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<p>[QUOTE=&quot;vavet, post: 353896, member: 11630&quot;]It had &quot;absolutely nothing to do with the grading of coins that PCGS was doing. It had only to do with advertising.&quot; </p><p>&nbsp;</p><p>Part of that bogus advertising (that is still being done in a vailed manner today) was that their grading was &quot;consistent&quot;, &quot;objective&quot;, &quot;unbiased&quot;, and that they weren&#039;t grading their own coins.</p><p>&nbsp;</p><p>For the benefit of anyone interested, here&#039;s the rest of the story straight from the source.</p><p>&nbsp;</p><p>&nbsp;</p><p>FOR IMMEDIATE RELEASE:&nbsp; August 17, 1990</p><p><br /></p><p><br /></p><p>&nbsp;&nbsp; &nbsp; &nbsp;&nbsp; FTC CHARGES COIN CERTIFICATION CO. MISREPRESENTS</p><p>&nbsp;&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;&nbsp; OBJECTIVITY OF ITS COIN GRADING SERVICES;</p><p>&nbsp;&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;&nbsp; COMPANY AGREES TO SETTLEMENT</p><p><br /></p><p><br /></p><p>&nbsp;&nbsp; &nbsp; The Federal Trade Commission has charged that Professional</p><p>Coin Grading Service, Inc. (&quot;PCGS&quot;) misled consumers by falsely</p><p>claiming that it provides consistent, objective grading of coins</p><p>and that investment in PCGS-certified rare coins eliminates all</p><p>the risk associated with the grading of coins.&nbsp; Under a consent</p><p>decree filed August 16 in federal district court, PCGS is prohibit-</p><p>ed from making false representations about its objectivity, con-</p><p>sistency, or the liquidity of its coins, and from making deceptive</p><p>statements about the risks of investing in graded coins. </p><p><br /></p><p>&nbsp;&nbsp; &nbsp; According to the FTC&#039;s Boston Regional Office, which handled</p><p>the investigation, PCGS was formed in August 1985 by seven promi-</p><p>nent rare coin dealers for the purpose of providing a consistent,</p><p>impartial, &quot;certified&quot; coin grading service upon which purchasers</p><p>and sellers of rare coins could depend.&nbsp; For a fee of approximately</p><p>$25 to $100 per coin, PCGS claimed that a coin would be impartially</p><p>and accurately graded by several of &quot;the world&#039;s top grading</p><p>experts.&quot;</p><p><br /></p><p>&nbsp;&nbsp; &nbsp; According to the complaint accompanying the consent decree,</p><p>PCGS falsely represented that its grading system is objective, con-</p><p>sistent, and unbiased; that an investment in PCGS coins eliminates</p><p>the risk associated with the grading of coins; that its coins can</p><p>be liquidated easily at reasonable, competitive prices; and that</p><p>it observes a &quot;strict anti-self interest policy.&quot; </p><p><br /></p><p>&nbsp;&nbsp; &nbsp; In fact, the complaint charges, PCGS has not provided object-</p><p>ive or consistent grading, and coin grading involves a certain</p><p>amount of subjectivity.&nbsp; Not all PCGS-certified coins can be li-</p><p>quidated easily at reasonable, competitive prices, according to</p><p>the complaint, and PCGS does not in all cases observe its &quot;strict</p><p>anti-self interest policy.&quot;&nbsp; In addition, the complaint charges,</p><p>investment in PCGS-certified coins does not eliminate all the risk</p><p>associated with the grading of coins.</p><p><br /></p><p>&nbsp;&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; (More)</p><p><br /></p><p>&nbsp;&nbsp; &nbsp; Under the terms of the consent decree, PCGS is subject to num-</p><p>erous prohibitions and requirements.&nbsp; PCGS is prohibited from mis-</p><p>representing that its grading is objective, consistent or unbiased,</p><p>or that an investment in PCGS-certified coins eliminates all risks</p><p>associated with the grading of coins.&nbsp; PCGS is also prohibited from</p><p>misrepresenting that PCGS-certified coins are liquid at reasonable,</p><p>competitive prices.</p><p><br /></p><p>&nbsp;&nbsp; &nbsp; In addition, for a period of two years, PCGS must disclose in</p><p>all of its advertising and promotional material that &quot;Certification</p><p>by PCGS does not guarantee protection against the normal risks</p><p>associated with potentially volatile markets.&quot;&nbsp; The decree further</p><p>requires that any claims about the safety or security of an invest-</p><p>ment in PCGS-certified coins be accompanied by a clear and conspic-</p><p>uous disclosure that the rare coin market is highly speculative and</p><p>subject to risk.&nbsp; PCGS must also clarify its liquidity claims with</p><p>a disclosure that the degree of liquidity, and the availability of</p><p>markets for certain coins, will vary from time to time. </p><p><br /></p><p>&nbsp;&nbsp; &nbsp; The complaint and consent decree were filed in the U.S. Dis-</p><p>trict Court for the District of Columbia. </p><p><br /></p><p>&nbsp;&nbsp; &nbsp; Professional Coin Grading Service, Inc. is based in Santa Ana,</p><p>Calif. </p><p><br /></p><p>&nbsp;&nbsp; &nbsp; A consent decree is for settlement purposes only and does not</p><p>constitute admission of a law violation.&nbsp; Consent decrees have the</p><p>force of law. </p><p><br /></p><p>&nbsp;&nbsp; &nbsp; Copies of the complaint and consent decree are available from</p><p>the FTC&#039;s Public Reference Branch, Room 130, 6th St. and Pennsyl-</p><p>vania Ave. N.W., Washington, D.C.&nbsp; 20580; 202-326-2222; TTY 202-</p><p>326-2502.</p><p><br /></p><p>&nbsp;&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;&nbsp; # # #</p><p><br /></p><p>MEDIA CONTACT:&nbsp; &nbsp; &nbsp; Office of Public Affairs, 202-326-2180</p><p><br /></p><p>STAFF CONTACT:&nbsp; &nbsp; &nbsp; Phoebe D. Morse, Boston Regional Office,</p><p>&nbsp;&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;&nbsp; 617-565-7240</p><p><br /></p><p><br /></p><p>(Civil Action No. 90-1982)</p><p><br /></p><p><br /></p><p>(PCGS)[/QUOTE]</p><p><br /></p>

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