Coin purchases don’t live up to claims
April 27, 2012 6:56PM
Updated: May 30, 2012 8:09AM
D ear Mr. Berko: During the past 25 years, I purchased more than $47,000 in collectible silver coins and beautiful non-silver coins from the Franklin Mint for my retirement because I thought the scarcity and limited-edition minting of these coins would drive up their value over the years and because I believed the silver content in the silver coins would also increase in value. Now I’m 64 and decided to sell these coins to a coin dealer who offered me $2,500 for the whole lot. He told me most of the coins were worthless, and the only coins that had any value were those with silver in them. I was devastated because when I was buying all those coins, the people at the Franklin Mint told me these coins were minted in limited production and would be more valuable to collectors in the future. I called two coin dealers in Detroit (these coins are too bulky to carry around) and both said they had no interest in Franklin Mint coins and said they don’t know any dealers who would buy them from me. My son told me to write you because he said you might know of buyers for them, and at this point I’d be very happy to get at least half of what I paid for them if possible. Please help me if you can. And if you cannot help me, do you think I can sue the Franklin Mint and recover my cost? And could you recommend a lawyer for me to sue them?
Dear DA: Certainly, you can sue the Franklin Mint. Frankly, it’s their fault you purchased those coins, it’s their fault you overpaid for the coins, it’s their fault the coins did not increase in value and it’s their fault the coin dealer in Troy won’t give you $47,000 for your collection or the dealer in Detroit doesn’t know a soul who would pay you at least $23,500 for your collection. And because it’s the Franklin Mint’s fault, I can’t help you recover your costs. But some lawyers will do their best to get you a settlement, demanding an advance fee before they pick up a pen. However, that settlement will probably be a 20 percent discount on your next Franklin Mint purchase and no shipping charges. But any attorney I know will tell you that you don’t have a chance in China for recovery.
In 1984, I purchased a die-cast, 1935 Mercedes Benz 500K Roadster from the Franklin Mint and sent them a check for $150. Although it was “to scale, “ it was made in China, poorly and cheaply constructed; parts and pieces would fall off, and when the Mint wouldn’t return my money, I tossed the Benz in the garbage. They also make limited edition plates, knives for collectors, figurines, Star Trek plaques and other ridiculous collectibles. One of the Mint’s biggest coups a dozen years ago was the sale of millions of dollars of collectible plates, jewelry and dolls with the image and likeness of Diana, Princess of Wales. Today, that stuff isn’t worth a penny, shilling or pound. You gotta be careful out there.
You overpaid for those coins by orders of magnitude. And you probably paid five or six times the value of the silver content for the silver coins you purchased. So while sliver has tripled in price since 1984, the silver value of those coins is still way less than your cost. I don’t know of a single item produced by the Franklin Mint that can be sold today for its original cost. The Franklin Mint, like the Danbury Mint, the Washington Mint and others with grand-sounding names are selling organizations that place full-page, impressive and official-looking advertisements in local papers with high-sounding words that give the impression of U.S. government affiliation. (It’s disappointing that some newspapers accept those advertisements because the acceptance gives instant credibility to those claims.) The advertisements always are carefully prepared with clever buzzwords designed to infer great value and urgency but grossly misleading to most readers who lack the knowledge to make an intelligent buying decision.
DA, you’ve been snookered, and there’s no chance for recovery. However, I suggest that you separate the silver content coins from the hundreds of medallions and other junk coins and visit the coin dealers once again. But be mindful that most of those dealers will try to swindle you. They recognize you’ve been swindled before (they know this is Franklin Mint stuff) so they figure you are an easy mark. You may have to wear out a lot of shoe leather till you find a dealer who is willing to give you a fair shake. Then try to sell the worthless coins on eBay, and you might get 100 bucks.
Address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at firstname.lastname@example.org.