POLL: How to lose 95% of your money in 60 days...

MrEureka

Let's say I have a superb Transylvanian gold piece in my showcase. You walk up to the table and ask a price. I quote you $32,000. You know nothing about the coin or its value, but you love it and buy it. You figure it has to be somewhere within the realm of reason because I have a good reputation and all of my US coins seem to be priced realistically. You figured wrong. I bought the coin last week at a major auction in Zurich for $1200. It was one of 50 such pieces from a hoard sold at that same auction, all selling in the $1000 to $1500 range. And I only bought 3 of the 50. I would have bought them all if I thought they were selling for pennies on the dollar.

A couple of months later, you figure out how badly you have been screwed. Question: Do you have recourse?

Edited to say that this is a hypothetical case. Which means it really didn't happen. So no more nasty PM's, please.

cladking

No. The only thing any collector or dealer is protected against is buying a non-genuine coin.
(even dealers don't always get full protection here). You are supposed to know the value of
what you are buying whether it's a well traveled segment of the hobby or a highly esoteric area.

However, this also presupposes that the dealer didn't make false statements regarding the
coins rarity and value. While collectors are at the mercy of sellers, it is still actionable in some
cases if false statements are made. It is also a fast way for a dealer to lose business so is not
a very common occurrance.







typos

dorkkarl

the answer is simple. NO.

K S

dorkkarl

the coin was not sold as an investment. it's like walking into ford, paying over list for a 2004 mustang cobra, & 2 minutes later the value of the car has depreciated by $5000.

K S

nwcs

Probably not entitled to get money back but the dealer better be prepared for some major wrath. Especially if the person tries to get various consumer protection groups on their side. The person may never get their money back but they could certainly make life miserable for the person who sold them the coin.

MrEureka

However, this also presupposes that the dealer didn't make false statements regarding the coin's rarity and value.

CladKing - Isn't the initial price quote something of a statement regarding the coin's value?

Shamika

In truth, this is a question of "worth".

In the customer's eyes, the coin was "worth" $32,000. It's irrelevant how anyone else values the coin. Unless, or course, this is an important criteria to the customer. In that case, the customer was being irresponsible for not doing his homework.

Either way, unless the dealer misled the customer or misrepresented the coin in some manner, it is not his fault for the customer being stupid.

MrEureka

unless the dealer misled the customer or misrepresented the coin in some manner...

Shamika - You mean like by representing himself as a respectable dealer and then quoting 32K on the coin?

Shamika

<< <i>Isn't the initial price quote something of a statement regarding the coin's value? >>



Good question. While the initial price quote may infer a value that the dealer believes the coin holds, he doesn't have a gun to the buyers head. The buyer is free to walk away.

Shamika

<< <i>You mean like by representing himself as a respectable dealer and then quoting 32K on the coin? >>


If spending $200 for a table at a coin show is all that is needed to "represent" ones self as a respectable dealer, well...

umm....

hmm.........

oreville

I believe that the collector does have some recourse but not in a legislated way.

Meaning, that if he could spend lots of legal fees or time in the courts (depending if he is a lawyer or a friend of one or go pro-se) and essentially get a judge to agree with his position.

Also a collector could advertise what the dealer has done damaging the dealers reputation.

I believe a wealthy collector did pursue in court in New Jersey against a well known dealer regarding patterns sold to him. I am sure Mr Eureka is well aware of this case (it is not him!).

I do know of a case in New York in which a collector was quite successful against a dealer in New York City but that is primarily because NYCity has strong consumer protection laws.

Steve27

Strictly a case of caveat emptor (i.e. no recourse for the buyer). Had you supplied information indicating that this coin had such a value, or would achieve that value in a certain time-frame, then the buyer would have recourse.

cladking

<< <i>However, this also presupposes that the dealer didn't make false statements regarding the coin's rarity and value.

CladKing - Isn't the initial price quote something of a statement regarding the coin's value? >>



Yes. Of course it is and is one of the reasons this is not a common practice. Just
putting a price on a coin which is out of line with its market value though is not
fraud or gross misrepresentation. It can be claimed that the coin is "rarely offered"
or nearly unique in some way. It might even be claimed that the seller was "buried
in it".

It is not unusual to have differences of opinion of a coin's value which are in the
range of 500%. Certainly a price which is this far off will raise a lot of eyebrows. It
is a hypothetical example though, and I haven't seen an intentional mispricing of
this magnitute since the '60's.

Conder101

<< <i>CladKing - Isn't the initial price quote something of a statement regarding the coin's value? >>


Only to the extent that the seller is saying that he is willing to part with it for that amount of money. It makes no representations that anyone else would value it that highly or even that the seller values that highly and will not accept less.

dorkkarl

there is a HUGE difference between these 2 statements:

1-- "this coin is worth $32,000"

2-- "i want $32,000 for this coin"

#1 is an assertion of fact. #2 is assertion of an opinion.

K S

Baley

You know nothing about the coin or its value, but you love it and buy it.

once I read that line I figure the buyer is on his own.

Take out "coin" and put in "art" or "custom furniture" or "designer clothing" or "antique" or "stamp" or "beanie baby" or "sports memorabelia" or any number of things...

Yousri

The answer is NO.
However, the buyer should put that dealer in a blacklist and tell everyone he sees about that dealer and what happened. The delaer will lose on the long run.

Just my opinion.

Conder101

<< <i>there is a HUGE difference between these 2 statements:

1-- "this coin is worth $32,000"

2-- "i want $32,000 for this coin"

#1 is an assertion of fact. #2 is assertion of an opinion. >>


Total agreement.

In Andy's scenario it says the buyer asked for a price. Dealer gave a price. It does not say the buyer asked what it was worth, or that the dealer said it was worth $32,000. The buyer then screwed himself by buying something he knew nothing about and without doing further research. For that reason I answered to poll No.

dorkkarl

interesting results - mr-eureka, are they what you expected?

K S

MrEureka

interesting results - mr-eureka, are they what you expected?

Not exactly. I expected more people to think that collectors would have recourse. I didn't expect many people to think that dealers would have recourse.

BTW, I voted "Yes".

FC57Coins

Andy:

This is exactly the kind of situation that's being banded around here and exactly the reason why, if you go into the coin market without any knowledge, you're bound to get screwed one way or another. I hang out at a local dealers here in Birmingham when I can, and invariably I see the people walking in with "Crowns of the World" or semi-complete collections of silver dollars that they paid through the nose for only to find out that they're worth a 10th of what they paid. And sadly to say, a lot of times these are senior citizens who were actually counting on this stuff being worth something.

The bottom line is that the coin business is like any other business you get into - if you don't know anything about what you're buying and you decide to invest in it - you have to know that there's going to be a downside - how bad is that downside depends on your knowledge.

coynclecter

Your only recourse is to look in the mirror and ask yourself how you could have been so stupid as to spend that much on something you knew so little about.

VamCollector

If you are going to spend $32K on ANYTHING it is your responsibility to do your homework. I'm constantly shocked by prices paid by people who obviously don't know that the company name on the slab makes a difference. I see auctions on Ebay all the time where a seller quotes the PCGS price guide on a 2nd tier slab and then some lucky buyer gets a "$20,000.00" PF70 DCAM Franklin in a non-PCGS holder.

DesertRat

Caveat Emptor

dorkkarl

it always comes back to the same thing. when you buy coins for ENJOYMENT, you cannot go wrong no matter how much you spend. it's only when you buy coins for profit that you can get screwed.

you simply CANNOT get screwed by a coin purchase if you buy the coin because YOU LIKE IT.

K S

prooflike

Recourse would be rewarding stupidity!

Do you have an image of the coin?

fishcooker

Whew! We might lose 3/4 of the coin market if people only bought based on "what they like."

sliderider

The REAL problem I see here is in FC57s scenario of someone buying coins from a ripoff artist who then tries to sell them to an honest dealer who quotes them the true marekt rate, that person tends to first think that the honest dealer is trying to screw him by lowballing him on the price. Nobody likes to think or admit that they got taken, so they tend to think that the conman who sold them the inflated coins is the honest one.

coynclecter

<< <i>Whew! We might lose 3/4 of the coin market if people only bought based on "what they like." >>



In that case there would only be one person buying AH Kennedy's..........Oh..........There's only one person buying them now

susanlynn9

<< <i>If you are going to spend $32K on ANYTHING it is your responsibility to do your homework. >>



At some point, the buyer has to take some responsibility. Any fool who is going to spend that kind of money on something that he/she doesn't know anything about deserves what they get. As long as the dealer didn't state the worth to be that high, the buyer is on his/her own. I can't figure out why the customer didn't ask the dealer its worth. That to me would be a basic question. I just couldn't see walking up to a dealer, seeing a coin that looked pretty, asking nothing about it, and just handing over $32k. Maybe it's just me.

BTW, I obviously voted "No."

mrearlygold

Yes.

I'm sure a state's attorney would agree as well. I believe there was a company in New Jersey put out of business for this kind of thing.

And rightfully so.


Tom

coinbuf

The answer is yes; in your story the gross overpriceing of any item like this would be sure to draw the attention of the state's attorney. But the buyer would also share in some % of the blame for being so stupid. If the spread between the sale value and actual value were closer then the buyer would be SOL.

Chris

BigGreek

In our wonderful judicial system, there is always recourse. It's
called the civil suit.

ColonialCoinUnion

<< <i>Let's say I have a superb Transylvanian gold piece in my showcase. You walk up to the table and ask a price. I quote you $32,000. You know nothing about the coin or its value, but you love it and buy it. You figure it has to be somewhere within the realm of reason because I have a good reputation and all of my US coins seem to be priced realistically. You figured wrong. I bought the coin last week at a major auction in Zurich for $1200. It was one of 50 such pieces from a hoard sold at that same auction, all selling in the $1000 to $1500 range. And I only bought 3 of the 50. I would have bought them all if I thought they were selling for pennies on the dollar.

A couple of months later, you figure out how badly you have been screwed. Question: Do you have recourse? >>



Your hypothetical is pretty much exactly how it works in any of the more obscure areas of numismatics in which graysheets don't exist, online valuation guides are not available and prices are totally undefined. People can charge whatever they want and think they can get for a coin. And sometimes they find a buyer who doesn't know any better.

I've seen things pretty darn similar to your example many times in colonials.

So is there a recourse? I think there are 2, and they are both lame:

1) Never buy anything from or sell anything to said dealer ever again under any circumstances.
2) Post about the situation here in this chatroom with photos linked to the eBay Transyvanian section showing what the coin last sold for.

I choose 1.

coinkat

I didn't vote because I want to know what state the transaction took place

roadrunner

Is this sort of similar to asking $10,000,000 for the world's best 1794 silver dollar?

For what it's worth. What Andy describes is how many large dealers did business back in the 1970's and early 1980's. If it wasn't for slabbing they'd still be doing it.

roadrunner

calgolddiver

NO - I decided ... I bought it ... I own it ... 3 months later .... too bad .... it's mine

mrearlygold

For what it's worth. What Andy describes is how many large dealers did business back in the 1970's and early 1980's. If it wasn't for slabbing they'd still be doing it.

roadrunner >>





No doubt about it although I would add it wasn't/isn't just large ones.


Tom