Fake Coins are a Growing Concern

Fake

By Fake coins, I actually mean Counterfeit, which are coins sold to deceive us into thinking the coin is real. They are also called replicas, copies, imitations and other words to try to get us to gloss over the fact that the coin is not actually genuine.

On eBay this week there was an Australian Funnel-web spider 1oz silver coin for sale. At just £3.20 it looked to be a bargain. It was even offered with a certificate. It took fair bit of reading until one line in the description added “1oz Silver clad coin”. Clad is just another name for plated. It was actually nickel-plated.

A Chinese website is offering “gold sovereigns” for £5. Not likely to fool many at that price, but what when someone tries to resell it at £200?

1797 Cartwheel Two Pence
1797 Cartwheel Two Pence. Real or Fake?

The same site was offering a 1797 Cartwheel twopence, made from copper, brand new and very like the real thing, for only £3.50. How difficult will it be in future to sell your genuine Cartwheel twopence for £300 when the market has so many fakes?

I remember hearing a top dealer describing a client’s coin as “one of the best replicas he’d ever seen”. It was amusing until the client told him he’d paid over £2,000 for it while on holiday believing it to be a bargain. Many of us may not find out we have fakes until we cash our retirement pot.

A gold sovereign may actually have the right amount of gold, but what if the date was altered to make it a rarer and therefore a higher priced coin?

Counterfeiting is common

Counterfeiting is illegal but it is becoming an open and common occurrence, and not limited to bullion and numismatic items.

Last year the UK changed the design of the one pound coin as 3% of circulating one-pound coins were fake. One in 30 counterfeit is serious.

Last week US Congressmen Alex Mooney criticised the United States Mint for its “lack of awareness or action on the growing problem of high-quality counterfeits”.

How can we tell a fake coin from a real coin?

Calling a fake can take a lot of experience. Dealers who handle coins on a daily basis often talk about things feeling “not quite right” and have little tricks to give them indicators. For amateur collectors it can be quite difficult if not impossible.

Metal testing kits are good but not always 100%. A lot of testing may involve scratching or toning the coin which is destructive to the coin and it’s value. X-Ray guns are excellent but are extremely expensive (5 figures expensive).

My best advice is:

⋅ Buy from an established, reputable dealer or the Mint itself. You may pay a little extra but they will assess the coin and guarantee its genuineness, usually with a money back guarantee.

⋅ If you prefer, you can meet the dealer in person at their shop or at a coin fair/show and examine the coin yourself before purchase. Negotiate the price!

⋅ Don’t meet unknown private sellers in private places, especially if you are carrying cash.

⋅ Be very wary of buying from overseas web sites.

⋅ There are plenty of fake products on ebay, not just coins. Many times the person selling does not realise that their coin is fake. Look at the sellers’ ratings, read the comments. Do they usually sell coins? Are they local or overseas? Do they take returns and what does it cost to return them?

⋅ Don’t assume the bargain price is because they don’t know what they are selling.

⋅ If the price seems too good to be true then it’s probably not.

⋅ High priced coins should be sent by recorded delivery and require a signature.

⋅ Some Coin grading services (slabbing) guarantee the grade of the coin and its authenticity but check carefully with the documentation. Some slabs may be part of the counterfeit operation. Slabbing can be expensive so is not always done (especially in the UK) except for high-value coins.

⋅ Consider paying with a credit card, even if using PayPal. Credit card transactions may give some protection if the purchased product is not as advertised or fails to turn up. Read the small print or ask your bank.

⋅ If you have any concern or worry about the coin or the seller, then don’t buy. There will be another day.


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End Date: Saturday Dec-22-2018 20:13:40 GMT
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