Counterfeits - The Battle Begins

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 ANA and 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, Kentucky, and Sarasota, Florida, 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 this 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 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 are 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 strategy should apply to those who sell counterfeit coins.

The second part of any strategy dealing with this issue is education. The ANA, 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 Money.org website. Other organizations have similar plans to educate its 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 victims of counterfeits occur 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.

Questions about the rare coin market? Send them to wmr@ngccoin.com.

Jeff Garrett bio