Featured An examination of the counterfeit slab epidemic. Scope and advice.

I am still amazed that the argument is about the wording and not the message; I wonder if we put this much effort into getting the word out if the threat would be minimized...

To this latest post I would respond I am a knowledgeable collector and own MANY counterfeit coins in genuine top 4 TPG slabs, several genuine coins in counterfeit overgraded slabs, several misattributed coins in genuine slabs and a couple of counterfeit coins in counterfeit slabs. Several came from very experienced dealers (counterfeits in genuine slabs) who only gave them a glance because they were in good holders.

The threat is there and we can continue to argue to what degree but it is growing; to me the point is how do we stem the tide and the effect on our hobby?

 

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Solving the problem should be figuring out how we, as a civilization, adapt to it, instead of wasting resources trying to stop it. Trying to stop climate change is as futile as going to the beach with a sword to fight the tide.

 

If I have one slab, there is a .125% chance that it is fake. If I have 100 then there is a 12.5% chance that one is fake. I didn't say 12.5% were fake.

 

Clarity of the basis makes this work. The basis was 1 rather than 100.

Now I do think there is a significant difference between the percentage of known fakes and the number of actual fakes. But the magnitude of that difference needs to be determined or estimated with some sort of sampling.

I don't know a practical way of determining an appropriate random sample source. But the coins and holders would have to be examined carefully by experts for it to work.

Dealers who determine a coin is a fake will likely eliminate it from their inventory unless they have an interest in them. So their stock would be skewed toward fewer fakes.

Dealers who work on volume and trust the slab are more likely to never know they've been part of the spread of fakes. But their inventory should have a higher percentage of fakes.

Likewise, collectors will have inventories skewed toward one or the other based on their expertise. I would be very surprised if I didn't have several unknown fakes in my collection, even though I have identified many obvious fakes and other suspicious ones.

Since I try not to collect slabs, my collection contains less than 10% slabbed coins which makes me less familiar with what a Fake slab looks like. But I can say with certainty that misattribution of slabbed coins approaches 10%.

Interestingly, it's not the detailed attribution, but the generic grouping that is more often wrong. ie Head of 93 that isn't. Reverse of 96 that isn't. Even the denomination is sometimes wrong like a Half Cent labeled Large Cent and visa versa.

 

Look. If the probability of having a fake is .00125 and you have 100, then the probability of having at least one fake slab in the 100 is 1 - (1 - 0.00125)^100 = 0.11757209729647 or 11.76%.

But people don't buy slabs randomly, so this is still very unlikely. The question really is what percentage of slabs are highly convincing fakes.

 

If fakes were evenly distributed amongst genuine slabs and you were buying slabbed coins at random, sure. But obviously that is not the case. If you go to a large coin show, there might be 1 or 2 fake slabs being sold as genuine (my guess; I don’t have time to look at every coin, but I always find at least one Chinese fake being sold as genuine.). That is a very, very low percentage.

If you look for underpriced slabbed coins on eBay, you will find that the percentage of fake slabs increases dramatically. If you go on Craigslist and Etsy, the percentage increases even more.

 

1.25 slabs out of every 1000 slabs would be fake; or 125 every 100,000 slabs. But I agree with John Milton why are we focused on some percentages. The focus should be on finding solutions and to mitigate the damage to the hobby and business.

 

It's been a while since I did statistics in my head so I was off by 0.74%. I'm sure people feel much safer after the correction. But I beg to differ on the random purchases. How many collectors stick to one seller or type during their entire stint as a collector? I haven't, in fact randomly is cutting it close.

 

You pick and choose your coins for your collection. You don’t throw $$$ at a random dealer and pick up a random slab blindfolded out of their inventory. That’s what I am getting at

 

Speak for yourself! Lol

 

How on earth did you come to this conclusion? What I said was: there's a clear cut definition for epidemic, which I do not feel 10 years of almost negligible impact on the hobby to count. I also said that if we are going to accept the definition of epidemic that you and these two sites you rushed to google, then everything is an epidemic and thus nothing is. So, not sure where you somehow found that to be a compliment to you.

Also, you published your article before even researching these things, or at best failed to cite them at all until days later. Confirmation bias, pure and simple.

Looks like we are back to the actual facts: you have no idea and thus shouldn't be attempting to label anything an epidemic and frighten people away from buying from an extremely reputable TPG. You lack the basic information required to come to any sort of conclusion

What is "high risk"? Quantify that, please. There are at present over 20,000 PCGS graded Morgan dollars on ebay. What percentage of those do you estimate to be fakes? How high of a risk do I have buying them on Ebay?

You think there's a higher chance of buying a fake slab than a raw fake?! This is purely based on your premise that new collectors will only buy slabs, which I wholly reject. Your argument perhaps sounds reasonable if we accept a bunch of unfounded and extremely narrowed claims, but they don't hold up to scrutiny.

Of course I would agree to this, but let's remove one part of it and try again. If the seller is not reputable/established, and the buyer is not confident in their authentication abilities, then they should consider not buying the coin, even if it's in a slab.

No seasoned collector would tell a new collector "don't worry it's in an NGC slab, it's perfectly safe, because no one could ever counterfeit an NGC coin". I pray you don't give that advice to anyone. Just because it has a photo and it is harder to get the cert number, doesnt mean it's impossible. NGC only recently made it harder to data mine, leaving tens of millions of coins potentially already mined. Also, what's to stop them from making a coin "close enough" copy of a coin in a slab they have the cert number for? This isnt out if the realm of possibility.

As far as I see it, PCGS has created the most secure method currently available with gold shield. You can probably agree to that.

You should've not only done this, but gone further and admitted that current NGC slabbed coins can still be counterfeited.

 

This displays that you either don't understand my message, or intentionally are trying to rewrite the narrative to minimize its value. This article relies on extremely narrowed requirements, insufficient evidence, and overlooks important facts. The reason I continue to point out failure to demonstrate any sort of significant impact to the coin market is because when you have a faulty premise, you tend to arrive at the wrong conclusion.

Show me some of these currently underpriced fake slabs on Ebay. I'd like to see them!

 

I find it unlikely that anyone who collects slabbed only coins has only fake slabs...

 

Not talking about a collector. I said someone clueless. No numismatic experience but wants to "invest" in coins and finds a seller that gives them a great deal (all fakes). This is not only realistic but it has happened before many times.

 

What, the precise definition of “epidemic”? That’s because that specific definition isn’t necessary to convey the rest of the information that is far more important.

I’m specifically talking about “deals”, or coins that are significantly underpriced (gold $20 for $500 or 1794 dollar for $200 etc.). Those have an extremely high risk of being a counterfeit slab.

As I said, at least half of all collectors are completely unaware that fake slabs are a thing.

If a beginner was given the choice between a raw 1798 dollar and a slabbed one, which would they choose, regardless of the fact that both are counterfeit?

Coins will have dozens of contact marks and different toning patterns that make them uniquely identifiable. No matter how hard the counterfeiter tries, it will never be exactly right (except for the limitations given in my original post).

If you are saying that the latest NGC cert numbers can still be compromised, that is a given. Heritage can still be data-mined without limitation. That’s why it is important to have verification techniques available. I never said nor tried to imply that modern NGC slabs cannot be compromised, so I do not know why you are trying to make it sound like I did.

They’ve done that, but it was never exact. Pictures of the genuine coin showed that beyond any doubt.

I did mention this, and I said that comparing to the provided photos can uniquely identify the coin and verify the slab, which helps alleviate the severity of the problem. I even described limitations to this as well.

@Jack D. Young already did. We try to kill them off when they pop up.

 

edited.
Help me understand this, I haven't done statistics since my undergrad. If the probability of a fake were to be .125%, than there is a likelihood that 1 of the 1000 slabs would be fake. I don't understand where this 12.5 you and @Hommer keep coming up with.

 

We used your analogy. If we have one slabbed coin, there is a .125% chance that it is fake. 0.00125 equals .125%. If we have 100 slabbed coins, the chances of one of them being fake is increased 100 times.

 

I dont think it works that way. The chances are not combinable that way. Same thing for the lottery, you dont better your odds by buying more tickets...

 

I would also add the the probability approaches nil if you know what to look for on a slab, don't buy from an eBay seller that ships from China and or buy from a dear that has good provenance on the source of his inventory.

 

It's not increased 100 times! Probability is non-linear. If you roll a 10 sided die one time you have a 10% chance of rolling a 1. If you roll the die 10 times, you do not have a 100% chance of having rolled a 1 (it's actually about a 65% chance in that scenario). Cumulative probability never reaches 100% for an event that has a discreet probability of less than 1.