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Collateral damage to the hobby from the lawsuit?

jhdflajhdfla Posts: 3,025 ✭✭✭
I'm wondering how much damage will be done to the hobby from this lawsuit, regardless of whether PCGS wins or not. Is it possible that so many collectors will be turned off by all this that

they will no longer remain in the hobby? Maybe some will think this is just the tip of the iceberg, and the percentage of coins which have been manipulated over the years is so vast, that they

will exit the hobby for good. Or how about the folks that built up sets and were customers of some of the named defendants (who remain innocent unless proven otherwise, BTW).

Wonder how this guy feels right now:

Registry set

If Sil is found to be innocent, won't the damage already be done?

Virtually everyone has applauded the action taken by PCGS. Events like this sometimes take on a life of their own with unintended consequences.


I'm curious to hear some views of others on the damage that may end up being done here to the hobby inadvertently because of the suit.

Comments

  • JulianJulian Posts: 3,370 ✭✭✭
    This is certainly a problem, but it is collateral damage. There is no way to eliminate it unless the suit goes away very quickly. Hopefully, the clients will not lose confidence in numismatics.

    We must insist that none of the accused are guilty until they admit it or a jury finds against them.

    We have to offer our continued support to collectors that have questions. Some will chose to have their coins re-examined by PCGS or maybe even CAC.

    We also have to be careful not to damn the accused, absent admission or court findings.
    PNG member, numismatic dealer since 1965. Operates a retail store, also has exhibited at over 1000 shows.
    I firmly believe in numismatics as the world's greatest hobby, but recognize that this is a luxury and without collectors, we can all spend/melt our collections/inventories.

    eBaystore
  • TahoeDaleTahoeDale Posts: 1,785 ✭✭✭
    Sure, there will be some collectors who will be reticient to buy certain coins in higher grades, even on the recommendation of known dealers, much less on their own.

    However, it may be a boon to Secure Plus, where every effort is made to qualify the coin's grade, authenticity, and surface damage and alteration. With a guarantee!

    These coins should bring more in the market place, not only for the Plus, if any, but also for the additional assurance of a specific review to try to eliminate problem coins.

    There will still be problem coins, but the TPG's are now shouting loud and clear-- you may/will will be sued.

    Overalll, a great move by PCGS that should be profitable for all.
    TahoeDale
  • JustacommemanJustacommeman Posts: 22,847 ✭✭✭✭✭
    Hi John

    I hear where you are coming from on this. Please see my points 3 & 4 from the "Nailed" thread below. FYI- If I was that Sil registry set customer I would get all those coins into the PCGS Secure Plus program stat and take it from there. Note the glowing note of approval by PCGS in the comments area of the set. MJ

    3) This actually could be very tough short term for the coin market. Uncertainty normally breeds caution and a wait and see attitude ensues which fosters lower prices. Long term this could be great. (hopefully)

    4) I think CLCT stock therefore could be in for a tough short term ride also. It's a low volume ultra small capitalized stock so maybe it could be supported by interested parties for awhile.

    Walker Proof Digital Album
    Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
  • mrearlygoldmrearlygold Posts: 17,858 ✭✭✭
    It may eventually slow down the average person buying coins at auctions based on images.
  • OPAOPA Posts: 17,104 ✭✭✭✭✭


    << <i>4) I think CLCT stock therefore could be in for a tough short term ride also.

    Not likely...not with a dividend rate of $1.20 per share p/a.
    "Bongo drive 1984 Lincoln that looks like old coin dug from ground."
  • tradedollarnuttradedollarnut Posts: 20,145 ✭✭✭✭✭
    Once upon a time, a collector wanted to sell me some of his early gold coins and I was very interested - until I found out who he bought them from. He couldn't understand why I instantly went from hot to cold on the deal.

    Maybe now he does...
  • BroadstruckBroadstruck Posts: 30,497 ✭✭✭✭✭
    jhdfla, That registry set of quarter eagles is retired and have most likely been dispensed back into the marketplace image
    To Err Is Human.... To Collect Err's Is Just Too Much Darn Tootin Fun!
  • dpooledpoole Posts: 5,940 ✭✭✭✭✭
    I don't know why there would be collateral damage from the lawsuits. Collectors have heard about coin doctors forever, and have been burned. The general public may not know specifically about doctoring, but have certainly heard about counterfeiting, and so would not be surprised to learn that this hobby, like all the others, has major pitfalls for the unwary novice.

    I think it'll help for people to know that this hobby, at least, is doing something about policing itself.

    Go PCGS.
  • JCMhoustonJCMhouston Posts: 5,306 ✭✭✭


    << <i>We must insist that none of the accused are guilty until they admit it or a jury finds against them. >>



    Perhaps, but you would be foolish to buy any big time coins from the named parties, and just personally speaking I wouldn't spend a dime with them even if they had something I collected.

    We collectors constantly hear that "everyone" knows who the coin docs are, everyone except the collectors perhaps. Why don't some of the dealers step up and let us know if these are the same guys or not.
  • BarryBarry Posts: 10,100 ✭✭✭
    Anybody who didn't know prior to the lawsuit that this went on had their head in a hole in the ground. The only additional info provided was the names of some of the culprits.
  • NicNic Posts: 3,340 ✭✭✭✭✭
    A few years ago I wanted to buy a nice original AU 1838 $10. During the 1st day of a FUN Show I was told dealer X had one. I went to their table only to find out that one of the "innocent until proven guilty" had bought it the day before. My heart sank. I went to the IUPG's table and was told the coin was not DONE yet.


    K
  • TwoSides2aCoinTwoSides2aCoin Posts: 43,793 ✭✭✭✭✭


    << <i>Once upon a time, a collector wanted to sell me some of his early gold coins and I was very interested - until I found out who he bought them from. He couldn't understand why I instantly went from hot to cold on the deal.

    Maybe now he does... >>




    I had a dealer not buy from me for the same reason. He asked, "Did you get that from ___ _____ ? " I said , "yeah". He said, "I'm not interested and you would do well to steer clear of him."
    Then something my mom once said jumped into my head: " A leopard cannot change it's spots"

    It's a brutal business in more ways than one. There's a lot of back biting on both sides and that's why it's imperative to find others who are "honest and fair" : Two qualities which rarely exist in today's world, as so many jockey for position, wealth and fame.

    I am wondering what a lawsuit will bring for the collateral damage already bestowed on the hobby of kings , and not so much about what damage this will cause to the hobby.

    If anything, it should spawn a new breed of collectors. image Moderns
  • bidaskbidask Posts: 13,834 ✭✭✭✭✭


    << <i>It may eventually slow down the average person buying coins at auctions based on images. >>

    I think this is quite true.......

    In addition, at the CSNA show in 2006 I bought a coin from a major dealer that was high 5 figures. The coin had come out of a Superior auction that spring. Thats right, Superior.

    I thought the coin looked spectacular. I though I really had something special. The coin was in a pcgs slab.

    In fall of 2009 I had the coin reviewed by CAC. Came back puttied. My heart sank and I contemplated quitting numismartics. I stayed that way for several months.

    I suggest if anyone has ever bought any coins from a Superior Auction......HAVE THEM REVIEWED by Secure Plus or CAC!
    I manage money. I earn money. I save money .
    I give away money. I collect money.
    I don’t love money . I do love the Lord God.




  • DaveEDaveE Posts: 367
    Are people buying Toyotas again? The collateral damage will be short term.

    Do not forget, this is a complaint to shut down people who ruin coins.

    Knowledgeable collectors knew this stuff was happening forever.
  • rickoricko Posts: 98,724 ✭✭✭✭✭
    I believe collateral damage, as far as collectors go, will be minimal, if indeed any effect at all is realized. The damage to those named in the suit may be significant, no matter the outcome. Cheers, RickO
  • DMWJRDMWJR Posts: 5,974 ✭✭✭✭✭
    You pose and interesting question, but it only takes into consideration one aspect. The other is the "collateral damage" that occurs every day due to the actions of these people. Collectors who have already been duped vs. those who will be taken in the future. Yes, shining the spotlight on this problem will scare away a few, but it will also preserve a few collectors down the road.

    I propose nothing is lost, and much is gained by the suit.
    Doug
  • DaveEDaveE Posts: 367
    Bid/Ask Secure Plus will only identify if another Secure Plus coin had been changed. It can not identify putty on first time submission to the service. Thats important to know. Your best bet (which is what I do) is send the coins to CAC-its also the cheapest way to go.
  • bidaskbidask Posts: 13,834 ✭✭✭✭✭


    << <i>Bid/Ask Secure Plus will only identify if another Secure Plus coin had been changed. It can not identify putty on first time submission to the service. Thats important to know. Your best bet (which is what I do) is send the coins to CAC-its also the cheapest way to go. >>

    I did send it to CAC and they sent it back saying the coin was puttied. A high 5 figure coin in a pcgs slab that came out of a SUPERIOR auction. I am not so sure pcgs could not identify putty, on a coin in their slab, if it was resent through their secure plus service. I would expect they could.

    If they cannot, that would be a huge letdown. Edit to add: I don't blame pcgs for holdering this coin. Thats why its such a tough fight against good doctors.

    There are alot of AT coins floating around out there in pcgs and ngc slabs
    I manage money. I earn money. I save money .
    I give away money. I collect money.
    I don’t love money . I do love the Lord God.




  • tradedollarnuttradedollarnut Posts: 20,145 ✭✭✭✭✭
    There are alot of AT coins floating around out there in pcgs and ngc slabs

    Because the policy used to be 'if we're not 100% certain it's AT then we'll slab it' I'd have to agree with this. I personally know of at least 3 high 5 figure coins in those slabs that are for certain AT.
  • AnalystAnalyst Posts: 1,438 ✭✭✭
    JHDFLA <<I'm wondering how much damage will be done to the hobby from this lawsuit, regardless of whether PCGS wins or not. Is it possible that so many collectors will be turned off by all this that they will no longer remain in the hobby,>>

    This is like saying that we should not try to stop the sale of forgeries because the collectors who have been buying forgeries, or who read about the sale of forgeries, will be “turned off.” Obviously, there is a need to identify the producers and distributors of forgeries, and the specific items themselves. Collectors will be more “turned off” over the long run if actions are not taken to prevent the production and distribution of forgeries. The same is true of doctored coins.

    Many collectors find the faces of their Morgan Dollars ‘falling apart’ after a couple of years. Weird blue or green gunk develops and rises on the surfaces of many doctored Proof gold coins. One PNG member is allegedly chemically altering Lincoln Cents to make them bright red, but I am told these turn strange colors over a one to three year period.

    Collectors will be more “turned off” when they find out that some of their coins have added substances or have been polished years after these were minted. Artificial toning is often unstable. Waxes that are added to coins tend to chemically react.

    JHDFLA, hopefully, you are not implying that keeping quiet about coin doctoring would be better for collectors. There will be more collectors over the long run if the PCGS files additional lawsuits, similar to this one, in the near future.

    The collateral benefits from this lawsuit will greatly outweigh the collateral damages, by a factor of more than 100 to 1. Education is superior to ignorance. Identifying and taking steps to address problems will impress collectors. Besides, most collectors are aware that coin doctoring occurs. Collectors now have more confidence in the PCGS and in the coin collecting community.


    Some discussion of the topic of coin doctoring in this weekly column

    Natural Toning, Dipping and Coin Doctoring, Part 1

    Natural Toning, Dipping and Coin Doctoring, Part 2

    Natural Toning, Dipping and Coin Doctoring, Part 3

    PCGS Message Board Thread about Collecting Naturally Toned Coins Articles

    Complaint filed by CU-PCGS


    "In order to understand the scarce coins that you own or see, you must learn about coins that you cannot afford." -Me
  • DrPeteDrPete Posts: 1,497 ✭✭✭
    Bid/Ask

    The coin you paid five figures for and now seems to be suspect, send it in for review at PCGS. It may be an additional coin that PCGS can look at and detect doctoring and show financial harm done. You may end up with PCGS buying the coin from you and having an additional example for their suit.

    Good luck whatever you decide to do.
    Dr. Pete
  • TevaTeva Posts: 830
    It's always a two way street but most people support anything
    that may have the effect of cleaning up the hobbie.
    It may have collateral damage if PCGS loses there lawsuit
    but a win may bring some stability and trust and safety that
    collectors do not have now.
    Give the laziest man the toughest job and he will find the easiest way to get it done.
  • cardinalcardinal Posts: 2,005 ✭✭✭✭✭
    Once upon a time, I assembled a complete type set of early gold. All spectacular coins, such as a gem MS65 1795 Small Eagle $5 in a first-generation NGC holder with gorgeous ORIGINAL orange color. The capstone of the set was THE 1800 $5 that John Dannreuther, Jeff Garrett and Ron Guth all agreed was the single finest 1800 known to exist. It realized a monster record price at a Stack's auction while RAW and slabbed immediately after auction (first time through PCGS) as MS66. Experts who examined it thought it was a strong shot at a "67," so I sent it to NGC to give it a try, and it came back MS66*.

    While I was not looking to sell the set (and only shared it with a very few select people), one collector who I had mentioned it to and shared some images expressed an interest in seeing the coins in person and possibly buying them, but then changed his mind and never saw the coins in hand. Obviously, that collector didn't keep my set confidential, because I started receiving eye-popping offers for the coins from people I had never even heard of before. I ultimately sold them through a representative to a billionaire for a VERY handsome profit (actually, for more than 30% above the figure I had discussed with that collector), with several of the pieces setting new price records (like $400K for that 1800 $5). That capstone piece, the monster 1800 $5, was something I purchased from Sil immediately after the Stack's auction (and, actually, that was the only coin in the set from Sil). The coin was wholly original and un-messed with, as John Dannreuther, Jeff Garrett, Ron Guth, and it's price tag would agree.
  • ElcontadorElcontador Posts: 7,412 ✭✭✭✭✭
    John, I don't think so. The fact that coin doctors operated with impunity for decades has been a deterrent for many to buy coins in the first place. I was around in the bad old days. Usually, but not always, I was able to spot a problem coin.

    Until now, the risks to coin doctors was close to nothing. In the best case scenario, they could doctor a coin, get it into a holder, sell it and make money. If it went bad, PCGS or NGC would make the owner of said coin whole. In the worst case scenario, the doctor couldn't get the coin into a slab.

    From the get-go, a dealer friend introduced me to people in the industry who he said were honest and knew how to grade. He also told me whom to avoid, who had nice, but overpriced coins, and who had overpriced coins, period. I learned why one should never buy a coin from an image.

    I'd think the fact that some people who are ruining this hobby for a fast buck may finally be exposed can only help people have a bit more confidence in buying coins.
    "Vou invadir o Nordeste,
    "Seu cabra da peste,
    "Sou Mangueira......."
  • MrEurekaMrEureka Posts: 23,891 ✭✭✭✭✭
    the policy used to be 'if we're not 100% certain it's AT then we'll slab it'

    That's somewhat misleading. My impression is that the policy was more like "if we're not 100% certain it's AT, and if it looks natural enough, then we'll slab it". And would you want it any other way?
    Andy Lustig

    Doggedly collecting coins of the Central American Republic.

    Visit the Society of US Pattern Collectors at USPatterns.com.
  • The financial impact to the dealers, deservedly or not, will be far greater than to the market or to PCGS. Collectors will treat these defendents like they have the numismatic equivalent of syphilis.

    On a positive note, the suit will increase confidence in PCGS and move dealers and collectors to Secure Plus and future tech to prove they have solid coins
  • orevilleoreville Posts: 11,771 ✭✭✭✭✭
    I bought an old 44 piece circulated slabbed $20 Liberty set in late 2008. 60% was slabbed by PCGS and 40% was slabbed by NGC.

    34 of them was stickered by CAC, mostly PCGS. However, 2 of them, both PCGS were determined to be puttied.

    I sent them back to PCGS and asked them to remove the putty which they did under the PCGS spot review program. Sometimes putty is used when it was not critically necessary to hide a gouge/scratch or two.

    When the two PCGS $20 Libs were returned minus the putty, the scratches, now fully exposed did not look too bad at all. In fact, one of the two previously rejected CAC submitted coins passed the second time around.

    So if you do locate a puttied coin, all is not necessarily lost. Sometimes, the putty was over-zealously used when the underlining coin was not all that bad to begin with.

    There is always some hope.
    A Collectors Universe poster since 1997!
  • jhdflajhdfla Posts: 3,025 ✭✭✭


    << <i>JHDFLA <<I'm wondering how much damage will be done to the hobby from this lawsuit, regardless of whether PCGS wins or not. Is it possible that so many collectors will be turned off by all this that they will no longer remain in the hobby,>>

    This is like saying that we should not try to stop the sale of forgeries because the collectors who have been buying forgeries, or who read about the sale of forgeries, will be “turned off.” Obviously, there is a need to identify the producers and distributors of forgeries, and the specific items themselves. Collectors will be more “turned off” over the long run if actions are not taken to prevent the production and distribution of forgeries. The same is true of doctored coins.
    >>




    I don't believe you can equate doctoring with forgeries, there is a big difference between the two.

    I also believe that an industry wide definition of doctoring needs to be spelled out. Dipping is generally accepted, although to many of us it is doctoring. Spot removal is considered doctoring, but it can enhance the appearance of a coin. Removing metal from the surface of a coin as in lasering would be almost universally accepted as doctoring.

    Another thing to consider, although maybe some do not want to acknowledge it, is that doctoring of coins has been going on for many, many years, and I submit to you that there are far more coins that have been messed with in one fashion or another over time than those that have not.

    In another thread, sanction II responded to oreville with the statement, "I have no idea other than a general feeling that if PCGS is not successful in its lawsuit, some collectors will sour on the hobby and either quit altogether or limit their participation to areas where substantial dollars are not tied up in coins due to the risk of getting burned." That about sums up my feelings as well.

    John
  • truthtellertruthteller Posts: 1,240 ✭✭
    Another thing to consider, although maybe some do not want to acknowledge it, is that doctoring of coins has been going on for many, many years, and I submit to you that there are far more coins that have been messed with in one fashion or another over time than those that have not.


    When I got into the hobby about 30 years ago, the local coin shops all had their own stories about doctoring coins, from the standard coin in the potato to baking in the oven to reengraving the lettering on coins. The only thing that has changed is the sophistication of the doctor and the buyer. Back to basics, if you cannot grade or authenticate a coin out of the holder, this hobby may not be for you. All the holder does is make a crutch out of many a collector, never really sure enough to spend $500 for a coin out of a holder.



    TRUTH
  • DaveEDaveE Posts: 367
    Cardinal, not every coin Sil sold was doctored. You apparrently do not know him well.

    Dealers know his activities so well they named puttied coins "Silled" ame thing for what he does to Matte PR gold.

    The one thing about this guy-its never his fault. He admits to nothing.

    Still, he is innocent until the court proves otherwise.
  • HalfStrikeHalfStrike Posts: 2,202 ✭✭✭
    If coins could talk I think there would be a lot of shocked collectors out there.
  • AnalystAnalyst Posts: 1,438 ✭✭✭
    DPoole <<I don't know why there would be collateral damage from the lawsuits. Collectors have heard about coin doctors forever, and [quite a few] have been burned [and then learned about the practice]. The general public may not know specifically about doctoring, but have certainly heard about counterfeiting, and so would not be surprised to learn that this hobby, like all the others, has major pitfalls … [It will] help for people to know that this hobby, at least, is doing something about policing itself.>>

    Barry<< Anybody who didn't know prior to the lawsuit that this went on had their head in a hole in the ground. The only additional info provided was the names of some of the culprits.>>

    Barry, we need to keep in mind that defendants are presumed innocent, and not liable, when they are accused. So far, there is not been a court decision regarding doctoring coins for the purpose of tricking PCGS or NGC graders, and eventual buyers, into thinking that the coins are of much higher quality than they really are.

    DPoole and Barry point out, correctly in my opinion, that most collectors are aware that coin doctoring occurs and there exist doctored coins in PCGS and NGC holders, with numerical grades. There is minimal collateral damage and there will be tremendous collateral benefits. As I explain in my analysis of this suit, we learn far more than just the names of six people who have been accused. We learn of a very good definition of coin doctoring in the PCGS dealer-submitter agreements and we learn about several laws that coin doctors may possibly be violating.

    The readers of this thread may enjoy the section, ‘Is Coin Doctoring a Crime,’ in my analysis. Also, I quote John Albanese, Dr. Duckor, and our own SaintGuru. I discuss the extant of coin doctoring and the number of effective coin doctors, as well.

    My Analysis of the PCGS Lawsuit Against Alleged Coin Doctors

    Second Weekly column that includes a discussion of how NGC can employ technology, which the NGC already employs, to discourage coin doctoring


    "In order to understand the scarce coins that you own or see, you must learn about coins that you cannot afford." -Me
  • bidaskbidask Posts: 13,834 ✭✭✭✭✭


    << <i>DPoole <<I don't know why there would be collateral damage from the lawsuits. Collectors have heard about coin doctors forever, and [quite a few] have been burned [and then learned about the practice]. The general public may not know specifically about doctoring, but have certainly heard about counterfeiting, and so would not be surprised to learn that this hobby, like all the others, has major pitfalls … [It will] help for people to know that this hobby, at least, is doing something about policing itself.>>

    Barry<< Anybody who didn't know prior to the lawsuit that this went on had their head in a hole in the ground. The only additional info provided was the names of some of the culprits.>>

    Barry, we need to keep in mind that defendants are presumed innocent, and not liable, when they are accused. So far, there is not been a court decision regarding doctoring coins for the purpose of tricking PCGS or NGC graders, and eventual buyers, into thinking that the coins are of much higher quality than they really are.

    DPoole and Barry point out, correctly in my opinion, that most collectors are aware that coin doctoring occurs and there exist doctored coins in PCGS and NGC holders, with numerical grades. There is minimal collateral damage and there will be tremendous collateral benefits. As I explain in my analysis of this suit, we learn far more than just the names of six people who have been accused. We learn of a very good definition of coin doctoring in the PCGS dealer-submitter agreements and we learn about several laws that coin doctors may possibly be violating.

    The readers of this thread may enjoy the section, ‘Is Coin Doctoring a Crime,’ in my analysis. Also, I quote John Albanese, Dr. Duckor, and our own SaintGuru. I discuss the extant of coin doctoring and the number of effective coin doctors, as well.

    My Analysis of the PCGS Lawsuit Against Alleged Coin Doctors

    Second Weekly column that includes a discussion of how NGC can employ technology, which the NGC already employs, to discourage coin doctoring >>

    Your analysis of the PCGS lawsuit is very well written....
    I manage money. I earn money. I save money .
    I give away money. I collect money.
    I don’t love money . I do love the Lord God.




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