Great rarities can be found in odd places, but do your research first
What should a collector do when he or she finds an online auction of high-powered numismatic material offered by a business whose name is unfamiliar?
That question arose after a recent telephone call from a reader who believed that he had identified a fraudulent online coin auction by a firm whose name was unfamiliar to him (and to Coin World). We’ll return to that call in a bit.
Smaller auction firms who generally conduct sales of other materials sometimes offer numismatic gems. Arthur L. Friedberg, who reports on paper money news for Coin World, reported in 2015 on an auction by Duane Merrill & Company, a long-established firm that bills itself as Vermont’s largest auction house since 1967. Duane Merrill does not often offer great numismatic rarities, but its April 18, 2015, auction offered a sleeper — what astute bidders recognized as the first-known example of a Series 1902 Red Seal national bank note from the First National Bank of Ely (Nevada). The $5 note was offered in the auction with a starting bid of $1,000 and a $2,000 to $5,000 estimate, not unreasonable amounts for similar though common national bank notes.
This note, however, was anything but common, and when the auction was over, the note had realized $120,750. The winning bidder got a great unique note, the elderly consignors realized much more than they expected from their consignment of mostly New England paintings, and the auction house benefitted from bidder fees that were well beyond what they had anticipated. This was the perfect example of why collectors should sometimes seek out gems in unusual places.
However, it also pays to be wary of auctions by firms who offer little or no history of selling rare and valuable numismatic material, which brings us back to the phone call.
He had been searching online when he came across an auction that seemed too good to be true. The collector was wary because, he explained, he had been defrauded several years ago in a similar auction.
He spent several days researching the coins in the online auction and eventually found some of the same coins (as shown by the serial numbers on the third-party grading service slabs housing them) offered at fixed prices by a longtime Coin World advertiser. He contacted that firm and learned that other collectors had also contacted its owners, all telling our advertiser that it appeared that the auction firm claiming to offer the coins had misappropriated the images from the actual owner’s website.
Coin World, too, contacted its longtime advertiser, and representatives confirmed they were aware of the misuse of their images and were working to have the auction taken down
Collectors can protect themselves in similar situations by doing their research before bidding. In the April 2015 Duane Merrill sale, bidders confirmed the legitimacy of the note and brought a previously unknown issue into the numismatic marketplace. And the recent caller to Coin World and others did their research and may have prevented other collectors from being defrauded.“Knowledge is power” is a cliche, but in these cases, the cliche was accurate.?