01 November 2022
A modern plague threatens collectors and investors with an increasing number of fake coins being sold via the internet. Sebastian Wieschowski provides an in-depth guide to avoiding these counterfeit coins
The problem of counterfeit coins is not a new phenomenon. In 2017, the Royal Mint estimated that 2.5% (around £44m) of the old £1 coin was counterfeit. In recent years, many coin dealers and precious metal sellers have noticed an upsurge in the number of counterfeit items being offered.
In the field of modern bullion coins, counterfeit ounces of gold and silver are often sold on auction platforms such as eBay or offered to dealers for resale.
When you look at some of the more questionable coin websites, you can easily see: Anything that has the potential to make money on the European and American coin market is counterfeited. Even high-mintage circulation coins from the German ‘Third Reich’, which are sold for 50 cents apiece at coin fairs, are imitated in bulk quantities at Asian factories.
Counterfeiters also use gold bars. To deter forgery, many ingot manufacturers weld their bars into hard plastic cases. This elaborately produced shell should serve as an authenticity feature. But counterfeiters have become so good at forging even this casing that it is no longer a dependable means of determining the authenticity of a bar.
‘The fakes are becoming more sophisticated, says Waldemar Meyer, store manager at Germany’s largest precious metals dealer ‘pro aurum’ in Berlin and head of the non-profit ‘German Precious Metal Society’ initiative. Recently, fraudsters have even begun to sell fake gold bars with a counterfeit-proof of purchase.
As more and more internet auction sites offer investment coins and bullion, the risk of buying counterfeits has grown. While inexperienced investors may easily be fooled, reputable traders can spot a sham.
This may sound banal, but you can't go wrong following this advice from mints and consumer advocates: to avoid fake gold coins and bars, buys exclusively from reputable sources. This is always the safest option.
Unlike individual or unknown traders selling on online auction sites, merchants obtain gold bars exclusively from recognised producers who themselves have quality control to LBMA standards as well as check the ingots and coins they buy from the secondary market using various testing techniques for authenticity. This guarantees their customers that they can buy them with confidence.
Many traders consider the problem of counterfeit gold bars to be overblown by the media. This is so because according to big European refineries, very few gold bars being melted contained tungsten and are fake. However, this does not take into consideration the fact that many dealers test their gold bars before sending them to a refinery. Therefore, it does not say anything about the number of fake bars in circulation. This, in fact, simply prove that buying exclusively from reputable sources reduces the risk of buying a counterfeit bar.
So to avoid fake coins, you should:
- Buy your coins from a reputable, trusted dealer - Find a dealer
- Only buy expensive coins if they have been certified by a grading service
- Don't buy collector coins if you're unsure of their authenticity or only spend as much as you're willing to lose
- Ask for a second opinion
All of the coins illustrated here are fake!
Sebastian Wieschowski is the author of the ‘Fake Coin Bible’. His self-published reference guide was given the ‘Extraordinary Merit’ award in 2018 by the Numismatic Literary Guild (NLG), an independent US-based organisation that honours remarkable achievements in the field of numismatic reporting. You can find out more about counterfeit coins on ‘coinosseur.com’.
Osborne, H. (2012, April 6). Your counterfeit £1 coin questions were answered. The Guardian. Retrieved November 23, 2022, from https://www.theguardian.com/money/2012/apr/06/counterfeit-pound-coin-guide