I will preface this article by saying this is not a vendetta piece against NGC, PCGS, nor any other third-party grader. It is merely a statement of facts and implications of the scope of Chinese counterfeiting to inform potentially unaware collectors. All statements are true and have been verified to the best of my ability. If anything is factually incorrect, I will publicly apologize and request for a correction to be made. Please correct me if anything is incorrect. No opinions or assumptions are being put forth unless explicitly described as such. Gaps in my knowledge will be indicated as well. (NGC and PCGS are written in alphabetical order. No other reason for that order.) The Scope Counterfeit NGC and PCGS slabs were first encountered in 2008, and they have become alarmingly plentiful in the ensuing decade. Since the counterfeits are produced in China, outside of US legal jurisdiction, NGC and PCGS are powerless to stop the counterfeiting. They, however, have a copyright claim in the US and can take action against anyone in the US knowingly distributing fake slabs. They have also successfully taken action against major Chinese-owned wholesaler websites, making it such that counterfeit NGC and PCGS slabs can no longer be posted there. This has made procuring counterfeit slabs much more difficult. There is a very wide variety of styles and qualities in the fake slabs, which indicates that they are from many different sources. However, NGC and PCGS simply cannot police every slab put up for sale, so they cannot detect whenever counterfeit slabs are put up for sale. The grading services rely on collectors and dealers to report counterfeit slabs. When a fake holder is spotted, both NGC and PCGS will update their respective verification pages to warn anyone looking up the certification number that the serial number has been compromised. NGC and PCGS have taken two different approaches to proactively combat the issue and protect collectors from the fake slabs. (EDIT: ) Counterfeit ANACS, ICG, and SEGS slabs have not yet been seen, so they are not discussed here. However, they have very little in the way of slab security compared to NGC and PCGS to protect collectors from fake slabs. Slab Verification NGC has been taking pictures of each and every coin they have certified since fake slabs started appearing on the market in 2008. However, the photos are poorly lit resulting in it being almost impossible to see details of brown copper coins in NGC’s pictures (see example below). For all other coins, identifying marks can be easily distinguished and matched to the coin in hand. This is of limited use to MS/PF-69/70 modern coins because there are few/no identifying marks, and the coins were made to look exactly the same. Use of other tools, such as the Sigma PMV, or simply comparing the slab itself to the pics can be used instead. Most often, the barcode has noticeable errors, but some have come up lately that have a perfectly-matching barcode. NGC has no slab verification pictures for coins graded before 2008, so they cannot be verified using NGC resources. PCGS provides pictures (AKA TrueViews) of some coins they certify, but only those for which the submitter paid for the TrueView service or if the coin is submitted in the Gold Shield grading tier. (EDIT: PCGS has recently announced that they will start taking pictures of each and every coin they certify.) If the coin in question does not have a TrueView, then the slab cannot be verified using PCGS-owned resources. PCGS has recently implemented a new Near-Field Communication (NFC) chip in their slabs that generates a one-time encrypted password that can be verified with the PCGS servers. Currently, the NFC chip is only being implemented on Gold Shield holders, which already have TrueViews. For these coins, the chip is very redundant and not nearly as helpful to the collector as the TrueViews. PCGS plans to eventually implement the NFC chip to all slabs. (EDIT: PCGS has announced that they will start implementing NFC chips in all slabs.) There are still concerns about whether or not the chips can be hacked or swiped or stolen from cracked-out slabs, but time will tell if those fears are founded or not. For now, the NFC chip system is quite secure. The chip also requires particular phone models, which many collectors may not have. Heritage and Great Collections list the certification number in their listings. The listings can be looked up in Google by searching the serial number and the TPG name. There are usually pictures that are sufficiently clear to verify whether or not the coin in the slab matches the one in the pictures. These companies are run by experts, so the slabs pictured are extremely likely to be genuine. To my knowledge, they have not sold a single fake slab in one of their auctions out of the tens of thousands that they have auctioned off. The PCGS certification verification pages cross-reference the slab serial number with previous sales in several major auction houses and even eBay (eBay now requires a certification number to list certified coins). The auction houses usually have pictures of all the coins in their past auctions, but eBay pictures are purged after 90 days. The main photo on the eBay listing can be retrieved using a tool offered by the Coin Community Forum. These photos can be used to verify the slab. Caution should be employed when using eBay photos, though, since records will still show up for fake slabs sold on eBay. (EDIT: ) A note on barcodes: They are NOT randomized bars and spaces that can only be decoded by PCGS’ or NGC’s servers. They are just a regurgitation of the info on the slab but in barcode form (serial number, grade, series number, etc.). Any counterfeiter with genuine slabs and a barcode reader can easily decipher and replicate the barcodes. In fact many counterfeit slabs do employ a legitimate barcode, but it is often copied from one label and pasted to a new, completely-irrelevant label. Also in the counterfeiter’s arsenal is the ability to copy the slab label from an image and print it out for use in a counterfeit slabs. These can be very difficult to differentiate from genuine labels, but it will usually be missing the embossing, have image compression characteristics, have scaling/distortion issues, or be missing other characteristics of genuine labels. See an example here: https://www.cointalk.com/threads/an...c-scope-and-advice.355364/page-4#post-4151523 Preventing Data Mining One form of Data Mining is when an entity rapidly and repeatedly puts in various inputs and records the outputs. Relevant to this topic is inputting a slab’s serial number and recording the coin type, date/mint, and grade. This information is extremely useful for counterfeiters because they can create a database of type/date/mint/grade with matching serial numbers. Then all they have to do is match the counterfeit coin to the fake slab. NGC’s verification tool on their website requires knowledge of both the serial number and the grade. The serial numbers are composed of a batch number and the number of the coin within the batch, so knowledge of the number of coins in the batch is also required. In addition, the website limits how many cert lookups can be completed in a given amount of time. All three of these things greatly prevent a successful data mining operation using NGC’s website. (EDIT: ) PCGS also limits the number of entries on their verification site. In contrast, PCGS’s verification tool does not require any info other than the serial number. Their serial numbers also simply increase numerically (for the most part; not every number in the sequence is used). This makes it simpler to create an input/output database, though would-be counterfeiters are hindered by the limitations on the number of attempts. (EDIT: ) One way to bypass the verification tools is to plug-and-play the desktop URL links to the verification pages. However, according to representatives from NGC and PCGS, their websites also limit these entries as well. (EDIT: ) For NGC, their link is https://www.ngccoin.com/certlookup/#######-###/GG/, where GG is the grade of the coin. Again, you would have to know the batch number, the coin number in that batch, and that coin’s grade to get a successful hit. This greatly increases the number of tries needed to get the successful hit. (EDIT: ) For PCGS, their link is simply https://www.pcgs.com/cert/########. It is really easy to program a computer to cycle through URLs by sequentially inputting serial numbers and recording the information on the page that comes up if the serial number is legitimate. (EDIT: ) One thing I have not verified is if spoofing one's IP address using a VPN after a number of iterations will still trigger the limiters on PCGS' and NGC's websites. The number of counterfeit PCGS slabs that have neither TrueViews nor auction records is increasing, which indicates that the counterfeiters are getting smarter and making their wares more deceptive. The serial numbers from these slabs likely came from data-mining PCGS’ website or exploring the coins available on eBay or offered on other dealers' websites. This is just conjecture, though. In Heritage’s website, one can search their archives using slab serial numbers. Since their coin operation is highly commoditized, all of the relevant info is stored explicitly and concisely in the listing title, which makes the data miner’s job easier. For PCGS coins, the series number is in the description, which can be used to complete the text on the slab and create a barcode. Most of the compromised slab serial numbers can be verified on Heritage, which indicates that they possibly do not have a limiter on search attempts. Again, this is conjecture that still needs to be verified. How Can You Reduce the Risk to Yourself? There are several practices you can employ to protect yourself from fake slabs: Learn how to authenticate coins. Most of the coins in counterfeit slabs have obvious indicators of inauthenticity. Send me your email via PM and I will send you slides from a counterfeit detection seminar I gave at FUN earlier this year. Learn how to grade coins. The vast majority of the fakes in the counterfeit holders have a grade that is significantly different from what the slab says. If the coin is obviously off by 4 grade levels or more (eg AU-50 vs VF-30 or MS-68 vs MS-64), treat it with suspicion. PCGS and NGC are highly competent and very, very, VERY rarely make such a big mistake. Also, if the coin is significantly overgraded, not only should you not want to buy it, there is a chance it could be a genuine coin in a fake holder. Also, PCGS only guarantees their grade within around 2 grade levels. Any more they reserve the right to claim that it was just a “mechanical error.” Become intimately familiar with genuine slab appearances, style, feel, font, etc. This will require handling thousands of genuine slabbed coins. (EDIT: There was a seminar given at the Newman Numismatic Portal Symposium where these aspects were discussed in depth. Watch here: https://nnp.wustl.edu/library/book/588157 ) Check for any evidence that the slab is a snap-together design. Real slabs are sonically sealed. Many of the counterfeit slabs are composed of two halves that snap together. Look up the slab serial number on the TPG website or on Google and see if there is a picture you can match to. If the slab has an NFC chip installed, use that as well. If you cannot verify the slab and if you are not confident in your own or your dealer's authentication abilities, then seriously consider passing on the coin. If you are confident in your or your dealer's authentication abilities, then go ahead. Just be aware of the limited recourse options you have if the slab turns out to be fake, and possibly limit your purchases to only dealers who guarantee their wares. Keep in mind that if the coin is fake, but the slab is genuine, then you are covered by NGC’s/PCGS’ authenticity guarantee. Having a picture of the coin in the slab provided by the grading services makes making such a claim much easier. However, if the holder is counterfeit, you are on your own, and your only recourse is a refund from the seller or legal action. (EDIT: ) Steps Forward (EDIT: ) There are millions of genuine slabbed coins that do not have a verification picture provided by NGC or PCGS and have not passed through a major auction house. NGC started taking pictures of every coin they have certified since 2008, while PCGS has primarily only taken pictures of coins for which that option was selected by the submitter (This is soon to change). That means most pre-2008 NGC slabs cannot be verified, nor can most normal PCGS slabs from over the entire length of their operation. With the number of fake unverifiable slabs growing every day, what steps can the grading services take to better protect the collectors they serve? A couple of my suggestions include: 1. Offer photography at coin shows for coins that have not yet been imaged by the grading services. They can be quick and dirty like NGC's or Heritage's full-slab photos to get as many processed as possible. The barcodes can be used by a computer program to automate placing the images on the cert verification pages. 2. Ask major and well-reputed dealers and auction houses to send in their current and archived images of coins in slabs for coins which do not have verification images Implementation of any of these steps could be tricky or expensive, but the problem of the “unverifiable” slabs cannot be ignored. Examples There is a wide range of quality in the counterfeit slabs. This example is very low quality with a very obvious counterfeit coin in it. Very few collectors would be fooled by this, but some probably would be. No pictures are available online of the genuine coin, so it could not be visually verified. The holder is very well done on this one, but the holograms and microprinting on the label are missing, and the font is very cartoonish. The barcode is correct but very mushy. The coin itself is an obvious fake when compared to the NGC image. Here is a higher-quality counterfeit in a counterfeit slab. The counterfeit is gem quality, while the slab says AU-58. Someone might get greedy and hope for a big upgrade payday, but the coin is obviously fake, as is the holder. The coin could be verified using images from Heritage. No TrueView. This is another counterfeit in a counterfeit slab. Differences can be seen in the coin and the label and holograms, but overall, the slab is quite convincing. The coin inside has damage that should not warrant the MS-70 grade, which should be a major red flag. Here is a high-quality counterfeit coin in a counterfeit holder. This one is particularly scary as the grade is very close to that on the slab. It could be verified using images from Heritage. No TrueView. This is a genuine coin in a high-quality counterfeit holder. This coin and holder also passed CAC (assuming the sticker is genuine, but this cert is in CAC’s system). The toning does not match the pictures and is impossible to have been altered by gassing. Also, “Treasury” is misspelled. And here is a genuine coin in a fake slab. Note how it looks like an XF-45 but is in an AU-55 slab. That is a red flag. Also note how the hologram sticker is covering up the QR code. It was sent in to PCGS, where they deemed it to be a genuine coin in a fake slab. No pictures were available to verify this coin. Conclusion This day and age of computers and the internet has greatly exacerbated the prevalence of counterfeit coins and slabs in the market. The trajectory of the improvement in technology, the sophistication of counterfeits, and the scale of Chinese counterfeiting operations are not going to abate anytime soon, meaning the problem is only going to get worse. The grading services and their slabs were meant to facilitate the sight-unseen market and allow collectors with little knowledge and experience to confidently buy coins. With fake slabs taking up an ever-increasing market share, the sight-unseen market and inexperienced dealers and collectors have been placed in grave danger. As a result, individuals who have limited skills in grading and authenticating coins and slabs should be strongly encouraged to develop these skills before buying any more coins. If developing these skills is not an option for whatever reason, then they should stick to slabs that can be absolutely verified using pictures or security chips (assuming the chips never get hacked, which is unlikely) and seriously consider passing on all other slabbed coins unless offered by a well-reputed dealer. The grading services have worked hard to diminish the shortcomings in the protection for collectors and dealers, but there are definitely areas that can be improved for the benefit of us all.