Viewpoint 2009
Opinion, Commentary and News Numismatic

CAC Missing The Mark   [8.25.09]

In October 2007 a group of coin dealers headed by John Albanese launched Certified Acceptance Corporation (CAC), originally known as Collectors Acceptance Corporation. The basic premise was that in the 20+ years since PCGS and NGC were founded, the grading services' standards had both relaxed and varied to the point where the market has been flooded with coins that are substandard for the grade, dragging down the prices for properly graded coins.

In mid-March 2008, Maurice Rosen interviewed John Albanese for the May 2008 Rosen Numismatic Advisory Newsletter (Vol. 33 No. 4). In this interview, John stated his case for founding CAC:

"I felt we were basically in a death spiral. I saw the "C" coins dragging down the prices of "A" and "B" coins. Throughout my career I've always tried to buy the "A" and "B" coins. I felt that someone just had to push back. I felt strongly that the "A" and "B" coins needed to trade on their own, to be decoupled from the "C" coins. I felt the best way to accomplish that was to start CAC."

When CAC began operations in October 2007, I was highly skeptical of this new service. First, CAC's early and most vocal supporters failed to instill any confidence in me. Second, and more important, CAC's end mission was to provide a product suitable for sight-unseen electronic trading.

While the boiler room coin dealers desire a product that can be sold sight-unseen to unknowledgable investors by an "account executive" with all of 8 months on the job, efforts to better sight-unseen trading have no positive consequences for numismatic collectors. Since I'm a collector-oriented dealer, CAC just didn't seem to fit with what I do.

About a year later, in late 2008, I had a shift in my indifferent opinion regarding CAC, just as I sensed that the CAC cheerleaders had quieted down. After all, I have known John Albanese for a very long time. And while I believed that CAC had over promised, I knew that John's intentions were good.

Since that time, just about all of the coins that have made it to this website have been submitted to CAC, and nearly all have passed. Most of the coins that have sold before posting on this site have not been submitted, as I've simply had only one collector request the service. Nevertheless, I have supported John's efforts and made a point of keeping in regular contact so that we can compare notes on what we are seeing.

I have been told by a major dealer and CAC supporter that my grading disagreements are simply a matter of my "taste". But regardless of differences in taste, there would not be any doctored coins approved by CAC. That has not proved to be the case.

It's well known that CAC has had trouble with both colonials and early copper. In fact, I do not submit any colonials to them as I simply don't believe that they have enough expertise in that area. Additionally, I've seen the stray PCGS/CAC coin here and there that I certainly would not have "stickered". Again, maybe it's just my taste. However, this summer's auctions have included an increased number of CAC approved coins that were unquestionably doctored - added color or added film - with the highest concentrations within silver type.

In CAC's defense, all of those doctored coins were previously certified by PCGS or NGC, so they erred first. Yet, given that PCGS has had over 23 years to accumulate mistakes, CAC should not have so many problems in less than two. Additionally, collectors are paying significant premiums for CAC approved coins at auction, yet in some instances, are not getting what they're paying for.

Going forward, I'll continue to submit coins to CAC if only to differentiate myself from the charlatans who either don't know the difference between good and bad, or choose not to know. I'll also continue to participate in any discussions that could improve CAC, and provide a safer coin market for collectors.

However, it's important for collectors to know that the coin doctor problem has not gone away, and the market is not any more safe than it was pre-CAC. In fact, if CAC gives buyers another reason to let their guard down, it could be even worse.