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David Lawrence Rare Coins View on PCGS’ Hard Stance Against Coin Doctors

Guest Commentary By John Feigenbaum – David Lawrence Rare Coins

On Friday, May 28, the numismatic community learned of lawsuit filed by Collectors Universe (the parent company of PCGS) against a group of so-called coin doctors. There’s no reason to rehash the details of this lawsuit as you can find good information on the site, including a PDF of the actual filing.

From my perspective, action against the “coin doctors” has been overdue. For years, these guys have enjoyed an unfair advantage in the U.S. coin market and their presence in the general marketplace and auctions made it more difficult for legitimate buyers to compete. But we all accepted their existence because these folks have been around as long as there was a profit to be made in artificially improving coins. The grading services were designed originally to eliminate this scourge, but these guys are good and their methods are ever-improving. The extent of the doctoring of late has been somewhat hidden during this time, so some of the revelations in the filing are news, even to me. Now, it seems PCGS has drawn a line in the sand and they are throwing the book at some known offenders. More like a hammer, actually.

The heart of the matter seems to lie in the definition of exactly what is meant by the term “coin doctoring”. Are we talking about the dipping, or conservation of a coin’s surfaces? Are we talking about artificial toning of a coin to cover past cleaning, or scratches? Or, are we talking about the most nefarious acts of moving metal (whizzing, lasering) and surface alteration, like the enhancement of the bands of a Mercury dime to achieve the Full Bands (FB) designation?

I absolutely applaud PCGS for taking this measure. It has been too long in coming and it’s high time the leaders of the coin market took a stand against the alteration of a coin’s surface to deceive the grading houses.

In filing this suit, PCGS has aimed a missile at the latter-mentioned offenders. The so-called “metal movers”. There is no room for argument in any of our minds that this is wrong and should be dealt with harshly. Clearly PCGS has known about these guys for some time because the examples they present in the brief acknowledge a “rebuilt full head standing quarter” back in 2005. So, why now? The most logical conclusion I can make is that – for too long — they hoped the problem would end on its own through better detection techniques, and now they have also announced something called a Coin Sniffer™, for this purpose. I suppose this is the other shoe in PCGS’ “Big One” announcement back in March.

So, if lasering, re-engraving and rebuilding are obviously wrong and (perhaps) criminal acts (see paragraph #47), the bigger question is what is the low-watermark standard for coin doctoring? Is adding any foreign substance to the surface of a coin to conceal damage of any kind (hairlines, gouges, etc) going to be considered “doctoring”?

I would like to see PCGS take the next step of defining what is legitimate conservation versus doctoring. Perhaps a consortium of industry leaders like PCGS, NGC, CAC and PNG could work together to create such a document. It’s not clear that PCGS is interested in doing so, but I hope they would consider such a move to unify the marketplace.

Where does DLRC Stand?
The philosophy of DLRC has long been to allow to the grading services to police themselves. We are long-time supporters of PCGS and NGC and believe they are capable of reacting to market forces and make the correct judgments on valuable coins. We see our role in the marketplace as educators and resellers. We are always willing to give advice on any specific coins as to our opinion of its surfaces and quality but we’ve largely left the grading to the services. The announcement also reaffirms CAC’s role in the marketplace – as the graders of the graders. More than ever, the CAC sticker can and will protect you from lapses in judgments of PCGS and NGC.

At DLRC, we have largely stopped selling coins certified by ICG, SEGS, as well as most ANACS coins because we feel the quality has slipped too much at these operations. In 2008, we acquired PCI (a defunct grading house) for their equipment only and renamed the operation Dominion Grading Service. DGS grades far more conservatively than any other grading service and therefore cannot make money in the current environment maximum grade wins all — almost by design. But that’s ok.

We grade with such strictness because we will always honor the grades of coins in DGS holders – in essence we putt our money where our mouth is. We really upset a major coin doctor in the early days at DGS by no-grading 90% of his entire submission. He was extremely upset and it was an early trial for us, but we now feel vindicated.

Thank you PCGS. We support you and hope that you succeed in cleaning the pond…

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