Tags: numismatic | counterfeit | copy | China

Improved Counterfeit Coin Protection

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Tuesday, 27 Jan 2015 08:22 AM Current | Bio | Archive

In the closing days of 2014, the U.S. Senate joined the House, which had acted earlier, to approve the Collectible Coin Protection Act (H.R. 2754), a measure that expands and strengthens the Hobby Protection Act of 1973. President Obama quickly signed the bill on Dec. 19, before the end of the lame-duck session of Congress, transforming it into the law of the land.

It was one of only two bills that went through the Senate Commerce Committee and became law in 2014.

This victory was hardly an overnight success for those of us who fought to get the legislation passed. Way back on June 28, 2012, I was among a half dozen numismatic leaders who traveled to Washington to meet with key members of Congress and their staffs and make them aware of just how vital this bill was — even then — as protection for the public against a growing plague of predatory practices involving the sale of counterfeit rare coins and bullion coins in the marketplace.

The original Hobby Protection Act was viewed as landmark legislation when it was enacted more than 40 years ago. It prohibited the manufacture or importation of any numismatic replica that wasn't "plainly and permanently" stamped with the word "COPY."

Counterfeit gold coins, often made in Lebanon, were a serious problem at that time and the law provided a tool for counteracting their flow into the U.S. marketplace. Passage of the law helped suppress the problem, but never eliminated it. It was still a significant concern a decade later, in the 1980s, when I was working as an authenticator for the American Numismatic Association Certification Service (ANACS) and teaching counterfeit detection classes for the ANA.

In recent years, the problem has returned with a vengeance because of a flood of counterfeit U.S. coins from China — almost never stamped with the word "COPY" — and the ease of selling such coins, from China and elsewhere as well, especially on the Internet. Chinese counterfeiters have become far more sophisticated and are now making fakes whose quality often fools even experienced collectors.

Even U.S. Mint bullion products, such as silver and gold American Eagle coins, have turned up in counterfeit seizures in recent years. What's more, the Chinese malefactors have also become adept at reproducing the holders used by U.S. coin-grading services to house and display the grades of certified coins, exposing American buyers to a double-barreled threat.

The Collectible Coin Protection Act adds teeth to the 1973 law in a number of important ways:
  • It includes penalties not only for distribution of prohibited items but also for their sale in commerce.
  • It permits prosecution of "any person who provides substantial assistance or support to any manufacturer, importer or seller" knowingly engaging in any act or practice that violates the law.
  • It authorizes legal action against anyone who is involved in the manufacture, shipping or sale of a prohibited item.
  • It adds a section on trademark violations specifically written to include the certification services and to add remedies to the Hobby Protection Act that currently exist only under the Trademark Act of 1946.
Former Rep. Jimmy Hayes of Louisiana, a prominent numismatist who now serves as a legislative consultant to the Industry Council for Tangible Assets (ICTA), played a major role in shepherding the new legislation through Congress.

Pressure from the numismatic community was vital, as well, in achieving the hard-earned victory, as I can attest from my years of participation in the process. ICTA was in the forefront of this campaign, especially during the crucial final year; indeed, it viewed this as its most important initiative for 2014.

I had a catbird seat — and direct role — in the battle as a member of ICTA's Board of Directors. Other important assistance was provided by the Professional Coin Grading Service and the Numismatic Guaranty Corporation of America.

This gives the hobby powerful new weapons with which to wage a needed counteroffensive against counterfeits.

The original Hobby Protection Act specifically targeted "imitation political items." It defined such an item as one that "purports to be, but in fact is not, an original numismatic item, or is a reproduction, copy or counterfeit of an original numismatic item," and required manufacturers and importers of such items to mark them with the word "COPY."

The legislation designated the Federal Trade Commission (FTC) to develop regulations specifying how the marking should be carried out. The FTC did so in 1975, when it promulgated Rules and Regulations establishing the sizes and dimensions of the letters and numerals to be used, as well as the location of the markings.

In 1988, the rules were amended to provide additional guidance on the minimum size of the lettering in the word "COPY." And now, far more sweeping changes have been made to update and upgrade the Act's protection.

About the Author: Mike Fuljenz
Mike Fuljenz is a member of the Moneynews Financial Brain Trust. Click Here to read more of his articles. He is also the editor of the NLG award-winning Michael Fuljenz Metals Market Weekly Report.

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MikeFuljenz
In the closing days of 2014, the U.S. Senate joined the House, which had acted earlier, to approve the Collectible Coin Protection Act (H.R. 2754), a measure that expands and strengthens the Hobby Protection Act of 1973.
numismatic, counterfeit, copy, China
838
2015-22-27
Tuesday, 27 Jan 2015 08:22 AM
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