Wednesday, 28 March 2012

Mail order scams: Collectible coins

I found myself the recipient (though thankfully not sucker) of what I considered to be a mail order scam. While the situation outlined below may not be illegal I consider it to be unethical and have given it the title 'scam' for that reason.

I received a letter in the mail from 'Macquarie Mint' (see their website) offering me the chance to buy a $10 coin for only $10 which celebrated all Australian soldiers and the sacrifices they had made for Australia. When I first glanced at it - it seemed like a great deal - I had collected coins when I was younger and I knew that when you buy coins from a mint they are almost always at a premium to the face value. Then I realised that I'd never actually heard of the 'Macquarie Mint'. There are only 2 mints in Australia that are allowed to produce legal tender - the Royal Australian Mint and the Perth Mint so I was immediately suspicious.

I looked at the offer document more carefully and realised that it had many of the classic signs of a scam:
  • Created the illusion of scarcity: 'Only 150,000 would be available to households with only one per household sold'

  • Incorporated information that, while not false, gives the wrong impression: The document had a graph of the silver price over the last few years and said that the coin was silver. On the website as at 28 March 2012 it provides that the coin is 10g of '50% fine silver'. This implies a silver content of 5g (0.176369oz). At the silver price on 28 March 2012 of US$32.57oz (A$31.173/oz) this implies an intrinsic value of the coin of ~$5.50. On silver content this is therefore a terrible investment so putting a graph of the silver price is a moot point.

  • Put the relevant information in tiny font while emphasising the useless: Macquarie mint says that the coin they are producing is legal tender in Kiribati. I admit that I had never heard of Kiribati so decided to look them up - apparently it is a small pacific island which uses the Australian dollar as their currency. So either a) they are lying about it being official currency because the AUD is their currency or they have done some deal with the government or Kiribati to send a commission per coin back to them. You may think that this means it isn't really a 'scam' because they disclose this fact. I would argue that given it has Australian soldiers on the coin that this is a point advertised much more loudly than the fact that it is from Kiribati that it is very misleading and designed to dupe people. Actually there is a larger argument around the official legal tender point.

  • If this is in fact legal tender in Kiribati and the Kiribati dollar is tied to the Australian dollar on a parity basis then there is the potential to make money by waiting for the 'exchange period' to end (see below) buy the coin for the silver content (A$5.50 - see above) and then exchange it in Kiribati for Australian dollars. While this is theoretically possible, it is premised on the fact that this coin is actually official legal tender and the Kiribati government will continue to recognise it as such past the redemption date.

  • The coin is 'worth A$10': I was actually wondering how they could support this particular claim as 'collectible' coins like this rarely ever are 'worth' what they are sold for. In fact they came up with a rather ingenious solution: 'Macqurie Mint' will buy the coin back off you (as long as you have the receipt) for $10 for the next 3 years. After this point the coin is (presumably) worth nothing more than it's silver content as I tried having a look but couldn't find a great market for Kiribati coin collectors.
Ok there are several more points that I would like to cover but I'll leave them for another time. The basic premise of this post is that this 'deal' is misleading to prospective purchasers and therefore I consider it a scam. I decided to try and find out who was behind it (not expecting much luck) but I was pleasantly surprised:
  • On the Macquarie Mint website their ABN (Australian Business Number) was: 46 097 060 663. If you go to the ABR website you can look this company up: It comes up as Downie's Coins Pty Ltd trading as Downie's & Sherwood
  • Further if you do a whois domain search on Macquarie mint the you (strangely enough) come up with exactly the same result.
  • Downies Coins is a coin dealer with several offices around Australia ( and surprise surprise the head office is in the same suburb (Abbotsford) as the return envelope address for Macquarie Mint
  • I also went into the Downie's coin dealer closest to me and asked about the coin and the man behind the counter somewhat reluctantly admitted that Macquarie Mint was a 'sister company to Downie's but operated only as a mail order business'
Anyway this whole thing smelled fishy to me so I reported it to the ACCC's scamwatch. They probably wont do anything about it given the loss per person is relatively low and the offer letter is worded in such a way that it is correct and legal (although misleading and in my opinion unethical). If you would like to object too please report it to scamwatch and hopefully something will be done.

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  1. I got this one too. I also think if it's not legally a scam it certainly comes very close.

    One of the other points that really annoyed me was that it said "official commemorative coin". It also included a Coat of Arms (certainly not the Australian one, nor the Kiribati one) and claims to be about remembering the soldiers.

    I think these factors combine to give the impression that this is somehow linked with the Australian Government ("official" plus the use of a Coat of Arms) and perhaps even go so far as suggesting that money from this will actually somehow support soldiers.

    They of course don't make this claim explicitly, as that would be untrue. But the look and feel of the material certainly seems to suggest it.

    1. Agreed re the coat of arms. It also was sufficiently close to the Australian coat of arms so that anyone not looking at it carefully would be mistaken.

  2. silver is weighed in troy ounces. 1 ounce of silver weighs 31.10g not 28.35 g.

    1. You are absolutely right. And that actually strengthens my argument (because there is less silver than I originally calculated)

      The calcuation changes to
      5g of silver = 0.160753 troy ounces
      x 31.173 (the silver price as at the date of posting)
      = $5.01 pre coin (not 5.50)

  3. Just thought I might add that the Macquarie Mint 2011 "We Will Remember Them" coin was "coined" as legal tender in Nauru - a nation that also uses the AUD as official currency...

  4. Thanks for this article. I was minutes away getting it for my daughter who is a novice coin collector.

  5. The coin has reappeared, I just received a letter trying to flog the 2013 coin and also thought it all seemed a bit fishy. On the card inside the envelope showing the front and back of the coin, the coat of arms is covered, also the return address is now Nunawading, Victoria.

  6. I'm happy people are getting value out of this post. I notice a spike in views every time they do a mass mail out.

  7. Whenever I get these, I send the replied-paid envelope back to them with "Sod off scammers" written in it. They have to pay for every reply-paid which is sent.

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  10. I was very disappointed to realise that the folder I received had two vacant coin areas and brochures to purchase two more coins, one at a cost of $199.
    This was not explained or shown in the pictures on original advertising material or on the net, in fact the folder is shown folded over with the two coins I purchased showing, with no mention of further purchases to complete the card. I purchased this as as an inexpensive gift for my son who was once in the army. I feel this is false advertising and am not happy at all. I rang and was told I could send back for a refund (postage at my expense), the point is that I did not get what I thought I was getting and feel cheated and conned.

  11. I have just been saved from falling victim to this, by the fact that the Macquarie Mint website defaulted to an error screen when I tried to complete the order. I feel like an idiot now that I have seen all the information out there, but like someone above, I thought it would be a nice little starter coin for my child.
    Unfortunately, I am fairly certain that I have now supplied this company with my details, as the checkout screen puts up a message stating that your isp address has been recorded. So annoying, because I am not as naive with scams as this company has made me look!

  12. I have just received a 2016 "Simpson & his donkey" offer with the Queen's head on it. It sure looks like legal tender. The ACCC should stop this misleading scam. It states "No Risk! Exchange $10 for $10". If $10 is not equal $10 in the same currency then that is a deliberate misleading statement.

  13. I have just received an offer for the 2016 "Simpson & his donkey". It shows the Queen's head and sure looks like legal tender. The offer states "No Risk $10 for $10". If $10 is not equal $10 in the same currency then this is a scam and the ACCC should stop it.