The Scams, Counterfeits, The Hidden Lies

“Fraud and deceit have been practiced since the beginning of history… Brass has been called gold: glass has been sold as diamonds; and poison has been hawked as excellent food. The story of fraud throughout the ages forms an ugly chapter of human history.” -John Andreas Widtsoe

Every person in the world has been a victim of some sort of fraud, deceit or theft. As a child, seeing ads selling a tank or a submarine on the back pages of comic books, turned out to be nothing more than a fancy box. I was 5 or 6 years old and I was devastated. I thought I was getting a tank. The reason I did not choose the submarine was that I was not living anywhere near the water.

Jewelry, this is where we have seen the greatest misrepresentation of what a piece of jewelry is and what its true value is. Plated gold jewelry marked with 10K or 14K, diamonds & gemstones of questionable quality and grading. We have even seen costume jewelry passed off as real jewelry. Any appraisal report issued by a jewelry store is not an accurate representation of what the fair market value is, but of what is the replacement cost of the piece for insurance purposes. (Please check your insurance coverage for jewelry, as many companies have a limit of what they will pay.) In many cases the true fair market value, if you wanted to sell the jewelry piece, might easily be 50% to 60% less than the stated replacement cost. The only way of knowing the true market value is through a gemological report by a gemologist who specializes in appraisals.

Watches, every known watch manufacturer has its counterfeits, even Seiko and Casio watches are targeted. There are sites everywhere that are selling used watches, and many look to be bargains. It’s a major buyer beware. In most cases you are buying online and not in person. Even in person, are you knowledgeable enough to even inspect the watch? How to determine, if it’s the real thing or a super fake, or one that has been repaired, and different watch parts used to make a working watch. Today’s super fake watches of high end models have all the packaging, boxes, holographic cards, invoices from large jewelry stores, etc… I’m not a fan of buying online, since you can not personally inspect the watch. It’s better to be able to examine the watch in person, and ideally at a jewelry store that sells the same watch company. Pay for the jeweler’s experience, if he is willing to look at the watch with the seller present. It’s better to pay for the advice & knowledge, than to lose potentially thousands on a worthless watch.

Silver & Gold coins & bars, are all targeted by counterfeiters. It is reported that many Asian sources are minting counterfeit coins, bars of both silver and gold. Many of these items are sold online, where it looks like it’s a good deal. I have personally seen 10 Oz gold bars properly melted at a gold assayer / refiner to reveal foreign metal exposed over the gold. If you wish to purchase Silver or gold contact Canada’s largest bullion dealer. “Kitco” www.kitco.com If you are interested in collectable coins, it’s best to deal with a reputable coin shop.

Purses, all high end brands of purses are copied, and sold to the unaware buyer. Spotting a counterfeit is hard, if the potential buyer has no previous experience with the maker. I have seen many counterfeit purses, where the buyer thought she was getting a great deal, only to find that it was a fake. Experience handling the real high end purses, visiting the manufacturer boutique, and talking to industry contacts helps to build the experience to determine if it’s real or not.

Fashion, shoes, & everything else is copied today. Dresses, jeans from high fashion houses, shoes, women accessories, belts, sunglasses, are all being copied. Many are sold at mall booths, flea markets, or even stores. Imagine seeing rows of fake Louis Vuitton handbags on a store shelf.

Electronics, mostly for vintage audio equipment, these units are not copied, but sometimes highly modified, or with questionable repairs are found in the marketplace. A common phase that is heard. “It was working the last time I plugged it in”. Or the photos show a nice unit online, only when received, the interior of the electronics were removed, and all you have received is the case. Or major components are removed. In those cases you would have very little recourse against the seller. It’s best to examine the item(s) in person, and see it working.

Exotic & Sport Cars & parts are copied. Have you ever heard of a “Chinese Ferrari”. Many of the high end popular car manufacturers have copies. As do the major car part makers. Parts like engines, alternators or body panels are copied and sold as an original equipment manufacturer (OEM) part.

The Victims, almost every adult Canadian has had the opportunity to purchase something that they knew was not an original. Then there are the Canadians who purchased an item thinking they got the bargain of their life. Only to find out later that they were misled, (insert your own wording as you feel appropriate) Many losing thousands of dollars in the process. There is no protection for the buyer. The due diligence is the responsibility of the buyer.

The Other Victims, namely the designers, manufacturers and their dealers. It can damage a company’s brand, revenue and even safety of the customers. They lose the sale of their product which in turn, creates limits and problems for the company, which can lead to unemployment for its workers. Some would say, what harm does it do if I buy a fake. If you know it’s a fake piece and are happy with your purchase, fine, no further comment. But if you bought a piece thinking it’s a real luxury item and paid a large sum of money for it, then there is a victim, who potentially lost a large amount of money. With no recourse, to be able to recover the funds. Counterfeit products are also a problem in industrial applications. Imagine, a corporate buyer buys bolts used on buses to secure the wheel assembly, thinking that its an original part, only to find it was a copy made from different material and not for use in a high vibration, speed and weight application. If an accident happens, lives are lost because of the counterfeit part. The implications are real and sadly, buyers are not doing their due diligence and investigating.

Canada’s Combating Counterfeit Products Act, Bill C-8 passed December 2014, with the goal of stopping counterfeit items from entering Canada. It is estimated that the world wide trade in counterfeit goods is around 397 Billion dollars. For many persons counterfeit goods are deceiving, robbing Canadians of their hard earned money.

Disclaimer

Prestige Evaluation Inc. does not engage in any buying or selling of any personal property. Prestige Evaluation Inc. can not do any verbal appraising without a work file and consultation. It’s important for the seller to do his or her own due diligence, before accepting an offer to purchase. Any company referred or named in this document, there is no financial consideration or relationship between Prestige Evaluation Inc. and or John Grow.

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About the Author

John H. Grow, ISA-AM, is a partner in the appraisal firm of Prestige Evaluation Inc. The firm specializes in antiquities, watches, clocks, jewelry, fine art, and collectables in general. John works with clients worldwide, museums, corporate, foundations, financial / Insurance firms and government agencies and on radio and television shows and charity appraisal fairs. A long time member of the International Society of Appraisers. (ISA) Prestige Evaluation Inc. can be found at http://prestigeevaluations.com and Grow’s email is [email protected].