How big of a problem is counterfeiting?
Zoins
Posts: 34,186 ✭✭✭✭✭
A lot of counterfeits are posted on these forums and every once in a while it's mentioned as one of the greatest threats to collecting. At the same time, no organizations seem to be working on preventing imports or sales into this country. A lot of the effort stems from after a sale is made, but when auction sites are involved, the recommendation is often to work it out with the auction site.
An interesting thing is that in a poll of whether collectors have changed their behavior or not due to counterfeiting, approximately 85% said it hasn't changed their behavior while 15% said it has.
Given that 85% of respondents (in an admittedly small sample size) haven't been materially changed their behavior, how big of a problem is counterfeiting?
I used to think it was a big deal, but perhaps it isn't?
Comments
It's a huge deal for those who are uneducated and buy crap. It is also a huge deal for TPGs who get extra business for authentication purposes. It may be somewhat less of a big deal for those who are experienced (or think they are) enough to avoid the fakes.
As someone who picks up counterstamped coins the increase in fantasy or modern applied marks is a disincentive to pay much.
It is a very big deal if you have unwittingly purchased a counterfeit coin...It is also a big deal in the coin world and getting bigger. The poll (though small) is on a forum of collectors, many of which are trained/experienced in their area of interest.... Therefore you get that type of response. Cheers, RickO
The fact that some collectors actively collect counterfeit coins is a little unsettling in itself.
Successful BST transactions with lordmarcovan, Moldnut, erwindoc
Counterfeits were a much bigger problem before the late 1970's when ANACS started authenticating coins followed by PCGS in 1986 and NGC a couple of years after that. I collected US gold coins before there were any third party grading services and I couldn't go to a large coin show without seeing counterfeit gold coins in various dealer's display cases. At least with NGC, PCGS, ICG, and ANACS collectors can buy coins without too much worry of getting stuck with a counterfeit.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
The real new threat is the counterfeit slab and not the coin itself. Counterfeit coins have been around for decades. It was one of the reasons the market decided to purchase insurance by using the grading companies.
It has changed how I buy and has decreased what I will buy. I helped a person with how to value coins they had purchased some time ago, and the King of the Collection, a Territorial Gold (I forget what it was exactly) that they had paid over $50,000 for from a major coin dealer that is still active. By PCGS value, it was a solid mid 6 figure coin. It was sent to PCGS, and was counterfeit. The coin dealer, who handles in the millions and has be referenced as an excellent dealer on this site, declined to do anything about the counterfeit, stating that too much time had passed.
Huge financial impact, and an entire family forever soured on coin collecting.
Most advanced collectors people can avoid most counterfeits, but the novices get burned. When they come to some sites for advice about what to do, they get the
Too Bad, so sad, price of tuition, slap in the face from the high and mighty, and never return.
An the number of future collectors goes down again.
The counterfeit problem is huge because it poses significant threats to the “ground floor” collectors who might be buying silver dollars at a flea market or the collector who might be buying silver dollars and the like from dealer junk boxes. It also can affect the less than knowledgeable person is buying bullion, like American Silver Eagles. These are the collectors who might flower into something more advanced, but if they get burned on their coin purchases with counterfeits, it could drive them away from the hobby.
In the poll that @zoins cited, I did answer that it didn’t change my buying habits a lot, but it has changed the way I approach buying coins. I don’t make assumptions any more than “in the holder is always good.” I look a lot harder with “This might be a counterfeit” in mind. I am collecting hammered British and Imperial Roman coins now, and I am forever mindful of the counterfeit problem. I prefer raw coins in those areas, but I am aware that there are potential pitfalls to that preference.
Recently I decided not to bid an ancient coin was in an auction because of authenticity concerns. The piece was certified by a second tier service. The coin was labeled as a “details grade” piece because of tooling. I looked at it, and I didn’t like it. I was not sure that the service really knew what they were doing. Since it was an item that regularly sells for a few to several thousand dollars, I was not going to take the chance.
That does represent a change in behavior.
It is a huge problem!!!
IMO,the Gov is vastly to blame because absolutely zero is being done to prevent the import of fakes from mainly China! or anywhere else.
_The average collector, or even dealer, are usually not educated enough to recognize fake coins. _
In order to recognize these, considerable experience AND interest with the issue is needed. This knowledge can only be acquired with time and some very serious interest in the matter.
To possibly reduce the import of (today's excellent and some difficult to recognize) Fake coins, the Customs -Import criteria and questions on the Landing form when returning to your country must be changed to include something like : did you acquire any coinage or Banknotes while away? **... to this date there is no such a thing and it is a stab in the dark if a customs agent will ask you this or come across fakes when searching your goods.
Not that I am against it, but priorities seem to be on drugs and an access of 10 K money coming in. Customs has Dogs specifically trained to sniff this.... Dogs can also be trained to sniff silver and gold... they have dogs that sniff paper money.
The only way we as collectors or dealers or brokers can do something is:
write to your federal politicians.... or better,
**write to every federal politician. ( I have suggested this at least 1/2 dozen times before on this and other forums. However, NOBODY seems to be interested in doing so!!!!)
I live in Canada and we do not have to pay postage to send anything by mail to our Federal politicians.
The good will of educating collectors has been extensively tried by our Mike Marshall out of Trenton Ontario-Canada. (Mike even was recognized for his work on the USA side by the US congress and given some monetary reward.)
He had a few helpers. But the influx from The PRoC is simply way too much.... and it will get worse before it gets better considering the current political climate.... Remember, these imports are not taxed or have a tariff....
This past Saturday I was at a small (in relation to others, but more interesting than many others) coin show on Vancouver Island. (I am not a Dealer but a simple small time collector with extra coins to unload) . Before the public was allowed in, I pointed out to a dealer that he had several Chinese fakes in his cabinet. Silver dollars and silver 50 cents, all Key dates or semi key dates. cost each Max 2,50 from China) He asked how I knew.... I told him these were known as such. His reply: mind your own business, I bought these legitimately from a collector.
My answer: if I still see these Fakes 5 minutes from now, the police will be called..... and I walked away.
he did remove them. Later I suggested he better turn them over to police to avoid unpleasant issues.
What do you think???? This dealer is in Business for many years.
Did he know these were fakes???? or did he not know??? OR, should he have known as a Dealer????
please see the poll for results and opinions:
https://forums.collectors.com/post/poll/u-s-coin-forum
USPS checks about 2% of all packages coming into the United States. The smuggling of Fentanyl used the Post Office as the big conduit, as shipments using FedEx, DHL, etc. had tracking, records, etc., whereas a simple small 1st class package from China had nothing, and one can put a lot of Fentanyl in a small package.
The drug dealers told the US contacts they would ship USPS, as it was safe, cheap, and virtually no checks or inspection.
A one pound package of Fentanyl will kill a lot of people, and will be missed by the post office virtually all the time, whereas a 1 pound box of fake coins is an economic loss, so below lower than low on resources for interdiction.
I am quoting my own post so I can take another member's suggestion and add a few points on how to identify fake or fantasy counterstamps.
Some random observations....
Look for sharp counterstamps on well worn coins, or clear/fresh looking stamps on a grungy or verdigreed coin.
Look for newer style fonts on the letters vs the vintage type styles that are on vintage pieces.
Look out for dramatic counterstamps that have gone a hundred years or more without being catalogued. I know of one "collector" who buys old punches and uses them on vintage coins - some of them are elaborate and would be highly desirable if genuine/vintage. Buyers are easily fooled by these.
Look for highly desirable countetstamps made with individual letter punches that mimic an older, authentic one. Not too long ago a presumably authentic political counterstamp from the immediate pre-Civil War period sold on ebay, and within a month someone had recreated it (poorky) with modern stamps on a low grade coin.
Continuing research on just the struck counterfeit 1806 C-1 half cents, my recorded population grew to 10 confirmed examples over the weekend with 7 crossing my hands personally. Of those 7 three are raw and four in major TPG genuine slabs (grades range from VF35 to AU details, another topic!).
There are actually two "die states" of these with alterations made to one of the major attribution points but they are all still there.
The question becomes how many are still "out there" in folks collections or sellers hands. The problem grows considerably when you consider this is just one of the denominations/ varieties of the 20+ documented to date, with each one having examples certified genuine in genuine TPG holders. And the 1806 can be traced back to 2008 along with the struck counterfeit 1836 Gobrecht dollars.
One of the raw die state "DS-2" examples:
Decades ago it would have been unimaginable to even consider a person or persons counterfeiting certification slabs. Unethical, illegal and just disgusting.
100% Positive BST transactions
There are collectors right here on this forum who are outraged at non-Hobby-Protection-Act compliant fakes coming from China, yet line up to buy and gush over them if they're made in Colorado.
Liberty: Parent of Science & Industry
I attended one of the ANA Chinese counterfeit sessions over 10 years ago. The ones that were scaring everybody then cost $400 from China as fakes, those are not the average ones showing up on eBay. There were some well-known dealers in the room loudly cursing as they viewed the examples. Those are the ones that can cause disruption of the market and we hear very little about them.
BTW Until Alibaba started trading in the US, you could buy complete set ups for counterfeiting Visa/MC, etc. including holograms. Talk about economic harm...
The counterfeit problem is bigger and much worse than most people know. The quality of these counterfeits are becoming insanely good where it is hard, even for some of the most advanced collectors and dealers to tell. Worse yet, some of the best ones are even making their way into legitimate plastic. It shouldn't be so surprising how good the counterfeits can be seeing how long the variety of Micro-O Morgans traded as legit. These were coins with every die marker being studied. They are also not only counterfeiting rare coins but common ones as well that people would not give a second look to.
On the bright side, action is being taken to deal with this. Most importantly the FBI and DHS are cognizant of the problem and working with our industry. Those agencies know that if there is anything coin or bullion related they can approach our industry for help. ICTA helped create the Anti-Counterfeiting Task Force under Beth Deisher and has turned management of it over to the PNG. The PNG now operates the Anti-Counterfeiting Educational Foundation which is a 501c(3) non-profit. They are working on a large number of counterfeiting cases that has already put several people in jail with others heading there. They are working with law enforcement to help catch bigger and bigger fish. They have gone from 0 to 60 MPH in just a couple years. Look into the ACEF and donate because they do amazing work and it costs money to do it.
Very big... even average coins can be altered and sold as errors.
Do all the counterfeit 1806 1/2 cents have that severely dilated eye ball ?
Counterfeits are a very large problem for numismatics. The forum poll is a small fraction of collectors - those who are generally experienced and can identify fakes in the series they collect. The larger problem is those who are entering the hobby and buy what they think is a good deal and later find out it is a fake. These are in the thousands, some may write it off as learning tuition, but I think most leave the hobby. Violation of the HPA is also a very large problem. I believe the decline in prices and ANA membership is partially due to the rise in deceptive counterfeits.
Yes, but here is an authentic one:
I guess I never really noticed that.
Thanks for the pictures !