Too good to be true….

Posted on August 14, 2010 by

The classic story is you are walking down the city street and a stranger approaches you opening his trench coat to reveal a selection of Rolex watches to chose from. Of course he can offer a fantastic deal – only pennies on the dollar – for your cash purchase. We are all familiar with this scam, but I wonder why so many seem to forget this lesson when it comes to numismatics.

Far too often someone contacts PCGS to ask for help after they have been on the wrong end of one of these transactions. It’s very unfortunate as there is nothing PCGS can do to help someone who has bought a counterfeit coin or a coin in a counterfeit holder (of course every coin in a genuine PCGS holder is fully guaranteed by us). We usually offer the same advice: contact the seller and ask for a refund; contact the venue through which the item was sold and report the seller; contact the police in the locality where the sale was made. Just as when someone buys a counterfeit Rolex there is not much Rolex can do except try to help put the illegal sellers out of business. (PCGS is actively working with law enforcement.)

So how can you avoid this happening to you? Here are a few things to keep in mind.

First of all there are no Santa Clauses in Numismatics. If a deal seems to be too good to be true, it isn’t. When someone is offering to sell you a coin for far less than its market value you should be very suspicious. Every coin dealer in America would love to buy coins at 30-50% below market value. Why wouldn’t the seller walk into any coin shop and make an easy sale? Second, when a seller wants to meet you at some unusual location to complete the transaction you should be very suspicious. Would you normally think of meeting someone at an airport or in front of a bank to buy a coin? And when the seller insists on cash only, that’s another good reason to run away from the transaction.

The reason these sellers stay in business is because they prey on one specific human weakness: GREED. Do you really think that you were so lucky you were able to buy a rare coin at half of its value? Is the seller such a nice guy that he is giving you this great deal, or maybe he is just ignorant and you can “get a steal”. What’s that old saying – “A sucker is born every minute.” Even professional numismatists allow greed to cloud their judgment and fall victim to the same scams. When we see a collector get taken by one of these scams we feel very badly. When we see a dealer get taken we have far less sympathy.

I just had an incident with a collector who bought a rare date coin off of Craig’s list. The transaction had all the classic characteristics that we’ve already mentioned. When we told him that he had bought a counterfeit coin he was very upset. Maybe at first he was upset at us – the messenger – but soon his anger turned towards himself. He knew it was too good to be true. How could he be fooled so badly? Even though he had bought the coin at far below market value he was out $11,000.

Collecting coins is a great hobby and can be very fulfilling. I’ve collected for years and still do. The vast majority of transactions are safe and without risk. To minimize the chances of getting involved in a bad transaction you should always be careful of whom you are dealing with. My suggestion is to deal only with established and reputable dealers or auction houses who are members of one or more of the industry groups like PCGS, NGC, PNG or ANA. If you aren’t familiar with a dealer check him out. I never had a problem with a potential customer checking my references nor does any other legitimate dealer. Any dealer who does not guarantee the product they sell and offer some type of return privilege should be avoided. It’s that simple. You probably won’t find too many coins for sale at half their value, but as some people find out half of nothing is not a good deal.

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Comments (1)

 

  1. lunaticg says:

    Hi Don.
    I think everywhere in this world, collector want to get their items cheaper then market value. They forgot to think the fact that in numismatic, good thing don’t come cheap.

    In Malaysia, they’re people who live by scamming others like this. One of them approach me by calling my number and tell me that he can get an old coin for a cheap price. When i asked him about the coin details, he cannot answer them. He just insist that we should meet in a mall for a deal. I don’t want to waste my time and meeting with this people.

    As what you say in your article just now, “If a deal seems to be too good to be true, it isn’t”. I always hold to that when I buy my collection.

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