through Internet auctions, without giving the
buyer any inkling that the coins could be fakes.

"Millions of dollars already have been spent on
these fakes and potentially millions more may be
unwittingly lost by consumers who mistakenly
think they are getting a genuine rare coin," said
Paul Montgomery, president of the Professional
Numismatists Guild.

How big of a difference does it make? A genuine
1916-D dime sells for about $700, but a replica
can be had for $21.

"Generally the replicas being sold have zero
commercial value," Scott Schechter, vice
president for the Numismatic Guaranty Corp. told
me in an interview. "Most people are looking at
a total loss."

Consumers may be particularly vulnerable at a
time when precious metal prices are hitting
all-time highs, largely because consumers have
become nervous about traditional investments
such as stock and bonds, as well as the rapidly
declining value of the U.S. dollar. Roughly
$5 billion in rare coins are sold each year,
even in the midst of today's recession.

In a joint release issued by the American
Numismatic Association, the Industry Council
for Tangible Assets, the Professional
Numismatists Guild, the Numismatic Guaranty
Corp., and the Professional Coin Grading
Service, the groups urged consumers to
research before they buy and restrict their
purchases to reputable companies that they
have reason to trust. If you are tempted to
buy at a flea market or online, you may want
to check out the coin with authentication
companies such as the Numismatic Guaranty
Corp. or the Professional Coin Grading Service.

The Professional Numismatists Guild will also
provide a copy of its booklet, "What You Should
Know Before You Buy Rare Coins," for $1 if you
send a request to them at 3950 Concordia Lane,
Fallbrook, CA 92028.


...

Arizona Coin Collector wrote:
FROM:
http://moneywatch.bnet.com/saving-mo...-millions/768/

Counterfeit Coins Cost Consumers Millions

By Kathy Kristof
Oct 12, 2009

Beware buying rare coins online, at flea markets
and swap meets. Consumers are spending millions
buying what they believe are rare coins, but
they're getting near-worthless Chinese-made
counterfeits.

(fake 1916-D dime, front)
http://i.bnet.com/blogs/fake-1916-d-...attachment_776

(fake 1916-D dime, back)
http://i.bnet.com/blogs/fake-1916-d-...attachment_777

More than a million counterfeit coins manufactured
in China have been fraudulently sold in the U.S.,
according to Coin World, a respected industry
publication. Some of these were peddled as
"replicas" but they were manufactured without the
requisite "copy" stamp.

Roughly 99% of the replicas produced in China
don't contain the "copy" marking that' required
by the U.S. Hobby Protection Act, which is aimed
at warning consumers that they're getting a
mass-produced replica rather than the original,
according to Coin World. As a result, it's easy
to resell these coins at flea markets, swap meets
and through Internet auctions, without giving the
buyer any inkling that the coins could be fakes.

"Millions of dollars already have been spent on
these fakes and potentially millions more may be
unwittingly lost by consumers who mistakenly
think they are getting a genuine rare coin," said
Paul Montgomery, president of the Professional
Numismatists Guild.

How big of a difference does it make? A genuine
1916-D dime sells for about $700, but a replica
can be had for $21.

"Generally the replicas being sold have zero
commercial value," Scott Schechter, vice
president for the Numismatic Guaranty Corp. told
me in an interview. "Most people are looking at
a total loss."

Consumers may be particularly vulnerable at a
time when precious metal prices are hitting
all-time highs, largely because consumers have
become nervous about traditional investments
such as stock and bonds, as well as the rapidly
declining value of the U.S. dollar. Roughly
$5 billion in rare coins are sold each year,
even in the midst of today's recession.

In a joint release issued by the American
Numismatic Association, the Industry Council
for Tangible Assets, the Professional
Numismatists Guild, the Numismatic Guaranty
Corp., and the Professional Coin Grading
Service, the groups urged consumers to
research before they buy and restrict their
purchases to reputable companies that they
have reason to trust. If you are tempted to
buy at a flea market or online, you may want
to check out the coin with authentication
companies such as the Numismatic Guaranty
Corp. or the Professional Coin Grading Service.

Unfortunately, unless the coin is already in an acceptable slab, the burden
of authentication is on the buyer after he has paid for and taken possession
of the coin. By then the seller is long gone.

James the Wary

Mr. Jaggers lugburzman[at]yahoo[dot]com wrote:

Unfortunately, unless the coin is already in an acceptable slab, the burden
of authentication is on the buyer after he has paid for and taken possession
of the coin. By then the seller is long gone.

James the Wary

Hi James,

Chinese fakes seem to vary from low quality stuff which wouldn't
fool anyone with a clue to high quality stuff which will fool
some experts some of the time. I know that I've seen low quality
fakes at flea markets, but I have no idea if I've seen any of the
high end Chinese fakes.

How common are the high quality fakes now?

It used to be claimed that one was fairly safe buying from
respectable dealers. I've never bought a certified coin.
I collect world coins and those of Canada (my own country)
and rarely buy anything expensive, and I count $50 a coin
as expensive on my budget.

Peter.
--


Peter.

Peter Irwin wrote:
Mr. Jaggers lugburzman[at]yahoo[dot]com wrote:

Unfortunately, unless the coin is already in an acceptable slab, the
burden of authentication is on the buyer after he has paid for and
taken possession of the coin. By then the seller is long gone.

James the Wary

Hi James,

Chinese fakes seem to vary from low quality stuff which wouldn't
fool anyone with a clue to high quality stuff which will fool
some experts some of the time. I know that I've seen low quality
fakes at flea markets, but I have no idea if I've seen any of the
high end Chinese fakes.

As mentioned in the material cited by the OP, *all* of the fakes being
offered as bearing a "REPLICA" counterstamp started out without the
counterstamp. Win one of these in an online auction, and the seller will
likely contact you and offer you an example without the counterstamp at no
extra charge. Thus is a mechanism set up for these things to be vectored by
all sorts of unscrupulous sellers, even some from the U.S. and Canada.

How common are the high quality fakes now?

They are disturbingly common, and a few have made their way into respectable
slabs. Even more have made their way into fake slabs. One way that I can
tell is by seeing offerings that are way out of proportion to their known
rarity. If all of a sudden we see regular offerings of coins from Gold
Coast, the 19th century speciedalers from Norway, or the silver crown from
Zanzibar, just to name a few, we can be reasonably sure they are all fake.

It used to be claimed that one was fairly safe buying from
respectable dealers. I've never bought a certified coin.
I collect world coins and those of Canada (my own country)
and rarely buy anything expensive, and I count $50 a coin
as expensive on my budget.

It's literally a minefield out there, Peter, but mostly for the more
expensive coins, much less so for the $50 and under collectible coins. It
still is incumbent upon you, the collector, to have at least a working
familiarity with what genuine coins look like, and that's not at all easy
with those from quite a few countries. Your best bet, as you suggest, is
still to buy from knowledgeable dealers, and if it's a rarity at all, buy
only if the coin has been authenticated by PCGS or NGC. Peace of mind knows
no price.

James

Mr. Jaggers lugburzman[at]yahoo[dot]com wrote:

It's literally a minefield out there, Peter, but mostly for the more
expensive coins, much less so for the $50 and under collectible coins. It
still is incumbent upon you, the collector, to have at least a working
familiarity with what genuine coins look like, and that's not at all easy
with those from quite a few countries.

My main collection is 5 cent (including 5 pfennig, 5 kopeks etc)
denomination world coins. There are more than a few in my collection
where I have not seen any others of that type. As it happens, the
majority of these were inexpensive enough to make forgery uneconomic,
but this isn't always the case. Some of the Mexican Revolution regional
5 centavos were said to exist as forgeries or unmarked replicas even
before the current influx of Chinese fakes, and the same goes for
my Chinese Soviet 5 cents. My only source of confidence comes from
my belief that the dealers who sold them to me were both honest
and competent.

Your best bet, as you suggest, is still to buy from knowledgeable
dealers,

That would seem to be an essential matter of policy. Before eBay,
proper coin dealers were the only practical source, apart from
relatives and circulation finds, for adding to a collection.
I haven't gone to eBay for coins partly because I see that most
auctions seem to be by people who do not know how to accurately
describe what they are selling, and partly because the shipping
on a single coin tends to raise the price of a moderately priced
coin so as to make it uncompetitive with what a dealer would charge.

and if it's a rarity at all

I don't think I have any actual rarities as coin collectors
understand the term. I have some coins which I have only
seen once on Frank Robinson's list in the past decade, and
never on Bob Reis' list or at my local dealer, or at coin
shows. The same goes for some coins at each of the other
sources never appearing anywhere else.

Peter.
--

Do not miss the bigger picture, miss the forest for the trees.

Nothing is being done because the Peoples Republic of China is able to
hold the enforcement authorities of the United States of America at
bay, bulwarked by over A TRILLION DOLLARS in US Government (and
corporate) Debt held by the PRC government.

These fakes are productive work for people whose per capita income is
$4,000 to $6,000 per year (CIA World Factbook). And that's the
average. Half make less. Weighted averages say that more than half
make still less, the mean being bouyed by the earners at the top. If
you have not seen this video, pay close attention to the details of
the place.
http://coins.about.com/od/worldcoins...rfeiting-Ring/

These fakes only harm rich Americas tossing out disposable income. It
is not like poison toothpaste or even poison dog food. Technically,
no one is getting hurt -- at least that's how the Chinese see it.

In Philip K. Dick's THE MAN IN THE HIGH CASTLE, America lost World War
II. The East Coast and South are under the Germans. The West Coast
is occupied by Japan. The Rockies are still open. Life is not so bad
in San Francisco. The Japanese are consumers. They love Americana
and pay the big bucks for Frontier Artifacts ... most of which are
made anew in the Rockies... Same theory the Chinese operate under
today...

Now, truly, we here see the problem differently. Susan Headley is not
alone in testing the ability of professional numismatists to cull the
goats from the sheep. These fakes harm the market generally, and
literally and specifically and unarguably cheat the buyer, depriving
the buyer of the benefit of the bargain, a clear fraud, destructive of
savings, and thus destructive of time spent earning. Theft is murder
writ small.

But, again, the USA Government in Washington is powerless because the
PRC Government in Beijing holds the IOUs.

On the other hand, when I gave my talk on Counterfeits at the ANA in
Pittsburgh, I got a statement from an FBI public relations specialist
that Chinese counterfeiters were beheaded -- for making fake US
Currency, i.e, real money. That is something the American government
acts on. Collectors getting ripped off is a lesser problem to them,
not worth the cost of China's disapproval.

Handwringing by the PNG, ANA and ICTA will not change the geopolitical
situation. Realpolitik is real politics. A is A

Mike M.
Michael E. Marotta
"Objectively concerned."

Mike Marotta wrote:
Do not miss the bigger picture, miss the forest for the trees.

Nothing is being done because the Peoples Republic of China is able to
hold the enforcement authorities of the United States of America at
bay, bulwarked by over A TRILLION DOLLARS in US Government (and
corporate) Debt held by the PRC government.

These fakes are productive work for people whose per capita income is
$4,000 to $6,000 per year (CIA World Factbook). And that's the
average. Half make less. Weighted averages say that more than half
make still less, the mean being bouyed by the earners at the top. If
you have not seen this video, pay close attention to the details of
the place.
http://coins.about.com/od/worldcoins...rfeiting-Ring/

These fakes only harm rich Americas tossing out disposable income. It
is not like poison toothpaste or even poison dog food. Technically,
no one is getting hurt -- at least that's how the Chinese see it.

That's an interesting way to assess the phenomenon. Those same rich
Americans might lose millions or billions in the stock market, attribute it
all to so much "biz" and figure they can make it all back one day. Losing
100k on a fake 1796 half dollar pales by comparison, but denies the
possibility of ever being made whole again, so in the mind it looms larger
than other kinds of loss. As for me, I just hope my unslabbed F15 1926-S
nickel is real.

James the Optimistic

On Oct 13, 9:49*am, "Mr. Jaggers" lugburzman[at]yahoo[dot]com wrote:

*As for me, I just hope my unslabbed F15 1926-S
nickel is real.

James the Optimistic- Hide quoted text -


Naturally, I hope you are not disappointed. Even so, I still think a
central question is why anyone would pay more for a collectible coin
than the price the Chinese ask. Their best quality of coins are made
on genuine presses that were used by the US mint. They can produce
the same pressures, exactly. They have actual dies from the US mint
and are able to use the same die steel and make new dies with computer
enhanced laser etching techniques. They have access to the genuine
planchettes that the mint uses. If someone is collecting something,
they often aim for the best available; is genuine really better? In
fact, how is it different? As other posters remarked, labor in China
is very cheap and this business is not illegal in China. If it is
possible to find a difference between the Chinese product and the
original coins, it seems almost certain that the Chinese will shortly
improve their product so that there is not any longer a difference.

A more alliterative title for this thread would have been "Counterfeit Coins
Cost Consumers Copious Cash".

"Peter" wrote in message
...

They have actual dies from the US mint
and are able to use the same die steel and make new dies with computer
enhanced laser etching techniques.

IIRC the US Mint completely defaces all used dies.
Unless those crafty Chinese have broken into the Mint vaults that is!