Counter Counterfeits with CoinFacts

For the sixth time in two years, this weekend Proxiblog purchased another counterfeit coin. And for the sixth time, a Proxibid auctioneer graciously allowed return of the coin for a full refund because fakes are the responsibility of consignors. Which leads to today’s big questions: How many fakes are being sold on the Internet each month and, if you’re a bidder, how many are in your own collection?

One of the biggest so-called “sleepers”–rare coins often overlooked–is the 1862-S quarter eagle, which rarely comes on the market. And when it does, bidders and auctioneers seldom realize that fewer than 100 actually are thought to exist. We spotted one in a Proxibid auction, and the coin had all the earmarks of being genuine, including the correct weight at 4.18 grams. This meant it could be a genuine 1862 Philadelphia quarter eagle with an added “S” mint mark in the wrong place on the reverse. Or an entirely fake replica in gold.

Michael Fahey, senior grader at ANACS and also a Coin World columnist who often writes about fake coins, has seen this kind of counterfeit before with the “S” in the wrong place.

This is the type of coin that can fool an auctioneer because weight and dimensions are correct. However, mint marks on quarter eagles can occur in various places on the reverse. It’s something we neglected to check. But when the coin arrived, that “sixth-sense” feeling of something being wrong–which numismatists cannot explain–arose.

We went immediately to CoinFacts, pulled up a picture of an authentic 1862-S quarter eagle, and studied the devices … only to see with a sinking feeling that the mint mark was misplaced and too small for the year.

Without PCGS CoinFacts, the coin would have been submitted for authentication, adding unneeded expense and making it difficult for the Proxibid auctioneer to refund the purchase. (This particular house, one of our top-rated companies, did so with no questions asked.)

If you’re an auctioneer or a bidder–or a quality control officer at Proxibid, for that matter–we strongly encourage you to subscribe to CoinFacts. We highly recommend the numismatists responsible for the data and auction prices of this indispensable online aid, which not only provides all the details of every year of US coinage but also features expandable pictures, current auction prices and so much more.

Visit the site and decide for yourself if it is worth the monthly fee. We never bid without it.

However, the true worth of this database is in detecting counterfeits that have lain dormant in bank boxes for generations as well as the tens of thousands of fakes flooding the auction market from China, as this post documented last month.

We commend the Proxibid house for upholding its consignment policies, placing liability squarely on the seller rather than the Proxibid buyer, and recommend that you adopt a similar policy.

Proxiblog is an independent entity with no connection to the auction portal Proxibid. Our intent is to uphold basic numismatic standards as established by the American Numismatic Association and the National Auctioneer Association and to ensure a pleasurable bidding experience not only on Proxibid but also on similar portals such as iCollector and AuctionZip.

Coin World Also Sounds Fake Alarm

Proxiblog warned online auctioneers about being on the alert for an onslaught of counterfeit coins in light of eBay’s new policy banning copies and replicas of coins from their worldwide site. Here is an example of a counterfeit $3 gold piece purchased on the Proxibid portal. Now the leading numismatic magazine also has sounded an alarm.

Writing in the free online edition, expert numismatist and appraiser Steve Roach warns that counterfeit coins and coin doctoring–altering coins via artificial color, whizzing or other methods–“have the potential to harm the coin market in the long term if not properly addressed.”

Roach believes the eBay decision will impact the steady stream of counterfeit coins into the United States because those fakes have to go somewhere. Proxiblog believes online portals like Proxibid may be likely targets. If you’re an auctioneer, that means you.

“Now that eBay has placed restrictions on the sale of replicas, a major supply point into the United States has been cut off,” Roach writes.

You can read his report by clicking here.

Proxiblog has recommended methods to detect counterfeits in this post about eBay’s new policy.

We also recommend a contract such as offered by Leonard Auction to consignors, part of which states:

  • REPRESENTATION OF GENUINENESS. Consignor represents and warrants each item to be genuine. Consignor agrees that any item found to be non-genuine withint 30 days of the auction date, will be returned to the Consignor, and upon return, Consignor will pay Leonard Auction, Inc., the net proceeds of the returned item.

If you are an auctioneer on the Proxibid portal, it is more than necessary now for you to put the onus on consignors–especially ones with whom you do not do regular business–perhaps with a contract such as John Leonard has devised. Keep in mind that Proxibid has no authority over consignors, but does have partnerships with auctioneers. Proxibid also understands that bidders should not be held responsible for counterfeits that have been depicted as genuine.

It is our experience that Proxibid helps resolves issues of counterfeit coins, as we have had five such purchases. The portal has been especially proactive for more than a year now.

As the portal grows in technological acumen, quality control and popularity, you will want to showcase your professionalism by ensuring that your consignors understand that they ultimately are responsible for wares being sold on their behalf. Be especially wary of consignors you do not know and make sure you check out any suspicious lots with a local coin club or dealer.

By the way, we state all this being a major Proxibid consignor. If ever any of our coins are deemed counterfeit, or even doctored, we take back those items at our cost. We know other consignors are just as conscientious. But some aren’t, and given the new eBay policy, you need to protect your interests.

You do not need any more risk.

Proxiblog is an independent entity with no connection to the auction portal Proxibid. Our intent is to uphold basic numismatic standards as established by the American Numismatic Association and the National Auctioneer Association and to ensure a pleasurable bidding experience not only on Proxibid but also on similar portals such as iCollector and AuctionZip.

Proxibid Changes Improve Portal

We applaud Proxibid’s new changes in helping make the portal more bidder friendly and transparent, identifying those auctions that can see maximum bids or that allow sellers–or even auction companies–to bid on lots in a type of shill bidding. Click the picture above to read new service terms.

Proxiblog has advocated for these changes for more than a year. As many of our Honor Roll houses know, we bid often and then consign winnings to help fund our scholarships, counting on our numismatic knowledge to spot bargains. In the process, we have identified houses that shill bid, always jump to maximum bids, and then shill bid again in the hope that we’ll up our bids even further.

We have not identified them on Proxiblog because we want our site to be proactive rather than reactive, relying on our articles to make the case for better online business.

Shill bidding is, in fact, illegal in many states and one of the reasons why coin buyers often shy away from Proxibid auctions and look instead to Great Collections, Heritage and Teletrade, which thrive because of transparency and stringent rules. Yes, you might pay more for a coin on these sites. Yes, there are fewer bargains. But there is much less risk. That is why those companies vastly outsell auction houses on Proxibid.

Nevertheless, one or two Proxibid auctioneers bristle every time we mention Great Collections et. al., complaining that there are no bargains on those auctions. These Proxibid auctioneers are honest and mistakenly believe other houses are as honorable as theirs. Most may be, but some are not. And in general, bidding on Proxibid requires users to possess numismatic experience not only in bidding but also in grading and identifying counterfeits, self-slabbers and high-reserve houses.

We recommend the larger houses for newbies until they learn numismatic basics.

If you want your house to compete against the likes of Heritage and Teletrade, you can do so easily by following our best practices.

It’s not a matter of size. It’s a matter of integrity, as most NAA auctioneers realize. A house like Weaver’s Signature Coin and Currency Auction, Matthew Bullock Auctioneers, and Key Date Coins reap ever higher bids because they have followed our advice in the past year and thrived. And that advice is based on 40 years’ experience in the numismatic industry in addition to reporting on coins for top publications like Coin World and Coin Update News and even advising the U.S. Mint on coin design.

This is why we believe that forthcoming Proxibid changes are going to help many of our top honest houses attract even more bidders because they will know that auctioneers will not immediately jump to maximum bids or unfairly shill bid for maximum profit. Those relatively few houses lack respect for the online audience, believing it is there to be duped or otherwise taken advantage of.

On the other hand, we feel confident placing maximum bids on almost all of the houses ranked to the right of this article.

However, we still are advocating for more changes in the Proxibid rules:

  • Charge high-reserve auctions for unsold items because they use the portal as a cheap eBay site, knowing they don’t have to pay fees when lots do not sell; so they sell above retail, trolling for the few inexperienced bidders who do not know pricing. See this article for details.
  • Mandate that consignors are responsible for paying refunds on counterfeit and altered coins. See this article featuring Leonard Auction for contracts that do just that.
  • Remove APN badges from houses that contract with third parties for packing and shipping. See this article for details about that.

We also understand that Proxibid cannot force auctioneers to extend basic numismatic courtesies, such as providing clear and expandable pictures of obverse and reverse of coins. We are disappointed in some of our former top houses taking shortcuts in this area by providing only obverse. Today, we removed them from top-ranked houses.

It is, frankly, unethical to sell half a coin to an Internet audience that takes risks because they cannot view the lot up-close as onsite bidders can. We advise all bidders to cease placing bids on raw coins that show only one side of a lot, as this article explains.

We end with a reminder about one of the most important ethical rules of the National Auctioneer Association: Members owe the buyer (from now on referred to as the Customer) the duties of honesty, integrity and fair dealing at all times.

And we thank Proxibid for helping everyone do just that.

Proxiblog is an independent entity with no connection to the auction portal Proxibid. Our intent is to uphold basic numismatic standards as established by the American Numismatic Association and the National Auctioneer Association and to ensure a pleasurable bidding experience not only on Proxibid but also on similar portals such as iCollector and AuctionZip.

Auctioneer Advisory: Fakes are on their way!

Coin World is reporting that eBay no longer will allow on its site replica US and world coins of any kind, with violators risking their selling privileges being suspended for any infraction. Pictured here is a counterfeit coin purchased on the Proxibid portal. We secured an immediate refund when explaining the illegality of selling counterfeits.

The new eBay policy even bans coins marked as “copy” in keeping with the Hobby Protection Act.

We applaud eBay for this policy.

The world’s largest online auction portal made the move to showcase the company’s commitment to improve the buying, selling and collecting experience on eBay, Coin World reported in an exclusive story.

Get ready, Proxibid coin auctioneers. Be prepared, Proxibid. You’ll be targeted next as you are becoming the portal of choice for the selling of coins and currency.

The world counterfeit and replica market for coins is responsible for tens of thousands of fake coins flooding into the United States, mainly from China.

In the past three years, even Proxiblog with its keen understanding of numismatics has purchased five counterfeit coins on Proxibid. You can read about our experiences here as well as the policies of some of our top auction houses, including Weaver Signature Coin and Currency Auction, Key Date Coins and Crawford Family Auction.

What concerns us about the anticipated flood of fakes into the Proxibid auction stream is how some auctioneers are unaware that they cannot sell counterfeit coins no matter what–repeat, NO MATTER WHAT–your terms of service state. It’s a violation of federal law, and you can be investigated by the Secret Service or worse, sued.

When we have explained this after purchasing fake coins on Proxibid, all auctioneers refunded our purchases. In one or two cases, it took some convincing.

We have repeatedly advised you to make consignors rather than bidders responsible for fake, doctored or otherwise altered coins.

We’re also hoping that Proxibid’s resolution center understands and prepares for the coming influx of fakes on our portal. We recommend an internal policy for auctioneers on Proxibid concerning bidder refunds for counterfeit coins when adequate proof is provided. As the influx of fakes becomes more apparent in the months ahead, given the new eBay policy, stricter selling rules must be enforced or bidders will look elsewhere–probably eBay–for alternatives.

As for auctioneers, here are some tips:

  1. Purchase a strong magnet. Fakes often are made of base metal and will stick to the magnet. Silver is non-magnetic and also has a special ring to it unlike the clang of cooper-nickel coins. Test for that sound with a Franklin half dollar.
  2. Invest in a gold coin tester. There are several brands and methods, from stone to liquid. This is especially important if you are selling so-called “California fractional gold.”
  3. Buy coin scales and calipers to weigh suspect coins, checking their weight and diameter in coin guides. We recommend subscribing to PCGS’s CoinFacts to learn about weights and measures of coins.

To learn more about the multi-billion-dollar Chinese counterfeiting industry, read this expose by Susan Headley.

Also be on the lookout for consignments by unknown entities. Professional coin thieves also slip in fakes with a shipment of bonafide coins. Flooding auction portals with counterfeit and replica coins is only one of the latest cons being perpetuated on portals, dealers and auctioneers. We learned with great sadness yesterday that one of our top auction houses was robbed in the past week. This is the third theft of consignments we learned of this year, prompting us to recommend that auctioneers store rare coins, gold jewelry and other precious smalls in large local bank boxes for enhanced security.

As for bidders reading this post, never ever keep more than a few coins in your home. Insurance will not cover rare coins. Take out a bank box if you are pursuing this hobby or reinvesting in coins as part of your portfolio.

If ever your coins are stolen, report it immediately to local authorities as well as the Numismatic Crime Information Center.

Take every precaution in the months ahead, with a poor economy prompting more counterfeiters and criminals suddenly as interested as your bidders in precious metals and rare coins.

Please share other tips or warnings if you are an auctioneer in the comment section below.

Proxiblog is an independent entity with no connection to the auction portal Proxibid. Our intent is to uphold basic numismatic standards as established by the American Numismatic Association and the National Auctioneer Association and to ensure a pleasurable bidding experience not only on Proxibid but also on similar portals such as iCollector and AuctionZip.

Counterfeit Terms of Service

For the sixth time in two years, we purchased a counterfeit coin through an online vendor, this time through the portal Proxibid, which hosted an auction house selling what was billed as “250-350 A.D. Tetradrachm” lot.

The coin was similar to the silver one at left, only it was made of base metal. I do not have permission to show the specific coin, but suffice to say, as soon as I held it, I knew it was a counterfeit. It felt as light as an aluminum alloy, or tin, and the minting of it had seams as if hot metal was poured into a mold and then cooled.

Ancient coiners minting Tetradrachms used iron dies that often left traces of rust. There was none on this coin, which was smooth and dull gray.

To participate in the Proxibid auction, I had to agree to terms of service, which stated for this particular session: “All information is believed to be accurate, but the auction company shall not be responsible for the correct description, authenticity, genuineness of or defect in any lot, and makes no warranty in connection therewith.”

For the rest of the article, click here.


Note: Several of our Proxibid auctioneers are mentioned in this Coin Update piece, including Weaver Signature Coin and Currency, Key Date Coins, Crawford Family Auction, West Coast Auction and Silver Trades.

QUICK POST: Forthcoming Article on Counterfeits


Occasionally Proxiblog has to research an issue over several days before posting, and in this case, on counterfeit coins, we are looking at how various Proxibid auctioneers selling coins deal with the topic. Watch for an article in the coming weeks.

Proxiblog recently purchased a counterfeit coin that we could not detect was a fake based on digital photography alone. We had to weigh it and study its striking methods to discern the forgery. Once again, the auctioneer was extraordinarily professional, taking a return on the coin and assigning liability to the consignor rather than the bidder.

In this article being prepared for Coin Update News, we will look at laws governing counterfeits and how certain boilerplate terms of service do not fulfill obligations, especially if the auctioneer is a member of a numismatic association.

We also have been surprised and pleased at how several Proxibid auctioneers already know this and have fashioned terms of service to uphold numismatic shared values.

We will applaud those, and encourage others, once we have analyzed all the laws and facts.

Stay tuned.

Counterfeits, Consignors and Contracts


Counterfeits, illegal copies and doctored coins are flooding the US coin market. Most come from China. Some estimates put the number of such coins at 10,000 per month. Proxibid works to resolve such issues when a buyer learns a purchased coin is a fake. But there are steps you can take to protect your business and retain your customers, including the creation of a consignor contract that specifies sellers are responsible for counterfeit coins.

We strongly recommend that all auctioneers create a consignment agreement that specifically states that sellers are responsible for all counterfeit coins returned for reimbursement.

Several auction houses already have such contracts. Here is such a clause from Leonard Auctions:

REPRESENTATION OF GENUINENESS. Consignor represents and warrants each item to be genuine. Consignor agrees that any item found to be non-genuine withint 30 days of the auction date, will be returned to the Consignor, and upon return, Consignor will pay Leonard Auction, Inc., the net proceeds of the returned item.

We applaud this, but also point out that sometimes it takes 2-3 months to prove that a coin is counterfeit. For instance, we just purchased one that was so skillfully done that we had to send it to NGC for authentication because we would not have been able to prove it was a contemporary copy of an 1869 coin. That cost us $70 in NGC fees, but it was worth the money.

In the past year we returned seven counterfeit coins to a half dozen auctioneers. All provided reimbursement even though we had agreed to the standard auctioneer contract:

All property is sold “AS IS,” and ALL SALES ARE FINAL. It is the Bidder’s responsibility to determine condition, age, genuineness, value or any other determinative factor. Any grades given are the consigners opinion and are not guaranteed. The Auctioneer will not be responsible for any errors or omissions in the description of the merchandise unless it is a material and intentional misrepresentation of the item itself. Bidders agree that they may not return any item they purchase.

That iron-clad contract may no longer hold ethically or legally in the wake of these chilling facts:

  1. China is exporting to America tens of thousands of counterfeit U.S. coins each month.
  2. Other counterfeit coins stored for decades in bank boxes are consigned regularly in estate auctions.
  3. Unscrupulous sellers consign altered or fake coins, targeting online auction companies with poor photography so as to hide defects.
  4. Unprincipled sellers put their inferior coins in holders with intentionally misleading labels, counting on auctioneers to quote retail prices as listed in numismatic books and guides.

Auctioneers who sell coins should read appropriate sections of title 18, chapter 25 of the federal code, “Counterfeiting and Forgery.”

Section 486 of that chapter states: “Whoever, except as authorized by law, makes or utters or passes, or attempts to utter or pass, any coins of gold or silver or other metal, or alloys of metals, intended for use as current money, whether in the resemblance of coins of the United States or of foreign countries, or of original design, shall be fined under this title or imprisoned not more than five years, or both.”

Section 473 of that chapter states: “Whoever buys, sells, exchanges, transfers, receives, or delivers any false, forged, counterfeited, or altered obligation or other security of the United States, with the intent that the same be passed, published, or used as true and genuine, shall be fined under this title or imprisoned not more than 20 years, or both.”

There are other laws, too, such as the U.S. Hobby Act of the Federal Trade Commission, which reads, in part:

    Imitation numismatic item means an item which purports to be, but in fact is not, an original numismatic item or which is a reproduction, copy, or counterfeit of an original numismatic item. Such term includes an original numismatic item which has been altered or modified in such a manner that it could reasonably purport to be an original numismatic item other than the one which was altered or modified.

A doctored coin falls under this category. According to the Professional Numismatists Guild, doctoring is defined in part as “the action of a person or the enabling of another to alter a coin’s surface or appearance, usually to diminish or conceal defects, and thereby represent the condition or value of a coin as being superior to its actual condition or value.”

Those unfamiliar with coins will have a difficult time discerning doctored coins. If you’re selling coins, however, and know little about them, it is in your interest to hire a consultant who can look over a consignment.

A local coin shop owner or coin club member usually only charges about $100 to do the task.

Auctioneers who belong to the NAA also should remember the association’s code of ethics when dealing with doctored, deceptively labeled and counterfeit coins. According to the Preamble, members are required to go beyond laws and professional regulations, conducting business “in a manner that serves the public interest, protects the public trust and furthers the goals of their profession.”

One such vehicle to accomplish that is requiring consignors to sign a form that states they will reimburse the auctioneer when coins are returned with evidence of doctoring, deceptive labeling or counterfeiting. Contact your company’s attorney to ensure appropriate wording.

Proxiblog is an independent entity with no connection to the auction portal Proxibid. Our intent is to uphold basic numismatic standards as established by the American Numismatic Association and the National Auctioneer Association and to ensure a pleasurable bidding experience not only on Proxibid but also on similar portals such as iCollector and AuctionZip.

Coin Doctors Target Online Auctions

Proxiblog is dedicated to helping auctioneers navigate the pitfalls of numismatics, especially concerning “doctored coins” being consigned increasingly in online sessions.

Click on the picture to expand, and you will see a deviously altered coin that was “whizzed” with a Dremel-like brush and heated so that hairlines could be hidden. The coin sold for $120, but was worth only face value because it was, well, defaced.

Before we discuss “numismatic malpractice,” please keep in mind that Proxiblog does not expect auctioneers to be coin experts. Some are, of course. But there is too much to know about numismatics, even for so-called experts, and many houses only handle coins infrequently.

Unfortunately, coin doctors are counting on that lack of knowledge when consigning altered lots that actually violate federal code (18 U.S.C. § 331). Some lots were altered years ago, and unlucky estates merely acquired them. Intentional or not, such coins cause problems for auctioneers.

We’ve heard from several auctioneers that some customers demand reimbursement when they attempt to certify their coins with NGC, PCGS, ANACS or other third-party grading company, only to learn that coin surfaces have been altered. Some clients have issued charge-backs from their credit card companies. Other customers simply stop patronizing a particular auction.

If you have had this experience, you know how unpleasant auctioneer-customer exchanges can be in seeking resolution. We applaud Proxibid for acting as intermediary when this occurs.

It pains us, though, to see altered lots in Proxibid auctions. Recently in one such auction we identified several altered coins. You can view pictures and read about that in depth by clicking here.

There are some steps you can take to protect yourself from consignors who may be banking, literally, on lack of numismatic knowledge:

  1. Ask a member of a local coin club to examine consignments and even write lot descriptions for you. Most will charge a nominal fee, usually less than $100.
  2. Create a consignment form that gives auctioneers the right to charge sellers for altered and/or counterfeit coins. True, you can claim the Proxibid registration contact protects you sufficiently; but when problems arise, as they always do, such a stance can harm your reputation as an ethical, customer-friendly house.
  3. Continue to educate yourself about altered and counterfeit coins, especially if you plan on doing more business in this lucrative area.
  4. Consult a numismatic directory, such as CoinFacts, for information about the weight and dimensions of each type and denomination. This comes in handy if you suspect you have doctored or fake coins.

Concerning that last recommendation, Proxiblog unwittingly purchased two counterfeit coins from one of our Honor Roll houses. The coins’ weight was wrong. Rather than precious metal, the items were made of gold-plated bronze. When informed about the fakes, the auctioneer asked that they be returned, promising to credit our account.

We appreciate that. We also appreciate your situation and will continue to alert you about numismatic malpractice. We won’t eliminate it in online auctions, but we’ll decrease the likelihood that it will happen to you. That’s our goal.

Proxiblog is an independent entity with no connection to the auction portal Proxibid. Our intent is to uphold basic numismatic standards as established by the American Numismatic Association and the National Auctioneer Association and to ensure a pleasurable bidding experience not only on Proxibid but also on similar portals such as iCollector and AuctionZip.