Consigned coins: what if dealer goes broke, disappears or dies?

DesertLizard

Suppose you consign your coins to a dealer who is smaller [not like a Heritage, BM, SUperior,etc.] and they go belly up, simply disappear or they die and the coins cannot be found. What recourse do you have? I think I know the legal mumbo jumbo part but what is the real life practice?

I know of dealers who have stolen consigned coins and that is different, this is where the dealer is ethical and honest.

Any ideas?

CLASSICS

that would be a shame, and maybe a real hassle to get your coins back, it could be tied up in court, you would have to prove what coins were yours, it could cost you a small fortune in lawyer fees. etc.etc. i myself would not do it unless it was with a well know company

lathmach

Well now, there's some variables here.
First thing, make sure if you consign anything you have comphrensive documentation concerning the agreement you have with the party to whom you are consigning your coins. You will want a lawyer to draw up an agreement if the value warrents it.
In the event of "going broke", the bankruptcy laws will give you some amount of protection if the party still has physical possesion. If he has sold them, you will be one of his unsecured creditors, and most likely will receive nothing from the court.
If he skips out on you with your coins, you can go to your local law enforcement agency. Again, you'll probably find yourself losing everything. By the way, ethical dealers don't "disappear".
If the person dies, you can file a claim against the deceased's estate.
Of the three "what ifs", this will be your best chance of recovering something.

Ray

rainbowroosie

Had this happen to me -- a small dealer passed away. A friend of the dealer tried to clear up the mess and I got back all but one of my coins. However, was out about $1000 owed to me, when the wife said she wouldn't pay....not much you can do....

coppercoins

That's why the documentation is so important. I have been working on a large online store and have been accepting consignments on a rather well documented basis. For those who document ahead of time, I charge 15%. For those who just pass me a pile of coins and have me inventory them (only one person does this with me) I get a sweet 50%....so it's worth the work.

In the end, I have a docmunetation process and a way of marking the holders that my wife is familiar with. If I go, she knows how to divvy up the coins. If we both go - well, I guess I need a plan "B".

roadrunner

Had the same thing happen to me with Beavertown Coin in Lincoln
Park, NJ. He sold my consigned coins to help keep his business going for quite a long period of time, then declared bankruptcy. I'm sure my coins went to pay off bigger dealers who were not so lenient with him. My advice, forget about this method unless you have a very close personal relationship with the individual and would trust them with your life (and wife). Other times I have given coins on consignment I found that the dealers were asking far more than what we had agreed on. The coins didn't sell and significant opportunities were lost. It's also better to hook up with up a PNG dealer because as long as the dealer is solvent, the PNG might actually be able to help you.

And Beavertown? He's back in business again in the same general area with the same name. His good name is once again "restored"
through the cleansing action of the courts. Maybe he's even an e-bay power seller.

roadrunner

EVillageProwler

Hey Roadrunner,

Please consign your 1870 to me so I may declare bankruptcy! And, remember that I have dual citizenship, with the other one in a country that's very lax on such matters...

EVP

agentjim007

does the term SOL mean anything to you?

Pushkin

<< <i>What if dealer goes broke, disappears or dies? >>


Another occasion for using tequila.

darktone

worse yet what if the dealer has all assets seized by the IRS? We had a snowmobile dealership in town a few years ago that had this happen and a few of my friends had paid for thier new rides in full only to never get delivery of them or any type of compensation- one guy lost over $20,000! The kicker was that the guy that owned the dealership was a federal consumer protection Judge! mike

roadrunner

Believe it or not this also happened to me. While dealing with a fairly large name in the business right around 1988, the guy had his assests seized by the Feds. I believe drug traffic was the charge.
Of course by dumb luck I had a $4,500 coin out to him on approval and it never came back. I was fortunate to get back the stated value of the coin in the holder however it was less than what I was asking for. Next time I saw that "NGC 65" coin at a show, it was in a PCGS 66 holder.

Once again, this guy was no PNG dealer or anything close. Be careful with who you are dealing with. Even your grandma can take you.

EVP.....I'll have that 1870 out to you on memo in a few days. I trust you!

roadrunner

Pushkin

This is probably a really stupid thought, but I'll waste a few minutes to it anyway. All of the secenarios in this thread so far involve loss, or at the very least breaking even, and if its the loss, it can be great.

Does it ever happen that you send out a $2000 coin and the consignee sends it back with a note, "Here is your coin and a $2000 check - the IRS just informed me that there was a mistake on my taxes and I received a huge windfall refund, just wanted to share it with you for being so trusting".

Or how about, "I put your coin away in a old drawer and misplaced it, looking for it I also found a roll of 1856 Flying Eagle Cents in original mint wrapping. If it hadn't been for you sending me the coin, I never would have found the roll of 1856 Flyers, and just think, I was going to send that old drawer box of junk to the dump. Here are ten 56 Flyers for the good luck you brought me."

No, I think never. Some fundamental law of the universe is at work here, like entropy always increasing, and time only flowing in one direction.

Thank you for your attention.

michael

for me 99% of the time i do not like consignment. it is like pyrite folls gold now i am sure in some rare instances it might work and work great for some

but for me

for the most part i would never ever consign a coin as from experience
i get promises and smiles and then when the item is given the person turns nasty never ever keeps their word and i have a hard time either getting my $$ or item back

sincerely michael

CharlieB

I think roadrunner has a good point about the benefits
of the PNG service. That's exactly what I do. I have been
consigning my coins over the years, 20 at a time, signed
paper with coins listed, no special form, and dated by a
PNG dealer, 10% comm. It has worked out very well for me
and freed up my time. I will continue to do this in the future.