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Counterfeits – The Battle Begins

Foot Soldiers try to take out counterfeit $2.50 Indian coin

The best protection against the threat of counterfeits is to buy coins from a reputable source

By Jeff Garrett for Numismatic Guaranty Corporation (NGC) ……

My term as President of the American Numismatic Association (ANA) will expire in August. I have told many friends and business associates that I still have much that I would like to accomplish. Unfortunately, the game clock is running down rapidly. One of the issues that faces the hobby is the proliferation of counterfeit coins that have entered the market in recent years. Anyone with a coin shop can tell you they are frequently offered material that is obviously not genuine. The coins range in quality from almost comical (incorrect dates for the Type, etc.) to coins that require close examination or third-party verification. I have seen many of these myself in our Lexington and Sarasota offices. The danger from counterfeits is real and an issue that must be addressed.

In recent months several leading hobby organizations have decided to attack the problem under the direction of the Industry Council for Tangible Investments (ICTA). The problem of counterfeit coinage is complex and one with no easy solution. It is probably no surprise to most that a majority of counterfeit coins on the market seem to have originated in China. With a little searching you can find fakes of almost any United States coin on the Internet. Coins are not the only thing being counterfeited and nearly every business group in the United States is facing similar problems. Many fashion houses around the world spend millions each year fighting this battle.

Obviously, the rare coin industry cannot devote these kind of resources to fighting the proliferation of fake coins. In my opinion, there are two strategies that would be the best use of our limited resources.

First, we need to work with law enforcement to encourage them to charge people with a crime when they are caught dealing in counterfeit coinage. This sounds simple enough, but in practice it requires a lot of education with the law enforcement community. Even the Secret Service, who is charged with protecting the integrity of United States money, has problems devoting time and staff to deal with fake coins. They have a threshold for involvement that is seldom reached when cases such as these arise. Plus, they have the unenviable task of dealing with cybercrime which has become a giant problem around the world. They’re also pretty busy guarding the President and his family.

Law enforcement on a local level will be an important tool dealing with this issue. As victims of these crimes come forward and the scope and size of the losses are reported, local law enforcement will hopefully try to bring those responsible to justice. People who deal in counterfeit coins need to feel the pressure of consequences or they will not stop their criminal activity. The IRS cannot audit everyone in the United States, but when they make examples of people who have cheated on their taxes, others take notice. The same idea should apply to those who sell counterfeit coins.

The second part of any strategy dealing with this issue is education. The ANA, the Professional Numismatists Guild (PNG), ICTA, NGC and every other organization with a stake in our hobby needs to educate consumers of rare coins about this problem. For a good reason, the ANA Summer Seminar class on counterfeit detection is among the popular classes and is usually sold out. Going forward we have plans to publish more material about fakes coins on the website. Other organizations have similar plans to educate their members and the general public.

Finally, the best protection against the threat of counterfeits is to buy coins from a reputable source. Third-party certification is also extremely important when buying coins above a certain value. Most victimization from counterfeits occurs when people are buying what they assume to be bargains. I always tell individuals to never buy rare coins unless the seller offers full refunds in case of any problem. Every reputable dealer in the country will guarantee authenticity of their products.

The battle against counterfeits has been going on since the origins of coinage. In recent years the problem has escalated, but hobby leaders have taken on the challenge of protecting those who collect coins. The problem will not be solved overnight, but the future looks much brighter.

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Jeff Garrett
Jeff Garrett
Jeff Garrett, founder of Mid-American Rare Coin Galleries, is considered one of the nation’s top experts in U.S. coinage — and knowledge lies at the foundation of Jeff’s numismatic career. With more than 35 years of experience, he is one of the top experts in numismatics. The “experts’ expert,” Jeff has personally bought and sold nearly every U.S. coin ever issued. Not a day goes by that someone doesn’t call on Jeff Garrett for numismatic advice. This includes many of the nation’s largest coin dealers, publishers, museums, and institutions. In addition to owning and operating Mid-American Rare Coin Galleries, Jeff Garrett is a major shareholder in Sarasota Rare Coin Galleries. His combined annual sales in rare coins and precious metals — between Mid-American in Kentucky and Sarasota Rare Coin Galleries in Florida — total more than $25 million. Jeff Garrett has authored many of today’s most popular numismatic books, including Encyclopedia of U.S. Gold Coins 1795–1933: Circulating, Proof, Commemorative, and Pattern Issues; 100 Greatest U.S. Coins; and United States Coinage: A Study By Type. He is also the price editor for The Official Redbook: A Guide Book of United States Coins. Jeff was also one of the original coin graders for the Professional Coin Grading Service (PCGS). He is today considered one of the country’s best coin graders and was the winner of the 2005 PCGS World Series of Grading. Today, he serves as a consultant to Numismatic Guaranty Corporation (NGC), the world’s largest coin grading company. Jeff plays an important role at the Smithsonian Institution’s National Numismatic Department and serves as a consultant to the museum on funding, exhibits, conservation, and research. Thanks to the efforts of Jeff and many others, rare U.S. coins are once again on exhibit at the Smithsonian Institution’s Museum of American History. Jeff has been a member of the Professional Numismatic Guild (PNG) since 1982 and has recently served as president of the organization. He has also served as the ANA President and as a member of the ANA Board of Governors.

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