How to Protect Your Assets
Tips On Preventing Fraud Loss
- If you are solicited without action from you, beware. Many people are being contacted by telemarketers
and direct marketers. Your first question should be "How did you get my name?" Most telemarketers buy lists.
If you have purchased any coins or other investments, you should make sure that your name cannot be sold
as a part of a mailing list.
- Ask how long the firm has been in business. Beware of a response like "Our firm has combined experience
totaling 30 years." It simply means that they may have 30 representatives, all with 1 year experience in the
market or two principals each with 15 years experience. Ask what year the firm was established, in which state
are they incorporated, and for the information on the firm and key principals to be mailed to you
before you discuss anything further.
- When dealing with a telemarketer, you should always check with the Consumer Protection agency in the
state of the soliciting firm to establish if there are any complaints. The Better Business Bureau and Dun
and Bradstreet report data to the public that only the firm itself has provided. It is better to find a
firm with a history or "track record" than a firm that shows no history at all.
- You will be offered an opportunity to buy something, usually on a "risk free" basis, and you will be required
to provide a credit card number as a security for the item which they will send "on approval". DO NOT GIVE A CREDIT CARD NUMBER
TO A TELEMARKETER THAT YOU DO NOT KNOW OR WITH WHOM YOU'VE NEVER TRANSACTED ANY BUSINESS. You may find
unauthorized charges on your card that will be very time consuming to remove.
- In coin purchases, there are several general rules to follow:
- Buy only U.S. coins, dated prior to 1934.
- Buy only coins certified by PCGS or NGC.
- All PCGS and NCG coins should be priced according to the weekly Certified Coin Dealer Newsletter.
Know the formula used by the dealer to arrive at the price.
- Buy coins that are graded at least MS63 or PR63. Do not buy coins graded MS68 or higher because
the prices for these special coins are not listed and are extremely esoteric.
- "Buyback" guarantees are only as good as the company offering them. The longer a firm has been in business, the better
the odds that the firm will honor their commitment. "Buyback" should refer only to repurchase at the
prevailing market prices.
- DO NOT buy coins based on performance guarantees. That is," these coins will go up in value
250% in a year...buy now!!". In such case, why would anyone sell them to you?
- Beware of firms offering "free auction service". It does not exist. The selling firm may not charge
you, but the auction firm will. This cost is passed on to you and the selling firm can still claim it did
not charge you for auction service, the auction firm did!
- Some firms offer retail consignment as a method of liquidation for coins. This is commonly used in
"Ponzi" schemes where the promoter internalizes the sale at prices higher than the actual market. To have
consignment a viable option, the seller should be advised of the time limit required for sale, the amount
of the sale, the percentage that will be retained as a fee and comparative prices for wholesale and auction
estimates.
- If a firm promotes the performance of coins using the Salomon Brothers investment survey, ignore them.
The survey was last produced with coins in 1989 and was found not to be representative of the market since
it tracked only 20 unique coins.
- Beware of PCGS or NCG certified coins in low grades (MS62 or PR62 or lower) with low
populations and very high prices. These coins are best left to specialists who can identify which
of these coins have value and which do not.
- Finally, DO NOT become involved in multi-level marketing (MLMs) schemes in rare coins. They do
not work and will cost you money.
These are just the basics to prevent becoming victimized in a fraud. Rare coins have long been an important part of
diversified holdings. This historical asset can also be a viable part of your portfolio. The rare coin market has
excellent legitimate opportunities. Look for them and proceed as with any other purchase, with knowledge and care.
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