I was leafing through an Entrepreneur magazine when I came across this page entitled special market opportunity from First Federal (1stfederalcoin.com). On it they make some pretty incredible claims about the investment grade coins that they sell. Especially the 2010 silver eagle dollar NGC MS 70 grade (MS 70 is the highest grade available and the most valuable).
In the ad they claim how rare the coins are and that they are in extreme limited supply and that they’re selling these graded coins for $149 each for the 2010′s. They also state that the current market price for these is $215 and that by buying them at $149 each you’re getting them at more than 40% off the current market price.
That right there caught my eye that it’s probably a scam because why would anyone sell something for less than it’s actually worth and especially with graded investment coins that could easily be sold for more money? That would be throwing money out the window. So I went on the Internet and did a little research and found out they were a little bit off, to say the least.
The current retail price turns out to actually be $80 for each of these coins. You can go on eBay and you can easily buy them for as low as $74. Yes, there are a few places like First Federal that almost double the price and then lie to you in their ads or websites and tell you that the coins have a much higher value than they currently do. So, First Federal is bad, but they’re not the worst as some are actually claiming these coins were worth upwards of $350 and selling them for $160 to $199 a piece.
It even has listed prices of previous MS 70 Silver Eagles they supposedly offered and sold, none of them are even close to being on the mark. You could buy far more valuable gold eagles, which are made of solid gold, for far less money than what they claim their silver eagles will be worth in the future or what they claim previous ones are worth now.
On eBay and elsewhere I can buy a 2009 silver eagle MS 70 NGC graded (you have to make sure it is reputably graded to carry the highest value and NGC is the most reputable grading company and therefore carries the highest value) for the same price as the 2010. I can get either one of them right now for about $70-$80. And that even includes free shipping so that tells me the wholesale price on these is somehwere between $40 and $50.
So, effectively, First Federal (1stfederalcoin.com) is buying these around $40 and reselling them for $149. That’s a pretty hefty markup, but that’s not illegal as long as they don’t lie about the retail prices and what things are worth. But that’s where they definitely fall into the category of fraud because they are intentionally misleading people by giving them false information and false hopes. They know that the current retail value of these coins is not what they state and not even close to it. If you bought one of these coins from them at $149 and try to sell it tomorrow it would be worth $70-$80. It would not be worth what they claim to be the current market price of $215.
That is an outright lie and it’s fraud in advertising. The whole ad is basically fraudulent advertising as it is loaded with misleading and wrongful claims. Someone should pass this on to the Federal Trade Commission (FTC.gov) or some attorneys because I see a ripe class action lawsuit here for ripping off consumers. They even claim in there that these coins are like finding a needle in a haystack and are very rare. If they were so rare why are there so many of them available for sale everywhere from eBay to your local coin stores? EBay alone has tons of them available to bid on every day.
It says in their ad specifically, “to call early and early orders get priority, so call immediately to avoid disappointment.” The truth here is if you call them and buy anything from them you will be disappointed and that’s guaranteed as you’ll be paying almost twice what they’re currently worth and these coins will not have the stratospheric values that they claim they could have in the near future. Their ad says they are a BBB accredited business – that should tell you something about the Better Business Bureau! First Federal (1stfederalcoin.com) is a ripoff and a definite fraud – be very wary of anything they sell and any of their claims.