Beware buying rare uncertified coins online, at flea markets and swap meets. Consumers are spending millions buying what they believe are rare coins, but they’re getting near-worthless Chinese-made counterfeits.
More than a million counterfeit coins manufactured in China have been fraudulently sold in the U.S., according to Coin World, a respected industry publication. Some of these were peddled as “replicas” but they were manufactured without the requisite “copy” stamp.
Roughly 99% of the replicas produced in China don’t contain the “copy” marking that’ required by the U.S. Hobby Protection Act, which is aimed at warning consumers that they’re getting a mass-produced replica rather than the original, according to Coin World. As a result, it’s easy to resell these coins at flea markets, swap meets and through Internet auctions, without giving the buyer any inkling that the coins could be fakes.
Fake 1916 D Mercury Dime
“Millions of dollars already have been spent on these fakes and potentially millions more may be unwittingly lost by consumers who mistakenly think they are getting a genuine rare coin,” said Paul Montgomery, president of the Professional Numismatists Guild.
How big of a difference does it make? A genuine 1916-D dime sells for about $700, but a replica can be had for $21.
“Generally the replicas being sold have zero commercial value,” Scott Schechter, vice president for the Numismatic Guaranty Corp. told me in an interview. “Most people are looking at a total loss.”
Consumers may be particularly vulnerable at a time when precious metal prices are hitting all-time highs, largely because consumers have become nervous about traditional investments such as stock and bonds, as well as the rapidly declining value of the U.S. dollar. Roughly $5 billion in rare coins are sold each year, even in the midst of today’s recession.
The Professional Numismatists Guild will also provide a copy of its booklet, “What You Should Know Before You Buy Rare Coins,” for $1 if you send a request to them at 3950 Concordia Lane, Fallbrook, CA 92028.