Numismatic Guaranty Corporation - Controversies

Controversies

In the May 26, 2003 edition of Coin World, the hobby newspaper had announced they had contracted investigators to conduct a year-long, comparative study of PCGS, ACCGS, and NGC, along with several other grading services, each known as Third Party Grader (TPG). In their investigation, Coin World sent the same coins to each grading service over the course of a year, each coin being graded by all Third Party Graders it was sent to. They found that "In no case did the grading services agree on the grade of any given coin, and in some cases the difference in grading was as much as seven points off". By way of example, a finding published by Coin World involved one case where ACCGS had graded a coin as "cleaned", which lowers the coin value. It is standard in U.S. numismatics to grade coins on a point-scale from 1 (poor) to 70 (perfect)and to note if a coin has been cleaned or poorly mishandled, or in some cases, to reject it for encapsulation.

In September 2004, members of the American Numismatic Association (ANA) reported seeing counterfeit NGC and PCGS holders (also known as "slabs") at the Long Beach Coin Show. Members of the Beverly Hills Coin Club (BHCC), an affiliate club-member of the ANA, had reported counterfeit coin slabs as early as December 3, 1998. As a direct result, BHCC partnered with ACCGS, manned by unpaid club volunteers, as a pre-certification service for coins and to "guarantee the authenticity of slabs or Third Party Grader holders". More counterfeit PCGS and NGC holders were reported on eBay in 2005 and later years, but NGC did not address the problem until 2008, after high-quality counterfeit holders had been seen and purchased on eBay. NGC published the following acknowledgment on January 7, 2008:

"NGC has identified and confirmed that (counterfeit replicas) of its holder has been produced... The holder has been seen housing counterfeit dollar or foreign crown size coins. While the enclosed coins are also counterfeit, the label information matches the coin type enclosed. The label information is copied from actual NGC certification labels, and the certification information therefore will match the NGC database. Most frequently, Trade Dollars and Bust Dollars are found, although Flowing Hair Dollars and foreign coins have also been seen. A range of grades is also represented."

NGC and PCGS counterfeit holders have been reported in eBay forums and more may be reported by other firms and individuals. The PCGS website notes that they even "anticipate that authentic coins will eventually be placed into counterfeit holders". Third party graders are taking measures to resist counterfeiting, but these fakes may still multiply and improve over time. NGC and PCGS can not offer reimbursement liability for the prices paid for coins in counterfeit holders. Both firms have online links to verify the holder numbers. Caution is advised when purchasing coins in PCGS and NGC holders as the seller can disclaim liability due to the "third party" nature of the counterfeit holder. Additionally, it may be too late to request refunds from eBay sellers before holders can be verified as counterfeits. Many coins are posted on eBay and through other venues "as is" and therefore with no return privileges.