Education:  
How to protect against counterfeits
Last Updated: 09/18/2013
In this age of on-line access to everything from distant sellers, counterfeiting of rare coins has become a major problem for inexperienced collectors.  Rare and high grade coins being offered through on-line auctions at significantly reduced prices can seem too good to pass up, and bargains from markets or other non-professional dealers can look like the best place to get great deals.  In almost all cases, if the deal looks too good to be true, the item is counterfeit.  There are many counterfeits of both ancient and modern coins being offered to collectors today.  Some are low quality and obvious, but some are high enough quality to fool an experienced collector.  While this seems like a scary situation, protecting yourself from counterfeits is really very easy.

The first way to protect yourself from counterfeits is to purchase only from a reputable dealer.  In Canada, reputable dealers are almost always members of the Canadian Association of Numismatic Dealers (CAND).  CAND dealers are required to follow a specific code of conduct, and a contingency fund is in place to compensate any loss that is not otherwise looked after by the dealer.  Consider how long a dealer has been in business and whether or not they have a “brick and mortar” retail location.  While some dealers working from a basement may be honest and knowledgeable, collectors are always safest when buying from a well-established professional dealer.

The second way to protect yourself from counterfeits is to use a certification service.  In the United States, the two most widely recognized and most reputable services are PCGS and NGC.  Both of these companies encapsulate coins in tamper-proof holders and provide both a grade and a guarantee that the items are genuine.  This guarantee is backed by a promise to compensate the owner of any PCGS or NGC coin if it is later found not to be genuine.  Both American companies certify Canadian and other world coins, although PCGS is more widely accepted in the Canadian market.  In Canada, ICCS (International Coin Certification Service) is a highly reputable company providing professional grading and authentication services, although they do not use the same quality packaging or provide the same compensation promise as their American counterparts.  Counterfeiters have recently also started to counterfeit PCGS and NGC certification holders, so it is now important to check the holders as carefully as the coins if buying from anyone other than a professional dealer.

Learning how to tell if a coin is genuine is useful knowledge for every collector.  While your experience may not guarantee that a coin is genuine, you should be able to identify most counterfeits very easily.  The first and most obvious way to tell if a coin is genuine is to see if it just “looks wrong”.  Often on counterfeit coins, the level of “wear” is inconsistent and improper for the grade.  If a coin has some components that look like a new uncirculated coin, especially the field, while other parts of the coin show what looks like significant wear, it is probably not genuine.

Weighing a coin can tell a great deal.  Coin reference books will list the original weight of the coin.  Using a scale that displays to .1 gram, coins can be weighed and compared with the known weight of genuine coins.  If the weight of a high grade coin is above by any amount, or below by more than a few per cent, the coin is not genuine.  For well circulated coins, the weight may be as much as 10% below the original weight, but should never be over.  Many counterfeit “silver” coins are not made of silver, and their light weight easily shows them for what they are.

Many counterfeit coins have been cast in a mold as opposed to struck.  Using a loupe with magnification of at least 7x, the surface of a cast coin will look different from the surface of genuine struck coins.  If the surface of the coin shows tiny bumps and indents, it is a cast counterfeit.  It is often possible to find the “sprue” where the molten metal was poured into the mold, or a distinct line around the edge of the coin where the two halves of the mold met and some metal flowed out into the gap.

Some counterfeit coins have been stuck using good quality dies, very similar to the way real coins are produced, but counterfeiters rarely pay close attention to every detail.  The most common place that differs from real coins is the reeding – the grooves on the outside of the coin.  Using a loupe, the shape of the grooves can be compared on a suspicious coin with the grooves on the side of another genuine coin.  If the reeding is irregular or the wrong shape, the coin is counterfeit.

While there are many advanced ways a knowledgeable dealer or a grading company can use to authenticate coins or identify counterfeits, the existence of counterfeits should not affect most collectors.  By purchasing from a reputable dealer, the dealer assumes the responsibility to check and verify that every item is genuine.  For rare coins with values of several hundred dollars of more, authentication from a third party grading company can provide the best possible assurance that an item is real.

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