FTC Issues Rule Against Overgrading
By and large, it’s grading and rarity that determine the value of a coin. Rarity is easy enough to establish. Grading is often a matter of opinion.
It’s for this reason that grading services came into being. Their purpose is to give an impartial rating to a coin, which virtually establishes a particular price.
But what happens if the grading service misrepresents the grade of a coin, thereby increasing its value?
That’s the situation described by Bill McAllister of the Washington Post in regard to a recent decision by the Federal Trade Commission. The commission determined that overgrading coins was a “deceptive and unfair act” prohibited by the 1914 law that created the FTC.
Charged with this practice were two Texas-based corporations, Heritage Capital Corp. and Numismatic Certification Institute. Also named in the action were Steve Ivy and James Halperin, prominent numismatic figures. A consent order was signed agreeing to establish a $1.2-million fund for collectors who purchase the NCI-graded coins from Coin Galleries Inc. of Miami.
Other collectors will benefit from this action, FTC lawyers say, because those involved are prohibited from “knowingly and substantially assisting any third party in misrepresenting” any information about coin purchases and are barred from issuing any grading certificates “likely to mislead consumers.”
Collectors should also benefit by the positive reinforcement this should render to the other grading services. While the process has been tainted, the leading services--Professional Coin Grading Service, National Guaranty Corp. and the American Numismatic Assn.--are unscathed. But this should serve as a warning to the entire industry, even though those involved with the FTC settlement do not admit any of the allegations.
The fact is, overgraded coins bring inflated prices. And it’s wrong, whether it’s done deliberately or inadvertently. It’s too bad that the government had to step in, but perhaps it’s necessary when self-regulation doesn’t work.
Question: Herewith, I send you two photocopies of two of my coins. Would you kindly tell me how much these coins are worth? One is gold with two small holes (it appears to be from the years 814 to 1125) and concerns the Resurrection of Christ; the other is also gold, had a handle soldered on it, which has been removed. It’s from Batavia (present-day Jakarta), dated 1800.--J.B.
Answer: Both coins appear to be damaged. I suspect they’re medals. The value is probably mostly in the gold, due to condition. Both appear to be in the $75-to-$100 range.
Coin News
Collections owned by noted violinist Jascha Heifetz, and by Albert Hanten, Paul Munson and others will be featured in an auction Oct. 1, 2, 3 and 4 conducted by Superior Galleries. Included in the sale is a 1907 $20 high-relief gold piece (pictured) graded MS-67, considered the finest known example of that type. Also on sale will be more than 12 examples of $20 pieces in proof condition. The Hanten collection consists of more than 500 United States notes while Munson specialized in bust half dollars. More than 5,000 lots will be offered with an insured value of more than $20. Viewing is by appointment only. Catalogues are $25 from Superior, 9478 W. Olympic Blvd., Beverly Hills, Calif. 90212-4299; telephone (213) 203-9855.
A special intaglio print depicting the signing of the Declaration of Independence will be featured at this weekend’s American Numismatic Assn. show in Pittsburgh, Penn. The vignette was originally designed as part of the Centennial Share Certificate of 1876. The print is available by mail for $22.50 from the Bureau of Engraving and Printing, Mail Order Sales, Room 602-11A, 14th and C streets SW, Washington, D.C. 20228.