Whether you're buying or selling, or considering investing in an antiques project, here are the antiques scams and pitfalls to look out for: Internet Scambusters #304
This week we begin a two-part feature on antiques scams -- the tricks the con artists play to lure you into buying or selling something for more or less than it's worth.
Although most dealers are honest, it's the unscrupulous ones who give the business a bad name by hoodwinking customers with bogus collectibles, dishonest appraisals and sale-rigging.
In this first installment, we examine the 7 most common antiques scams, with some tips on how to spot and avoid them. We'll follow up with part two in a couple of weeks.
And now for the main feature...
The 7 Most Common Antiques Scams and How to Avoid Them
In the first of a two-part review of antiques scams, we identify the 7 most common risks customers face when buying or selling old or collectible items.
In most cases, these antiques scams involve unscrupulous dealers or auctioneers but we want to stress that, although the risks are real and very significant, the vast majority of sellers are honest and reliable.
In this article, we spotlight the main areas where antiques scammers are at work, and we provide some tips on how to spot and avoid them.
Next time, we'll give you the 10 questions you should ask (both of yourself and the buyer/seller) to avoid falling for an antiques scam.
1. Reproductions sold as the real thing
This is probably the most common form of antiques scam, especially with furniture, paintings or musical instruments.
There's nothing wrong or illegal about copying, and plenty of people make an honest living from doing so. The crime is in passing off the result as an original.
There may be telltale signs, like evidence of use of electric tools or modern craft techniques or materials. However, experts are also at work, often using old wood from cheap antiques and applying the same methods as did the craftsmen of old. In some cases, it's virtually impossible to detect the difference.
Forgeries are referred to as "repros" (not "reproductions" which refers to items that are clearly identified as copies). Many of them originate in India or China.
Key actions: Buy only from reputable dealers or auction houses. Watch out for prices that are too good to be true. Have big-ticket items independently verified and appraised.
Don't buy valuable items sight-unseen without some agreement on approval or escrow. You can find more about online auctions on our site.
2. Forged autographs and phony Certificates of Authenticity
Although not strictly fitting the definition of "antiques," collectible items like autographs attract the same type of interest -- and the same level of scams.
Con artists may forge signatures and pass them off as the genuine item. Or they may use misleading wording like "George Washington signature" or "hand-signed Abraham Lincoln," implying it's an autograph but not specifically saying so.
Increasingly, unscrupulous sellers offer supposed Certificates of Authenticity that seem to vouch for the genuineness of the item -- not only autographs but also other collectibles and memorabilia. But these are often worthless, computer-generated documents. They don't prove anything.
Actions: Carefully check the wording of sales descriptions and the signature method (for example, felt-tip pens were only introduced in the 1960s). Be careful about accepting Certificates of Authenticity without other "provenance" (proof of an item's history).
3. Bidding rings and price fixing at auctions
Crooked dealers and auctioneers use two tricks to score a big profit at the public's expense.
First, a group of dishonest dealers agree not to bid against each other. Only one of them bids, and, if the auction is poorly attended, is likely to win the item at way below value.
The ring meets after the auction and one member may then buy the item for something approaching its real value. The difference -- the profit -- is split between the ring members.
In the second of this type of antiques scam, unscrupulous auctioneers plant shills (bogus customers) on the floor to artificially bid up the price. If the shill unintentionally wins the item, it is set aside by the auctioneer to be offered again at a different sale.
Key actions: Work with reputable auction houses and watch for suspicious behavior at under-attended sales. Note if the auctioneer keeps putting items to one side after selling -- evidence that a shill won the sale.
4. Under-valuation or low appraisal
Most people who know or suspect they have a valuable antique really have no precise idea of its true worth. They may find information online or in a price guide but only an expert dealer will know how much an item is likely to fetch if sold.
Anxious to make a juicy profit, a crooked dealer might undervalue the item, drawing attention to minor faults or by saying there's little or no demand for this particular category at the moment.
In other cases, where owners are not sure about the collectability of an item, a dealer might dismiss it as worthless or of low value.
In both cases, they would offer to take the piece off your hands for around their appraised value. Of course, they'll offer it for sale at a much higher price later.
Key actions: Never sell to a dealer you don't know or haven't checked out carefully unless you're sure of the value of your antique(s). If in doubt, get multiple appraisals. Check online for sales prices of similar items.
5. Consignment sales
This antiques scam is almost unknown. Here, a dealer offers to take one or more items on consignment and remit payment when they're sold.
Typically, this will be done with older people who are down-sizing their homes or where there's a divorce or other type of forced sale.
The risk here, if the dealer is dishonest, is either that you may not know how much an item really sold for or you may not even know it sold.
In the case of an elderly owner, if that person subsequently dies, relatives may not be aware that items from the estate have been consigned and a shady dealer won't bother to tell them.
Key actions: Keep a photographic record of any items sent for consignment sale and ensure others know about your actions. If possible, regularly visit the dealer to eye-check your stuff. If it sells, ask for proof of the sale price.
6. Stolen goods
Antiques theft is big business. And, in the age of the Internet, "fencing" (selling stolen goods) is easier than ever.
At the high end of the market, especially in the art or antiquities worlds, pieces may be stolen to order, disappearing into private collections, never to be seen again.
However, stolen items are sold at all levels of the price scale, and buying antiques from unknown or questionable sources is risky.
If an item turns out to be stolen, you have no legal right to keep it. It must be returned to the legal owner and you stand the loss, unless it can be recovered from the thief or other seller -- which, it has to be said, is highly unlikely.
Key actions: Beware of bargain prices. Ask for proof of ownership. If you have even the slightest suspicion an item may have been stolen, don't buy.
7. Bogus investment opportunities
As with all investment fraud, business scams in the antiques world usually involve the promise of a high and quick return.
In a recent case, for example, investors were offered an 18% return within 30 days for putting their money into a scheme to buy up huge lots from estate sales which would then be split up and sold individually for a big profit.
That was the theory. But the money simply disappeared or was used as part of a pyramid scheme to pay off earlier disgruntled investors.
Key actions: Check out the credentials of the person or firm running the investment. In the case above, the scheme organizer had a criminal record for similar scams.
If they don't have a track record or if the opportunity seems to offer an unbelievably high return, don't invest without some further corroborating evidence. Be sure to get professional financial advice.
In most cases, common sense is the main weapon for defeating antiques scams. Are the prices or the opportunity to make a fast and easy profit too good to be true? Does the dealer/auction house enjoy a good reputation?
As ever, in the never-ending battle to beat the scammers, it pays to do your homework -- both in terms of knowing the people you're dealing with and learning more about the items you are trying to buy or sell. You may never become an expert but even a little knowledge will stand you in good stead.
That's it for today, but we'll be back next week with another issue. See you then!