Coins now made in China too

By Mario Cywinski

For many years, the running joke was that everything was being 'made in China.' This did not yet include the field of numismatics. While counterfeit and fake coins have been seen in the hobby since at least the 1960s, they were usually from homegrown criminals.

An example of this happened in 2006, as the Royal Canadian Mounted Police (RCMP) broke up a counterfeit operation in Montreal, where $1 and $2 coins were being produced. All the equipment which was needed to make the coins was also found. How many and which type of the $1 and $2 coins actually made it into public hands, was unknown.

Now with the world getting smaller and smaller, with the popularity of the Internet and the ease of international shipping, more people can buy coins themselves, without having to go through a dealer.

A recent look at EBay's web site showed many postings warning other visitors, to avoid coins from China that are too good to be true.

"China is a country with a great heritage, but today it is the biggest source of all things fake in the world, including coins and many other objects," said coin collector and numismatic writer, Reid Goldsborough. "According to the International Intellectual Property Alliance, China is the worst country in the world in terms of counterfeiting."

The International Intellectual Property Alliance (IIPA) says China's estimated total trade loses in 2007 were $2,975 million, up almost $540 million from the previous year.

What this means for numismatics is the fact that the reputation of the hobby could be affected.

"These coins are a problem to the reputation of the coin hobby, since those people who are duped with such fakes can be very vocal and capture the ear of the general press," said David Lange, research director for numismatic grading company, NGC.

Also, in the near future we can expect to see a lot more fake Chinese fakes, as demand grows.

"Fakes will continue to be produced as long as there are bargain hunters buying them," said Lange.

Many dealers have not seen an influx of these coins as of yet, however, this could be a result of taking various precautions.

As well, being knowledgeable about all things numismatic is a huge help.

Interestingly, if you have ever seen a Chinese bootleg DVD, you know the quality of many of these fakes is very poor. Transfer this to coins, and for many, spotting a fake, at least in theory, is relatively easy.

"The latest rash of counterfeits are very amateurish and will not fool anyone apart from a beginner or a person from the non-numismatic general public," said Lange. "They seem to be targeted specifically towards a market of tourists and casual buyers."

Many collectors (much like automobile buyers) believe if you buy from a dealer, you must pay a premium. However, in a lot of ways you are eliminating the risk, by doing so. If you buy an automobile from a private seller, you risk the seller not telling you the whole truth about the shape of the vehicle.

With coins, you risk the seller not telling you the coin may be counterfeit.

"The safest course is to buy coins that have already been authenticated by a reputable certification/grading service," said Lange.

"The alternative is to buy coins from a reputable dealer who has a written guarantee that he will refund any purchases that are determined to be fake or altered.

"[Some] established coin dealers will make any sale of an uncertified rare coin contingent upon having it pass an examination."

Avoiding buying coins online (apart from reputable online dealers) is another way to avoid being tricked into buying fake coins.

"The most common way people get tricked into buying fakes today, with any collectible is buying online from sellers they do not know," said Goldsborough.

It is also important to make sure to do research on any coin you wish to purchase. Do not go into a sale blindly, as with many things, that is a recipe for disaster.

Goldsborough recommends reading as much material as you can find, while talking to different numismatists about a coin you wish to buy.

Another important tip is to avoid buying coins which you do not see first. If you decide to buy coins online, make sure you know what you are buying.

March 18 to March 31, 2008 issue of Canadian Coin News