Are dealers, particularly PCGS dealers, under any obligation

Bochiman

to recognize coins that are overgraded (have turned?) in the holders possibly and get the material back to PCGS for evaluation and possibly removed from the market?

Looking at goldbully's thread on the NEN IHC and wondering about a collector buying that and getting screwed down the road whereas a dealer would likely know better and could work with PCGS better.......should NEN be talking to PCGS on it or should it just be "business as usual" for getting a coin and selling it?

Looking at this as more than NEN as well, it was just that thread that inspired it.

savoyspecial

in my opinion no, the dealers are under no obligation to do this.......the responsibility lies with us, the potential purchasers......i would suspect that this is why the plastic on the slab is clear: so we can see the coin and determine for ourselves whether it is properly graded by OUR standards

soty27

Pcgs dealers are under no obligation to do anything. IMO the indian mentioned in another thread should not even be for sale by any dealer let alone a pcgs dealer. I cant understand why any dealer would attempt to sell that coin as it is clearly a problem coin and should be sent to pcgs ASAP.

wondercoin

I just bought a pop 1 ultra rare platinum coin (year 2000 $100) for about $5,000 (worth closer to $20,000 if solid for the grade) and presented it to PCGS to remove from the database as the coin was an obvious mechanical error in my view. PCGS did so, the auction company agreed to waive it commission and my return fee (Ian at Teletrade), I asked for nothing, and (I am informed) Teletrade's consignor subsequently agreed to accept the lower grade on the coin from PCGS as he was an authorized dealer who had recently submitted the coin to PCGS and had no intention of screwing anyone (he never even examined the coin before sending it off to auction). Evreyone worked together and the problem coin no longer exists in the database.

Wondercoin

Bochiman

Mitch,

I remember you posting that. You did the 100% right thing and that was in my mind on this thread when I wrote it, as well as the goldbully thread.

I don't know what PCGS' deals are with the dealers when they become "authorized", which is part of why I asked.

I wouldn't expect "wanna-bes", "vest pockets", or a lot of the smaller guys to step up, but the larger folks, well, I would hope they would.
(and, just for the record....I am not pointing fingers at anyone posting in this thread or others, just using terms. Mitch is the only one that I have even an idea of his business from his postings and from having dealt with him a couple of times....a very stand-up guy in all ways I can see)

mike92694

i have a question. if the dealer is not the original pcgs submitter, then what about the person who has given/sold the coin to the dealer?

Stuart

<< Are dealers, particularly PCGS dealers, under any obligation >>

Bochiman: I recently attended a presentation by Don Willis (President of PCGS) at the Houston SW Money Show during which he answered my question about how collectors can avoid purchasing coins in counterfeit (i.e. Chinese manufactured) PCGS slabs.

His response was that the safest way is to purchase PCGS certified coins from an authorized PCGS dealer, because if they source such a slabbed coin, they are obligated to provide a purchase price refund to the buyer.

So in reply to your original question quoted above, yes PCGS Dealers are under certain obligations as mentioned above.

Bochiman

Thanks Stuart.

wondercoin

Bochiman - Thank you.

It has been years since I signed the PCGS Dealer (license) agreement, but as I recall, a provision in the agreement absolutely requires the licensee (dealer) to return to PCGS any coin that clearly (or some language to that effect) is not suitable for grade (that the dealer submits and gets back in error) and the dealer indemnifies PCGS from liability for his failure to do so.

Wondercoin

soty27

bociman,

Just a quick FYI. It takes next to nothing to become a pcgs certified dealer. Often times the biggest dealers are the biggest crooks/doctors. There is a whole lot that goes on in the coin world that no one mentions on this board. Just because someone is a pcgs/ngc certified dealer really means nothing nor are they somehow held to some higher level. Some of the biggest dealers work with mostly coins that are on (MEMO), numerous dealers do nothing but have consigned coins, These types of dealers have nothing to lose. Dealers who dont have any finacial investment in the coins they sell simply only have to worry about how large the profit is but there is no down side. Other large dealers with big names and great reputations have 0 money and have someone else who simply fronts them money for coins and in turn are simply making large profits from others with no finacial down side to themselves.

wondercoin

sofy29 - I believe they are held to a higher level by virtue of the licensing agreement they sign. Now whether PCGS aggressively enforces the agreement is another issue.

Wondercoin

soty27

<< <i>sofy29 - I believe they are held to a higher level by virtue of the licensing agreement they sign. Now whether PCGS aggressively enforces the agreement is another issue.

Wondercoin >>




Here is what you need to become a pcgs certified dealer.

Applicant must have been a full-time coin dealer for at least three years.
Applicant and key employees must not have been convicted of a felony in the past five years.
Applicant must have capitalization of $100,000 or more including inventory.
Minimum of three credit references.
Minimum of three PCGS Authorized Dealer references.

This is all there is to it.

wondercoin

soty27 - You are not stating what is contained in the licensing agreement one must sign after they meet what you consider to be the easy requirements. We are each talking about something different.

Wondercoin

soty27

<< <i>soty27 - You are not stating what is contained in the licensing agreement one must sign after they meet what you consider to be the easy requirements. We are each talking about something different.

Wondercoin >>



You are correct it appears as though I missed your point, my apologies.

PCGS certified dealers are supposed to be held to a higher standard although similar to ANA membership standards there is not a large enforcment of the standards.

WTCG

<< <i>bociman,

Just a quick FYI. It takes next to nothing to become a pcgs certified dealer. Often times the biggest dealers are the biggest crooks/doctors. There is a whole lot that goes on in the coin world that no one mentions on this board. Just because someone is a pcgs/ngc certified dealer really means nothing nor are they somehow held to some higher level. Some of the biggest dealers work with mostly coins that are on (MEMO), numerous dealers do nothing but have consigned coins, These types of dealers have nothing to lose. Dealers who dont have any finacial investment in the coins they sell simply only have to worry about how large the profit is but there is no down side. Other large dealers with big names and great reputations have 0 money and have someone else who simply fronts them money for coins and in turn are simply making large profits from others with no finacial down side to themselves. >>



wondercoin made a pretty good statement regarding the process and significance of becoming a PCGS authorized dealer. Other than the PNG, PCGS may possibly have some of the highest standards for approving new dealers. You'll often notice that many dealers will list their affiliations and while most will have NGC and NCS approved status, PCGS approval tends to be conspicuously absent from a lot of dealers' lists of references.

About the subject of some dealers taking coins on memo, there is more downside for them than meets the eye. Theft and loss aside, when a dealer takes coins on memo and has difficulties selling those coins, the consignors will begin to lose confidence in that dealer's ability to clinch sales and the dealer consequently will not have access to as many "nice" coins the next time they want to take coins on memo. Even with no aquisition risk in the monetary sense, it is still in the best interest of the "memo" dealers to sell as much as they possibly can. While their monetary risk may be minimal, they risk a lot in terms of goodwill and reputation. To put it in the simplist terms...if a dealer can't sell the coins he has on memo, then people won't give them coins to sell next time.

abitofthisabitofthat

I believe that the agreements were changed a year or two ago to add an obligation not to submit doctored coins. It can result in loss of authorized status. I am not sure of the exact language. Can someone verify and provide specifics?

coinguy1

<< <i>I believe that the agreements were changed a year or two ago to add an obligation not to submit doctored coins. It can result in loss of authorized status. I am not sure of the exact language. Can someone verify and provide specifics? >>

I believe that the agreements you are thinking of were always in place, but that PCGS reminded dealers of them in an effort to crack down on coin doctoring last year. see here

abitofthisabitofthat

Thanks, Mark - exactly what I was thinking. I am pasteing in the part I think most relevant. Certainly clarifies at least part of what the obligations of a PCGS dealer are:

Dealer shall not “doctor” coins or knowingly submit to PCGS coins which have been “doctored”. Coin “doctoring” involves the alteration of the appearance of a coin to attempt to increase its value, and may involve, among other things, adding substances to coins (such as, among other things, putty, wax, facial oils, petroleum jelly or varnish); treating coins with chemicals (such as, among other things, potash, sulfur, cyanide, iodine or bleach); heat treating coins in any way to alter their appearance; re-matting (“skinning”) proof gold; “tapping” and “spooning” ( i.e., physically moving surface metal to hide marks); filing rim nicks; or repairing coins (re-tooling metal).

Dealer and PCGS agree that PCGS would suffer irreparable damages if Dealer were to engage in coin “doctoring” and that PCGS shall be entitled to not only compensatory damage but also preliminary and final injunctive relief for any breach of Dealer’s obligation not to “doctor” coins or knowingly to submit “doctored” coins to PCGS. Dealer agrees that in the event PCGS incurs any attorney fees and/or cost and expenses as a result of said “doctoring,” including but not limited to investigating claims of alleged “doctoring,” and engaging in legal proceedings with Dealer or any third party relating to same, PCGS shall be entitled to reimbursement of such fees and costs from Dealer.

OregonCityGold

I love PCGS, but coin doctoring wouldn't be nearly so common if TPG graders spent more than 10 seconds looking at each coin, and if at least one grader used a microscope to look for evidence of doctoring. Also, note that right below the PCGS roadmap for all would-be coin doctors that abitofthisabitofthat posted above is PCGS's aggressive, ahem, interpretation of 18 USC 331:

“PCGS Authorized Dealers are encouraged to review and understand the dealer agreement and to understand the scope and application of Title 18 of the U.S. Code, Section 331,” said Guth.

Title 18, Section 331, involves the mutilation, diminution and falsification of coins, and states:

Whoever fraudulently alters, defaces, mutilates, impairs, diminishes, falsifies, scales, or lightens any of the coins coined at the mints of the United States, or any foreign coins which are by law made current or are in actual use or circulation as money within the United States; or

Whoever fraudulently possesses, passes, utters, publishes, or sells, or attempts to pass, utter, publish, or sell, or brings into the United States any such coin, knowing the same to be altered, defaced, mutilated, impaired, diminished falsified, scaled, or lightened;

Shall be fined under this title or imprisoned not more than five years, or both."