The responsibility of a grading service in the event of a "mechanical error"?

[MarkFeld]

TDN, I'm with you all the way but what is the "very clear" remedy, under THESE circumstances?

 

 

Truth, I don't know if the estate of the seller has the $ or if the consignor/sleazeball owner has been paid.

[Tradedollarnut]

Mark: Your claim is against the seller and only the seller. The seller's claim is against the consignor. The consignor's claim is against the submittor [assuming they are not the same]. The submittor has no claim - he just has to live with himself!

 

That's just my opinion of the legal aspects.... but, as I stated earlier, to foster goodwill and maintain respect for their holder the grading company should become involved in getting it resolved to your satisfaction - up to and including taking action against the submittor for failing to abide by the terms of the submission agreement.

 

Edited to add: You may have a claim against the grading company for taking the FB designation away prior to this all getting resolved!

[MarkFeld]

Mark: Your claim is against the seller and only the seller. The seller's claim is against the consignor. The consignor's claim is against the submittor [assuming they are not the same]. The submittor has no claim - he just has to live with himself!

 

That's just my opinion of the legal aspects.... but, as I stated earlier, to foster goodwill and maintain respect for their holder the grading company should become involved in getting it resolved to your satisfaction - up to and including taking action against the submittor for failing to abide by the terms of the submission agreement.

 

TDN, I would agree with you that my legal claim would be only against the seller, if not for the fact that: the grading company had me send their mislabeled coin to them and corrected/changed it, then returned it to me. They thereby, have possibly precluded me from getting my money back from the seller or the owner.

 

If I am unable to get the credit card charge reversed, I believe that the grading company should reimburse me and take it up with the owner of the coin, who clearly violated his member/dealer agreement, at the very least.

 

I will post an update to this thread, at such time as I learn whether my credit card company reverses the charge or not.

[Tradedollarnut]

the grading company had me send their mislabeled coin to them and corrected/changed it, then returned it to me.

 

I posted my response prior to you posting the coin had been reholdered. Did the grading company request you send it in and then send it back to you in a different holder? You bet you have a claim against them, but for that reason - not because of the mechanical error, but because they took away your power to receive a refund. Now all the seller has to claim is that it's not the same coin.

 

It's not really about holding them to their original mistake - that's covered by the submission agreement [despite assertions to the contrary]. What it's really about now is them breaking the chain of evidence!

[jtryka]

The grading guarantee is now worthless in my eyes, and in every case where the wrong grade was assigned, either the buyer or seller should pay. You want to look at it like a judge, well fine, but remember, a judge also has to worry about setting precedent, and the precedent here is that the grading company is never responsible since it can always rest on the "obvious error" defense. Every mistake, whether grading, designation or otherwise, is obvious to someone, so therefore there is no error other than a mechanical error exempt from the guarantee. In this case, the buyers or sellers must go after each other, if the coin gets downgraded and you sold it to me, I go after you for the difference, if it gets upgraded, then the seller must have every right to pursue the buyer for the obvious fraud of cherry picking. The market for coins now grinds to a halt, as buyers and sellers are afraid of the legal liability. Now which of you as judge sets this precedent?

 

Who was the grading company? Never mind, I think I'll just stop dealing with all of them as well as all dealers and collectors. Everyone is a lying scumbag now.

[Wihlborg]

This seems like a no brainer to me. Someone sends a coin into a grading company and pays them for a professional evaluation of the coin. The grading company puts the coin in one of their holders with a label stating what their evaluation of the coin is, but they make a mistake and give the coin a designation it does not have. The grading company than sends the coin back to the owner, who could in all honesty not know if the coin is deserving of the designation or not.

 

At some point the owner sells the coin and the new owner realizes that the coin in fact does not have the designation printed on the grading company’s label. Who is in the wrong here? Certainly not the new owner. IMO not the original owner, after all he paid to have the coin professionally graded and expected that the professionals would know what they are doing.

 

IMO a grading company is responsible for any mistakes printed on their label. Unfortunately not everyone who buys a coin knows how to grade a coin or how to tell if a coin really possesses a designation or not. That is why the grading companies are in business.

 

Ultimately the grading company should be responsible for ANY mistakes they make. This is like when you buy a house and you pay to get an inspection. If the person you hire to do the inspection tells you there are no problems with the house and two weeks after you move in it falls apart due to termites, whom do you blame? The person you bought the house from might honestly not have known that the house had termites, but the professional you hired to inspect it was definitely negligent.

 

John

 

 

[Elcontador]

I agree with TDN. A knowledgeable person can conclude that the seller had intent to defraud the buyer, so Mark's claim is first

against the estate of the seller. However, the fact that the grading service screwed up something as obvious as a FB designation

may be considered as "gross negligence." As a C.P.A., in lawsuits against my colleagues, gross negligence is treated in a very

similar manner as fraud, given the professional expertise and due dilligence which is expected in my profession.

 

While I am not a lawyer, I would think the grading service would be held to a similar standard in this case, and therefore, Mark

could also have a claim against the grading service as well, holding them to be jointly and severally liable.

[Tradedollarnut]

Sometimes a banana is just a banana. Sometimes a designation is an opinion, sometimes it's an obvious error. If the opinion of the grade/designation is wrong, it's covered by the grade guarantee. If it's an obvious error, it's not. It's the submittor's responsibility to point out obvious errors and not profit from them!

 

As for the poor buyer who did nothing wrong - DON'T BUY COINS SIGHT UNSEEN!

 

Edited to add: Gross Negligence - a good aspect that is completely different than the grade guaranty - good one, Elcontador.

[bigd5]

I think your credit card co. will take care of the charges for you.

TDN made some very insightful comments.

I would assume NGC could figure out who the original submittor of the coin was from the cert.#, and contact him/her/them and let them know that they are about to enter some hot water because of their failure to return a coin with an obvious, blatant, mistaken designation on that submitted coin.

As for the consignor/seller? Are we sure they knew anything about coins? They may have been selling something they weren't in full comprehension of. Doubtful, but a possibility.

 

That original submittor/sleazeball is nothing but a.....well.........a sleazeball.

[IrishMike]

Designations are a matter of someone's opinion, the grading companies opinion. It is their standard what constitutes a full band, not yours, not mine etc. Grading companies were started to facilitate the sell of coins on a sight unseen basis. In their opinion, it was a FSB coin, regardless of mechanical error or otherwise. The right thing to do is to stand behind that guarantee and how can they prove in a court of law that it was a mechanical error?

[Wihlborg]

If the opinion of the grade/designation is wrong, it's covered by the grade guarantee. If it's an obvious error, it's not.

 

Who decides if a designation is an opinion or obvious error? If it is left to the grading company all their mistakes could be 'obvious errors'.

 

When you send a coin in to be graded you are paying for a professional evaluation of the coin. Supposedly the coin is seen by more than one grader, than goes on to be finalized where everything is supposed to be checked for accuracy before the coin is sent back to the submitter. If this is true than at least three people have looked at the coin and IMO if a wrong designation gets past three people who are being paid to evaluate if the coin has a designation or not this is negligence and the company should take the hit.

 

John

 

[braddick]

When the dust settles and the finger pointing stops, NGC is ultimately responsible. It may not be fair, but had it not been for their error none of this debacle would have taken place. Pure and simple.

NGC/PCGS wake up. Get that Finalizer (you know, the one we pay for via our submissions) to do his job.

[MarkFeld]

Braddick and others - for the record, NGC is NOT the grading company in this instance. I had used them in my original "hypothetical" but had mentioned that the name of the grading company had been changed to protect the innocent (or guilty).

[Tradedollarnut]

I wonder what NGC's policy on the matter is? Similar? Or different?

[gmarguli]

A few things here:

 

• There has been lots of talk about the words written on the back of the submission form placing blame on the submitter for the grading company's mistakes. I want to see a court agree that the professional business should not be responsible for their mistakes and the amateur customer should be. Until I see a court agree with this, then I will hold the grading companies 100% responsible. If they did their jobs, then the customers wouldn't have the opportunity to take advantage of these mistakes.
   
  
• You should NOT have sent it to the grading company. You had no right to alter the item purchased if you wanted to return it. At this point I believe you let the owner of the coin off the hook. You took away his insurance policy. You had no right to do that.
   
  
• Don't bother with the seller/owner. Go after the easy money. Go after the grading company.
   
  
• You need to be made "whole" again. Go after the grading company. It was their mistake that caused this mess. Who from, if anyone, they get their compensation is not of concern to you. Make it clear that you purchased the coin sight-unseen because of their guarantee. Make it clear the cost of not standing behind their guarantee.
   
  
• Honestly, I'd send the grading company a letter like this:
   
  I purchased this coin sight-unseen based on your guarantee. I am out $5,000. I need to be made whole again. I own this coin and therefore my insurance policy is with you, the grading company. While you might have a claim against others and it is your right to go after them to recoup your money, I have an insurance policy with you. I wish to file a claim for the $5,000. Since you have already agreed that this coin did not deserve the original grade, please expedite the payment of my claim.
   
  While you claim this is a mechanical error, without debating the merits of that argument, the facts are clear. I purchased the coin because of your guarantee. The so-called mechanical error is not my problem. I need to be made whole again.
   
  Please send the check to.....
  

That's it. If they don't pay up, then consider getting more drastic. Take out an "Open Letter" to the company in Numismatic News and the CDN/CCDN asking the company president why they don't back their guarantee and how the customer can have confidence in them if they skirt their responsibilities. That will send a message. They didn't want to pay $5,000, so this cost them exponentially more. Hit back and hit back harder. I know for a fact these "Open Letters" can get a company's attention really fast.

 

A few more things:

• The sending the coin back to you by the grading company after they fixed their mistake sounds like a story about ACG I heard. A dealer sends a counterfeit ACG slabbed coin to ACG to compensated for their mistake. They remove the coin from the slab and send it back. No compensation. At least that is the story I've heard. No idea if it is true.
   
  
• Is it fair to stick PayPal with the $5,000 loss for your mistake in judgement? If the credit card company reverses the charge, PayPal will likely have to eat the loss. Is that fair? BTW, they will close your PayPal account for this.
  

 

[truthteller]

Excellent opinions. Bottom line for me: if the grading service removed the designation, they must pay. If the designation is determined to be part of the grade, again, the grading service must pay the difference as according to their submission policy. If the grading service defines it as a mechanical error, they may be in the 'right' in accordance with their own stated policy, but the should compensate for the loss of value. I have a feeling NGC would definitely pay you, but PCGS would fight, so would Anacs.

 

TRUTH

[gmarguli]

Braddick and others - for the record, NGC is NOT the grading company in this instance. I had used them in my original "hypothetical" but had mentioned that the name of the grading company had been changed to protect the innocent (or guilty).

 

Mark: You're obviously talking to the wrong people at PCGS. Call David Hall. He'll take care of you. He's a good guy with the best interests of you, the customer, in mind. Didn't you used to work for him? He's a swell guy. I'm sure you know this. He'll make you whole. I remember him posting that PCGS will take care of their mistakes. He also likes you. Please post back as soon as you talk to him. I can't wait to hear the "splendid" news that I am sure is coming.

 

BTW, if you have any pictures of the coin with the FB designation (they're off the auction if they were ever listed) and after PCGS got thru screwing you...er... removing the designation, I'd love to have them for my web site.

 

 

[TomB]

I'll stick by my initial reply, and what I have written in every post since then, that the grading company should pay out to the injured party and then the grading company should go after the initial submittor.

 

Also, Mark, please list the name of the grading company here since more than one member has incorrectly read and/or assumed that the company is NGC and, until you state otherwise, I am certain others will make similar mistakes. I realize you stated it wasn't NGC, however, that is the name of the service that will stick in everyone's memory. So, who was it?

[truthteller]

Mark,

 

Any update???

 

TRUTH

[gmarguli]

Come on Mark, give us an update. Did PCGS stand behind their product and pay up as they should under their guarantee or did they weasel out of paying and prove that their guarantee is a sham and worthless.

[Tradedollarnut]

Or is he using reverse - reverse psychology and implying it's PCGS so that the actions get bashed to no end when in reality it's NGC and he wants to apply pressure in a round about manner?

[coinman1794]

Or is he using reverse - reverse psychology and implying it's PCGS so that the actions get bashed to no end when in reality it's NGC and he wants to apply pressure in a round about manner?

 

It may be that he's using triple reverse psychology and only making us believe that he is trying to apply presure in a round about way, when, in fact, he realy is implying that it was PCGS !

[MarkFeld]

I am still waiting to find out if my credit card company will reverse the Paypal charge - I hope to know the outcome, later this week or next week. I promise to post an update to this thread as I learn more.

 

PS - it's a quadruple reverse psychology strategy that I'm employing and it works so well that I have thoroughly confused myself. On second thought, it doesn't take much to accomplish that!

[gmarguli]

Or is he using reverse - reverse psychology and implying it's PCGS so that the actions get bashed to no end when in reality it's NGC and he wants to apply pressure in a round about manner?

 

I'm assuming the coin is a PCGS coin that Mark purchased on eBay a few months back. That is unless there are more than one seller out there of a 1945-P MS65FB 10¢ where the original owner died and someone else sold it for them...

 

The only odd thing about this transaction is that Mark seems to have left positive feedback for them.

 

I honestly don't care what grading service slabbed this coin. You either honor your guarantee without screwing around trying to play games using semantics in order not to pay, or you lose the faith of the customer and your guarantee is meaningless and therefore your product is meaningless. Would anyone buy an insurance policy from a company that played games like this?

[gmarguli]

I am still waiting to find out if my credit card company will reverse the Paypal charge - I hope to know the outcome, later this week or next week. I promise to post an update to this thread as I learn more.

 

The PayPal reversal doesn't matter. Is PCGS going to honor their guarantee or not? Is the published PCGS guarantee just a bunch of lies or is it really how the business conducts itself. If it is the first, then the public needs to know this and quite honestly, maybe the FTC should start an investigation into them. If it is the second, then they need to be smacked publicly for screwing around and trying to screw you.

 

Is it fair to let PCGS off the hook if you are able to screw over PayPal and get the charge reversed? Gee, I didn't buy the right auto insurance and it really sucks that my car stereo got stolen. However, I'm really thankful I was able to steal a car stereo from someone else to make myself whole again. All is well in the world....

[Leothelion]

After spending an hour or so reading I have realized that I haven't posted to this thread yet. Is this a hyperthetical question? Let me say someone has posted in the Numisaddict forum about not being helped by PCG$ (if he has contacted them) when PCG$ removed the MS69 grades in their pop report for the mechanical errors (er, grade errors) of

the 1997 SMS Jefferson nickels. I suggested that he call them and let them know of the mistake.

On the topic, who is responsible? Whether a true instance or not, like it never has happened, perhaps someone can ask the question to NGC or ANACS?

The last time I sent coins into PCG$, most came back with several mechanical errors, they were missing the FS designations.

 

Leo

[Tradedollarnut]

I didn't know that it was confirmed who slabbed the coin.

 

IMO, it was a mechanical error - however, as soon as PCGS removed the coin from the holder, they "bought it". Trying not to fulfill that obligation will result in more bad publicity than it's worth!

[gmarguli]

IMO, it was a mechanical error - however, as soon as PCGS removed the coin from the holder, they "bought it". Trying not to fulfill that obligation will result in more bad publicity than it's worth!

 

Even if we all accept it was a mechanical error (which I don't, but for purposes of this, I will). A person purchased this coin because of the grade (MS65FB) and the guarantee of the grading company. This error caused a customer to get harmed. The grading company is 100% responsible for this error. They made the error. Sure, the original submitter may have known it was an error, but that doesn't allow the company that made the error to pass on their mistake to a future customer.

 

The grading company needs to stand behind its product and pay to make the customer whole again. They can go after the original submitter if they feel it is in their best interest. To absolutely take away every available recourse from the owner and basically say "SCREW YOU!!!" isn't right.

 

It's a very slippery slope here. You submit a coin that is an MS65FB. It grades MS65 (no FB) because they are a tight grading company and you can re$ubmit it if you want the proper grade. It's not a mechanical error. However, another coin grades MS65FB and it should have graded MS65 (No FB) and it's a mechanical error. Sounds like a scam to me!

 

If I were Mark, I'd tell my story to every single dealer/collector I came into contact with at this coming Long Beach. Make PCGS pay 100 times over for thier refusal to honor their guarantee. Hit them. Hit them hard. Hit them below the belt. Then stomp on their throat when they are down. Fair is fair.

 

[braddick]

This would all be solved if they paid the "Finalizer" $250,000.00 a year BUT deducted the cost of each coin- like this one- from his paycheck that PCGS has to buy back.

 

Problem solved.

[TomB]

Pat might have the best suggestion out there to solve this type of thing. Really, I mean it.

 

As an aside, wasn't third-party certification started so that coins could be sold sight-unseen? In that case, you are relying nearly entirely on the holder's information. Of course, if the coin remained sight-unseen then no one would ever know!