Is NGC Registry fraud possible?
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4 posts in this topic

In this day and age of Internet shenanigans wouldn't it be possible for a high-rating Registry Set to be verified without the submitter owning a single coin?

The reason I bring this up is because some Registry Winners provide no photos, no comments, and how is it known that they really own the coins?  Does NGC contact them directly asking for proof of ownership before granting an award?

For example, imagine an unscrupulous member initiates a Registry Set.  Then the slots get filled with valid coins from dealer inventory images that reveal holder brand/coin grade/holder ID number.  NGC verifies that the coins match known coins — holder, grade, ID number — but there is no way for NGC to investigate further without contacting the member for proof of ownership.  And since the coins reside with dealers, the coins would not be in other member Registry Sets, which could raise a red flag for NGC to investigate further.  And for NGC to investigate dealer inventories, which change all the time, this sort of crosscheck might be prohibitive from a logistics perspective.

Admittedly, this is an extreme example, and the key phrase is "unscrupulous member."  Still, does NGC go the final yard to assure authentic collections, and if so, what would that final yard be?

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Bob,

you make a great point. Of course fraud in the registry possible, just like it is pretty much anywhere else. 
However, I think NGC holds cheaters accountable. If anyone was caught they would be banned. And all it would take is for someone to report they owned one of the coins by adding to their coin inventory. Also, NGC could ask someone for some “proof” if a member reported evidence of cheating. 
not a perfect system for sure...

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The scenario you have poised is not hard at all unfortunately, in fact its very easy to do.  I'm sure there has been fraud in the registry before but thankfully it is not widespread as most people are more honest than dishonest.  It has been a few years but I seem to remember that someone got caught doing this, I do not recall the specifics of who or what or even what happened to that person.  I would expect that NGC would delete any sets and ban the person found responsible of doing this.

I can say that NGC does not require members to provide proof of ownership unless another registry member also claims to have the same coin.   When that happens NGC will contact the member and ask for him/her to provide proof of ownership before any transfer of ownership occurs.  There are many valid reasons why a coin might be claimed by two registry participants, a very simple one is that a member may have passed away and his family may not be aware of his participation or know how to remove his sets from the registry.   I saw this happen about 5-6 years ago with a high level Lincoln set, I and another Lincoln collector noticed the coins were being auctioned off yet the sets were still listed on the registry.  We both contacted NGC and provided the auction info for a number of the coins from that set.   Another very real and somewhat common possibility is that someone has a typo when entering a coin into their inventory/sets.  Very simple and easy to correct but can cause issues if the real owner is unable to respond to the NGC request for ownership in time.

As a registry participant I hope and expect that the other registry members are honest and act honorably, but I also know that there is sometimes a bad apple in the group. 

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Personally, I have forgotten to delete a few coins after selling.  It's hard to remember when it was some bullion-esque coin in a non-core set.  Now, as for fraud, there isn't really much monetary motive.  But I'm pretty sure there have been some high profile set or other that was crossed over to PCGS.  So the same coins had both a PCGS cert and an NGC cert.  Won on both sides of the street IIRC.  That is pretty cheesy.  

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