The rare coin market in early 2022 continues to soar following a record-breaking marketplace in 2021. However, veteran dealers in the Professional Numismatists Guild urge collectors and investors to be cautious about the continuing proliferation of fraudulent, online advertisements selling counterfeit coins and fake gold, silver, and platinum bullion items or grossly overpriced genuine gold and silver coins.
Last year, a record 22 U.S. coins sold at auction for $1 million or more and hundreds of other historic coins and banknotes priced from $1,000 and up set new records when more than $551 million of U.S. rare coins were sold at major public auctions, said PNG President Richard Weaver. The market boom continues as during the first month of 2022, there were reports of nearly $70 million of U.S. coins already sold at major auctions in January.
Weaver cautions consumers and investors that social media platforms have become the predominant choice of counterfeit coins and bullion market fraudsters.
In addition to outright fakes, some unscrupulous sellers offer illegal replicas of historic coins that are not marked COPY as required by federal law. The Anti-Counterfeiting Educational Foundation estimates the cost to unsuspecting victims is in the millions of dollars in lost investments, he stated.
According to the Foundations Director of Anti-Counterfeiting, former Texas Police Chief Doug Davis, in one recent case, an unwary buyer unsuspectingly purchased $27,000 of counterfeit one-ounce silver coins from a pop-up ad that appeared on Facebook.
There are red flags
to help identify suspected bad actors.
First, beware of offers too good to be true, such as prices well under the actual market value for genuine items. For example, one advertiser offered Morgan silver dollars (struck between 1878 and 1921) for only $8 per coin, but genuine examples of these types of popular U.S. silver dollars each contain about $17 worth of silver, and most have a higher numismatic/collector value.
The Commodities Futures Trading Commission and more than two dozen individual states recently filed a lawsuit against a California company alleging the firm fraudulently solicited approximately $68 million from more than 450 members of the public to purchase precious metals and that customers significantly overpaid for silver coins, according to the complaint filed in federal court. The defendants named in the lawsuit are not members of the Professional Numismatists Guild.
Remember, if you dont know rare coins or precious metals, youd better know your dealer, Weaver emphasized.
Members of the Professional Numismatists Guild and their Accredited Precious Metals Dealers program must adhere to a strict code of ethics in the buying and selling of numismatic and bullion merchandise.