At the annual meeting of the numismatic world this week attendees have had the opportunity to examine some examples of counterfeit coins from China that are reportedly flooding into the U.S. market. Five key organizations in the field have cooperatively issued a warning to collectors about these fakes.
These coins reportedly appear frequently on online auction sites and at flea markets, pitched primarily to buyers who are not familiar with coin collecting and fraud detection.
One magazine estimates that more than 1 million have been sold in the U.S. already. While the Hobby Protection Act allows manufacturers to create copies of coins, it requires that the word COPY or REPLICA be clearly marked on them. The coins in question carry no such mark.
How common are replica coins? On eBay this morning, there were more than 2,000 coins such as the rare Morgan sliver dollar coin for sale marked as copies or replicas.
The words "copy" or "replica" on most were obviously stamped on after initial manufacture, causing me to wonder just how many could be out there without such a stamp. Coin World estimates that 99% of replica coins sold in this country carry no such stamp.
How can you be sure that the collectible coin you purchase is legit? The five organizations (the American Numismatic Association (ANA), the Industry Council for Tangible Assets (ICTA), Numismatic Guaranty Corporation (NGC), Professional Coin Grading Service (PCGS) and the Professional Numismatists Guild (PNG)) suggest buying from a reputable dealer (i.e., one that has been in business for some time, has a favorable stand with the Better Business Bureau, and stands behind its sale.) Collectors can call upon the services of a couple of recognized vetting companies to authenticate coins already in their possession.
According to these groups, the quality of these fakes has steadily improved. As a layman, I wouldn't know what to look for. Would you?
Like any collectible, investing in coins requires a great deal of market savvy and a dependable expert to back you up. Given the spread of fraudulent coins hitting the market, I wouldn't spend even a penny on a penny until I'd done my homework and found a merchant I could trust.
Note: photo of fake coin added 10/15