Tough Question: Should authentication companies add a "destruct clause" for counterfeits?
RogerB
Posts: 8,852 ✭✭✭✭✭
With all the counterfeit and altered coins about, and the problem growing, should authentication companies add a clause to their submitter agreement, to wit: "Submitter agrees that any coin or medal submitted for authentication which is found to be counterfeit shall be destroyed and its remains returned to the submitter at authenticator's option."
[Pine box not included....]
Responses should be interesting to read. 
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Comments
What's the clause say about counterfeit coins that are found to be slabbed as authentic by said authentication company? God knows there are more than a "few".
Never going to happen due to liability. Authentication is an opinion. They can be wrong.
Absolutely not, both services have called genuine items "not genuine".
What is now proved was once only imagined. - William Blake
No.
Even if they were always right counterfeits shouldn't be destroyed either.
Once a coin is identified as a counterfeit it poses little danger and it is illegal to try to trade it as genuine.
I'm reminded the US Secret Service destroyed several genuine 1969-S DDO Lincolns because they were believed to be fake. Of course the services are better at this determination than the SS ever was.
Won't happen.
No, I was told once by Universal that I needed to deface a counterfeit $20 gold piece. If the coin has metal or other value, especially if it is an old contemporary counterfeit, it is worth money.
The Walton 1913 nickel would have been destroyed. It was once determined to be fake.
Who authenticates the authentiactors?
A TPG threatening to destroy a submitter's coin it thought was fake would see their submissions tank out of fear they'd make a mistake and destroy a good coin.
If counterfeits are to be destroyed, the best way (by which I mean effective and cool rather than a really good idea) would be missile strikes at their points of origin.
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Why not?
Things seem to go POOF all the time in here.................
Pete
No. There's no guarantee that it's not a real thing and just hasn't been documented yet. odds are low it would be that, but do you want to risk it?
No.
Joe.
https://www.ngccoin.com/coin-grading/ngc-guarantee/
https://www.pcgs.com/guarantee
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Kinda reminds me of the death penalty.
Lance.
Imagine the payout on that mistake?
Send em back in a PCGS logo urn.
No, once identified as counterfeit they pose no threat not to mention the fact that third-party grading service could be wrong. So, it is not their place to make that decision. Besides, some people even collect counterfeits.
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https://www.ngccoin.com/registry/competitive-sets/16292/
It would be zero. Once the coin was destroyed, how would you determine they had made a mistake?
Destruction is impossible. You might want to dial back the question: Should TPGs have a clause in their submission agreements to allow SEIZURE of counterfeits?
It would still kill business, I would think, but at least the coins would not be destroyed and a submitter would have the option of contesting the opinion and possibly recovering their coin - after long, costly litigation.
THere would be a few less 1913 5c’s around today if this was in practice decades ago
Latin American Collection
I assume they would need to document reasoning for determining a coin is a fake before destruction.
If the reasoning was shown to be faulty, the judgement could be called into question.
Here's what PCGS says:
https://www.pcgs.com/guarantee
They could be returned in cans of worms since that's what such a policy would be.
You want a missile strike against Tucson, AZ?
He77 no! I used to be a serious collector of coins of Honduras. There exists a genuine five pesos gold piece stamped with the word FALSCH because a coin authenticator at a German bank had no idea how crude the coinage of Honduras was at that period.
No... Disposition of coins is the realm of the owner. Unless the SS steps in, then Big Brother takes over....Just look at the case of the 1933 double eagles.... Cheers, RickO
Every counterfeit needs a home... even if it’s the city or county landfill.
Ya that would be great . We are positive this coin is fake so we are seizing it sorry , not sorry ,
It would not be practical as it would take away the owners option of returning it to whoever they bought it from.
Leaving the submitter with no chance of getting a refund on fakes would be a short lived business model.
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I'm guessing that RogerB is not surprised by the responses he is getting so far.
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"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
It won't happen, and it shouldn't happen. What if the grading service happens to be wrong, and the piece was genuine? Nobody is perfect, not even in spotting counterfeits.
No
You could prove the chemical signature of the metal is identical to known specimens.
That's not definitive for all metal types and all time periods. Especially in the more modern era, they probably aren't sourcing the metals in a single region with a single trace signature. It worked best for territorial gold where the source was singular and known.
Also, that presumes they aren't destroying them and still have access to the coin. XRF trace analysis isn't cheap, they certainly wouldn't routinely run it on all coins.
That would be what the govt does
No. I like what ICG does- they holder the coin anyway with an orange label that says the coin is not authentic (not sure of the actual wording) and is for educational purposes only.
Including Morgan dollars in steel; 1864 Washington quarters?
BTW - An authentication company calling a coin counterfeit or questionable authenticity does nothing to remove it from commerce. The comment, "Once a coin is identified as a counterfeit it poses little danger and it is illegal to try to trade it as genuine," ignores reality. The danger exists as long as the counterfeit exists.
Do collectors want "somebody else" to do the clean-up for them?
They should be required to counter stamp it "COUNTERFEIT" then slab it.
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I am glad that you referenced this, I may have to use it in my reconsideration submission.
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Oh the days when we body bags back as grades. What a learning experience.
No. Like their grade, it's an opinion.
Gold has a world price entirely unaffected by accounting games between the Treasury and the Fed. - Jim Rickards
No, simply because the property is NOT theirs to deface.
"This coin has been graded - Counterfeit"
"This container will self-destruct in five minutes"
The Mysterious Egyptian Magic Coin
Coins in Movies
Coins on Television
Interesting story about how "everyone" thought a 1913 V nickel was fake, until it was proven genuine.
http://www.businessinsider.com/fake-nickel-from-1913-sells-for-31-million-2013-5
PCGS does it the right way, returning the fake coins to the submitter. The legal problems from getting sued by submitters, wouldn't be worth the action of destroying the coin, regardless of any clause of some sort.
To answer your question, no. It would be interesting if they offered a nominal amount, say a dollar or two, to keep the coin in an archive.
"A dog breaks your heart only one time and that is when they pass on". Unknown
Guess the big question is what they consider "Current market values" hopefully they are using their extremely overinflated price guide price. Also doesn't say anything about recouping the initial grading fees. Guess the owner is sol.
Why the speculation and animosity? Here's an 2009 article saying they had paid out over $7.3M for their guarantee, paying out $1,945,755 in 2008 alone.
https://www.pcgs.com/News/Pcgs-Grading-Guarantee-Update
Here are some specific counterfeits:
And doctored coins: