Rampant fraud appears to be afoot in the collectibles market.  But first, some important background information: Collectors Universe (CU) is the parent company of Professional Coin Grading Service (PCGS) as well as Professional Sports Authenticator (PSA).  The latter subsidiary, PSA, is a branch of Collectors Universe that authenticates and grades sports trading cards and memorabilia and helps set prices in the sports memorabilia industry — in much the same way that PCGS authenticates and grades coins and helps set prices in the numismatic industry.  This parent company, and its subsidiaries, have been considered the industry leader in authenticating and grading collectibles for several decades.

Over the years, I have become aware of issues at PCGS as I’ve come across more and more examples questionably graded coins – results which I found hard to believe or trust.  And as the years have passed, I have slowly lost confidence in PCGS’s ability or desire to property authenticate and grade coins. 

In July 2019, I read an article in the Washington Post newspaper about how the FBI was getting involved investigating fraud relating to baseball card collector’s suspected rampant fraud in their hobby.  Federal officials are questioning whether hundreds of sports cards, worth millions of dollars, may have been improperly altered by card “doctors” and then improperly graded by PSA, to inflate their value. 

Read Newspaper Article

Soon after this article appeared in the newspaper, a thread on this topic was started on the PSA Forum (a part of the Collectors Universe (CU) Forum).

See Forum Thread

One of the replies (posts) to that thread (from a forum member named Season6, responding to an earlier post from an employee of PSA named AFLfan) eloquently captured my feelings about Collectors Universe and more specifically about PCGS.  In my opinion, the entirety of this collector’s comments on PSA could easily be applied to PCGS.

AFLfan, I feel compelled to comment on your replies. I understand you work for PSA and you are required to respond and defend PSA and its actions, or compelled to do so out of loyalty. I get that. But look at this situation from a complete hobbyists perspective and not a corporate one, and certainly not a wishful thinking one.

PSA’s role in the hobby is to provide assurance. People buy, people sell, and PSA sits in the middle and provides assurance to the buyer that what they think they are purchasing is, in fact, what they are purchasing. I’ve been in the assurance industry for 25 years. If I (or PSA) cannot accurately identify right from wrong, legitimate from illegitimate, altered from unaltered, then my (or PSA’s) opinion is of absolutely no value. And even if I (or PSA) can’t identify those things 5% of the time, my (or PSA’s) opinion still has no value, because those error rates cause doubt about all conclusions of all opinions. This is the fundamental problem that PSA is facing right now. There are a whole heap of altered cards out there in PSA slabs. Which means PSA failed in its role.

You note that “Steve Sloan and PSA have been working on this situation since it first came to light.” Working on this situation? Unless you are working on a time machine to go back and shore up your processes to avoid this mess in the first place, I’m not sure what this statement means other than empty deflection of criticism. It’s not about what you are doing now or even if you make efforts to make collectors whole (although I’m sure the hobby would greatly appreciate that). The fundamental question is whether PSA provides value in the hobby if their processes can allow these mistakes in the first place (que outrage from the apologists). And I’m not currently sure how you can answer that question sufficiently. Of course everyone will have their own opinion on this matter, and their seem to be numerous big collectors who will support you either way, possibly because realizing/accepting your limitations would invalidate their own expensive collections built on the whole concept of PSA’s value/premium…an unpalatable thought to be sure, so these people will keep the faith either way.

You say that “there is likely no one that regularly participates on this forum that knows all of the details of the situation.” What do we need to know other than the fact that there are all sorts of high profile altered cards in PSA slabs that PSA didn’t identify? Is there anything else to know? Please, allay my concerns because this doesn’t seem particularly complicated to me (PSA’s role).

Your post also says “Please allow those that do have that information to do their jobs.” First, no one is preventing anyone from doing their jobs. Chatter from collectors doesn’t interfere with anything, so that statement is inappropriate and, again, seems overly defensive. Second of all, do you, or PSA, seriously believe you deserve the benefit of the doubt in this situation? Let’s clearly understand PSA’s role in this situation. PSA is the assurance provider in the industry. PSA failed to identify a large number of high profile cards which were altered, and you’ve put your (incorrect) stamp of approval on these cards. That was PSA’s role. And PSA failed in that role. Period. There’s no other way to look at this situation. I find it concerning (although not surprising) that PSA’s communications seem to want to angle or frame the situation as if they are an innocent bystander that is trying to add value and help the hobby. The reality is PSA has already failed, and if their value to the hobby isn’t being seriously questioned by collectors, those collectors don’t understand assurance, or don’t want to. Arthur Andersen made mistakes and disappeared very quickly. At one point they were the most respected name in their business. They made mistakes, lost trust, and were gone (an oversimplification, I understand, with many dissimilarities).

So I’ll say as respectfully as I can, I appreciate your role in this and understand some of its complexity. I understand PSA’s role in the hobby and hope it can somehow reclaim and restore trust. But the reality is, I don’t see PSA’s role in this situation as particularly complicated. I find the silence concerning. Doubt is dangerous in assurance. It is worse than dangerous. And right now, all I currently have is doubt about PSA’s role in the hobby, given this situation.

Yes this is my first post. I have collected for decades and keep my collection private for my own reasons. Those facts don’t invalidate my concerns or opinions.   – Season6

I am not sure if this problem is repairable or not at this point, but it is hoped by this collector that PSA, PCGS, and Collectors Universe starts to focus their attention on mitigating these past mistakes and improving their standards & methods moving forward.  The need to solve this crisis in confidence is becoming dire.

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