08 July 2019
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. But recently more and more coin dealers, precious metal sellers and attentive users of internet auction houses are finding items that are cause for alarm. It seems the number of forgeries that are offered in the US and Europe has increased sharply.
How to avoid fake coins
- Buy your coins from a reputable, trusted dealer - find a dealer
- Only buy expensive coins if they have been certified by a grading service
- If you're not sure, then don't buy it or only spend as much as you're willing to lose
- Ask for a second opinion
The trend is particularly evident in the field of modern bullion coins: counterfeited ounces of gold and silver are often offered on auction platforms such as eBay or offered to professional dealers for resale.
A closer look at some of the more dubious web portals makes it very clear: anything that can be turned into money on the European and American coin market is in fact counterfeited, even high-mintage circulation coins from the German ‘Third Reich’, which are sold for 50 cents per piece in bargain bins on coin fairs, are imitated in bulk quantities in Asian factories.
And counterfeiters also favour gold bars. They make use of a peculiarity of the bullion market: many ingot manufacturers weld their bars into hard plastic cases. This elaborately produced shell should serve as an authenticity feature. But the counterfeiters do not just imitate the bar, but also the shell.
‘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, the fraudsters have even begun to sell the fake gold bars with a counterfeit proof of purchase.
The risk of becoming the victim of a counterfeiter in the field of investment coins and bullion is now, at least from some internet auction sites, quite high. While inexperienced investors may well fall for a counterfeit bullion, reputable traders should quickly spot a gold sham.
It may sound like self-promotion, but this tip has been repeated by mints and consumer advocates for years when it comes to fraud with gold coins and bars: anyone who buys exclusively from reputable sources, is on the safe side.
Merchants check the ingots and coins from the secondary market by means of various testing techniques for authenticity and can therefore, unlike the dubious competitors from certain internet auctions, guarantee their customers the authenticity of the goods without restriction.
Many traders consider the problem of counterfeit gold bars as exaggerated and the subject of hype in the media. If you ask the big refineries in Europe how many gold bars that are being melted down actually contain tungsten and are thus fake, the answer is that this is the absolute exception. However, this logic is based on the fact that the gold bars sent to a refinery have previously been tested by a dealer. Of course, this does not say anything about the number of fake bars in circulation.
The principle holds: the greatest risk to obtain such a counterfeit bar can be excluded by buying exclusively from reputable sources. This can also be online auction houses, but only from reputable, well-known providers.
Reputable traders obtain gold bars exclusively from recognised producers who themselves have a quality control to LBMA standard or check the bars and coins from the secondary market by various testing techniques for authenticity.
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 ‘fakecoins.eu’ and ‘coinosseur.com’.
All of the coins illustrated here are fake!