Check both sides of the coin...

[bobh]

FROM:

http://www.financialpost.com/careers/story.html?id=1620968

 

Check both sides of the coin

 

Richard Morrison, Independent Investor, Financial Post

Published: Friday, May 22, 2009

 

Among all the collectible items you might want to diversify

your investment portfolio with, rare coins offer the most

potential for profit, as there are more wealthy coin

collectors than there are say, collectors of stamps,

baseball cards, comic books or just about anything else.

 

(Story Image Photo)

http://a123.g.akamai.net/f/123/12465/1d/ww...in?size=404x272

Edmonton collector Neal Shymko paid $4,000 for

rare coins that turned out to be counterfeit.

The 1890 piece in the centre of the three coins

would have a book value of $4,500 if it was real.

 

Sadly, counterfeiters have figured this out too. A simple

search on eBay and a few online auction sites show that it's

common for rare coins to attract bids of $1,000 or

more - and that means huge profits for those who can pass

off counterfeits bought for a few dollars as the real thing.

 

Neal Shymko, a coin collector in Edmonton, logged on to eBay

in February and spotted a package of 15 Canadian 50¢ pieces

being offered by a Quebec-based seller. Twelve of the 15

coins were of so little value their combined worth would be

about $50, Mr. Shymko says, but three coins, from 1888, 1890

and 1894, were noteworthy, and he won the package with a

$4,000 bid, then paid with a money order.

 

The coins arrived soon enough. After a quick glance showed

they were indeed old 50¢ coins, Mr. Shymko logged on to eBay

and gave the seller positive feedback - a favourable review

of the transaction, a move he later regretted, since eBay

does not allow changes.

 

Mr. Shymko says he grew suspicious about the three high-end

coins when he took them out and noticed they felt unusually

light. Such coins should weigh 12 grams, but when he put

them on his postal scale, each of the three weighed only

8.5 grams.

 

"Just to make sure my scale wasn't out I checked other coins

I have from the same time period and they all weighed in at

the 12-gram mark," Mr. Shymko says.

 

Before putting them in a safety deposit box with the rest of

his collection, he examined the three coins and discovered

they'd been struck improperly, with the same obverse, or

front, for all three, and a historically incorrect obverse

for the 1894 coin. As a final clue, Mr. Shymko noticed the

seller had reused a box with a label from China, where

producing replicas of rare coins is a huge industry.

 

Mr. Shymko contacted the seller, who first claimed an

inability to understand English, then fell silent when

Mr. Shymko used an online translator to correspond

in French.

 

"All correspondence from them has now ceased," Mr.

Shymko says.

 

Mr. Shymko complained to eBay, which sent him a few

form-letter replies and said its staff was investigating

but could not offer further details because of

privacy issues.

 

"Ebay has been totally useless in this matter," he says.

 

Andrea Stairs, an eBay Canada spokesperson, described the

incident as "not typical to eBay," noting that according

to the information she has, the seller, who spoke no

English, used a translation program and listed the item in

good faith.

 

The incident "was the result of a couple of really unusual

events," says Ms. Stairs. "We have a zero tolerance for

counterfeits and we're doing our best to make sure that

those things don't hit the marketplace," she says, adding

that eBay works with the RCMP, the provincial police

forces and members of the numismatic community to develop

guidelines and policies that help protect buyers from

purchasing illegal merchandise.

 

Ms. Stairs says if Mr. Shymko had paid with PayPal, he

would have been protected up to the full amount of the

purchase price - something Mr. Shymko says he's heard

several times since then, but which doesn't make him

feel any better.

 

A recent search on eBay found 352 replicas of rare

Canadian coins for sale, all but four from sellers in

China. Another 9,950 replica U.S. coins were listed; of

these, 9,134 were from China.

 

There is nothing illegal

about buying or selling a replica, as long as the coin

is stamped as such. A collector who wants the 1936 "dot"

Canadian 1¢, for example, might want a replica since

only three genuine ones exist, going for prices of

$200,000 and up. A replica of the coin on eBay, however,

is just $4.65, with free shipping. A replica of the

extremely rare 1921 Canadian 50¢ piece, which goes for

$35,000 to $85,000, depending on its condition, was on

offer for US$4.

 

On eBay, the photographs of the coin copies show the

word "replica" stamped into the coin. But if it arrives

without a stamp, the buyer has a counterfeit coin.

 

To avoid being victimized by a counterfeit coin, it's

best to stick to coins that have been independently

examined, graded and encapsulated in tamper-proof

holders. In Canada, that means only buying coins

graded by International Coin Certification Service

(ICCS) of Toronto or Canadian Coin Certification

Service (CCCS) based in Saint-Basile-Le-Grand,

Que. (canadiancoincertification.com).

 

Louis Chevrier, CCCS president and chief grader, has

been a coin collector for 35 years, a dealer for 16

years and a coin auctioneer for the past five years.

He says he can usually spot a fake coin right away.

 

"It raises a red flag with me. I get a gut feeling

there is something wrong," he says, adding that some

Chinese replicas are often crudely made but novice

collectors could still be fooled.

 

Mike Marshall, a coin collector in Trenton, Ont.,

says he has tried without success to make police

enforce Section 406 of the Criminal Code, which deals

with counterfeit coins, and to persuade politicians

to contact eBay and urge them to disallow the sale

of "replica" coins.

 

"One phone call from an agency of power in Canada

to eBay would end the influx," Mr. Marshall says.

[squirrel]

excellent article, Bob, thank you for posting.

[one-kuna]

FROM:

http://www.financialpost.com/careers/story.html?id=1620968

 

I wish this atricle could read anyone starting on e-bay or before placing a bid like e-bay terms