Counterfeit Coins Cost Consumers Millions
|Published: Wednesday, 19 May 2010 19:57
By Kathy Kristof
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.
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.