Integrated Global Business Solutions (IGBS)

Business Alert from April

Be alert for fraud if you invest in coins

Buying rare and precious coins can be an exciting hobby and, for some, a lucrative investment. Unfortunately, it's also a business that's rife with potential for con artists. As always, it's wise to proceed with caution. Following a few simple guidelines can offer protection from unethical sellers.

Research, research, research. Know what you're buying. Carefully study the characteristics of the coins you're considering, paying specific attention to rarity, grading, market availability and price trends. Comparison shop for similar coins by checking prices in leading coin publications. If a dealer's advertised price is much lower than listed prices, the dealer may be misrepresenting a coin's grade or quality. Online discussion groups dedicated to coin collecting are also a great place to post questions about a particular coin.

Know the seller. Before you buy, check out the dealer's reputation. How long has the firm been in business? Is the dealer a member of a professional organization? Has the Better Business Bureau received any complaints about this company? What guarantees does the seller provide?

Get a second opinion. For expensive purchases, take your coins to an independent appraiser upon receipt. Although grading coins is not an exact science, you should return the coins if the second opinion results in a value significantly lower than the dealer's representations.

Be careful with online auctions. For many years the market for rare and precious coins has been a fertile field for fraudsters, and online selling has taken the game to a new level. Dealers who use online auctions such as eBay have been caught using a variety of scams: doctoring images, posting bogus descriptions, selling counterfeits, sending coins that differ from those advertised (the old "bait and switch" routine), and failing to deliver purchased items. Again, if you're planning to buy at an online auction, find out as much as possible about the seller. Check feedback ratings. Read both positive and negative comments. Make sure the seller has sold similar coins in the past with good results. Ask the seller for clarification if something appears suspicious. And if you win the bidding, beware of sending payments to a location that differs from the one listed in the auction.

Whether buying coins online or off, the old maxim, "let the buyer beware" is always sound advice.

The information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or business consulting.

If you have any questions or comments contact an IGBS senior business consultant at 703.934.6170