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Art Fraud
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Facts for Consumers from the Federal Trade Commission
Art Fraud -- April 1994
Every year, American consumers lose hundreds of millions of
dollars purchasing supposedly valuable commodities that do not
live up to their billing. You should be aware that counterfeit
art prints are included in these items.
Among the most frequently counterfeited prints are ones
purportedly done by famous artists such as Salvador Dali, Pablo
Picasso, Marc Chagall, and Joan Mir_. Consumers from all walks
of life are targeted in these scams. Recent FTC cases indicate
that those buying counterfeit art work include doctors, farmers,
stockbrokers, housewives, and even other artists.
If you are taken in by a false art sales pitch, what you get is
often much less than promised. After paying anywhere from $500
to $10,000 or more, you may get art work valued at no more than
$50 _ the equivalent of a poster you might buy at a museum.
Many of these bogus pieces are copies of images created by
well-known artists, which are produced without the artist's
knowledge or authorization and carry a forged signature of the
artist's name. Others are counterfeit art pieces produced in
the style of well-known artists. In still other instances, the
art work is authentic but its value and investment potential are
far less than what you are led to believe.
How the Scam Works
The scenario for trapping consumers into paying inflated prices
for counterfeit art works varies. One common tactic is to send
you a letter describing a contest or drawing giving away a free
original lithograph by a famous artist. You are asked to return
the postcard with your name, address, and phone number. Your
post card probably will trigger a telephone call from the scam
operator, who tries to convince you to buy a valuable work of
art. The caller may claim to be offering a "fabulous
opportunity" to obtain a limited-edition print that will be an
"excellent investment." You may be told that a famous artist is
near death and that you should buy now, since the value of the
art work will increase after the artist's death. You will
likely be offered a "certificate of authenticity" attesting to
the genuineness of the work. And, often you are promised a
trial examination period with a 30-day money-back guarantee.
There are as many variations to this basic sales pitch as there
are con artists.
Fake art prints are not just sold over the telephone. They also
may be sold at seemingly reputable art galleries in your own
community. You may find authentic works by contemporary artists
hanging side by side with fake Dalis and Chagalls. Sometimes
the dealer will pitch the print as an investment opportunity.
The dealer also may downplay the investment angle and try to
sell the print as a valuable collectible.
How To Protect Yourself
Although there is no foolproof way to protect yourself if you
decide to invest in art, the following suggestions may be
helpful.
Get professional advice. Counterfeit prints are often so well
produced that few laypersons can tell the real thing from a
fake. Therefore, it is very important to consult a reputable
expert, such as an art appraiser or museum curator, before
finalizing the purchase of any artwork attributed to a
well-known artist. Ask the seller for specific information
about the piece, including the edition size, the print medium
(such as lithograph, etching, silkscreen, or woodcut), the year
of publication, and the printer/publisher _ all of which will
help an expert evaluate the work. Some states have disclosure
laws that require the dealer to give you such information. These
include Arkansas, California, Georgia, Hawaii, Illinois,
Maryland, Michigan, Minnesota, New York, Oregon, South Carolina,
and Wisconsin.
Tell the dealer you want the sale to be conditioned on an
appraisal of the piece by an expert of your choice. Make sure
that you have the right to get your money back in case the work
is found to be a fake. Be sure to read the fine print. Some
sales invoices only give you the right to exchange your print
for another and do not provide a money-back guarantee.
Be extremely careful about buying art work over the telephone.
It is very difficult for consumers to gauge the value and
authenticity of a work of art or the credentials of an art firm
by telephone. You may want to check with your local or state
consumer protection agencies, the Better Business Bureau, or
your state Attorney General to determine whether complaints have
been lodged against the company contacting you. Be aware,
however, that many fraudulent telemarketing companies frequently
change their names, so there may be no complaints registered
against them.
Be skeptical of authenticity claims. Art dealers often provide
"certificates of authenticity" or written appraisals with the
prints they sell to support their claims of authenticity. You
should be wary of any art dealer who refuses to put his
authenticity claims in writing. Keep in mind, however, that
such documents are only as reliable as the firm that backs them.
Don't be taken in by dealers who refer you to "art appraisers"
who are on the dealer's payroll.
Be suspicious of promises of great investment returns and
high-pressure sales tactics. Fraudulent offers often revolve
around the idea that, unless you act now, you will be passing up
a terrific investment opportunity. But remember _ no offer is
so good that it cannot wait for a cool professional examination.
Ask yourself: if this offer is so good, why is a total
stranger making the effort to sell me this investment?
Do not give out your credit card number over the phone or by
mail. Without your credit card number, salespeople have minimal
access to your money. They may say they need your card number
for "verification purposes" and not for payment. Be careful.
You risk big losses when you give your credit or charge card
numbers or other personal information (such as bank account
numbers) to unfamiliar salespeople who make unsolicited calls.
What to Do If You Have Problems
If you buy a work of art and discover that it is a fake, first
try to resolve your dispute with the company that sold you the
piece. If you are not satisfied, contact your local consumer
protection agency, Better Business Bureau, or state Attorney
General to report the company. You also can contact the National
Fraud Information Center at 1-800-876-7060 (9:00 am - 5:30 pm,
EST, Monday - Friday).
The Center will forward your complaint to the Federal Trade
Commission, Washington, D.C. 20580. Although the FTC generally
does not intervene in individual disputes, the information you
provide may help establish a pattern of law violations by a
company that could result in legal action by the FTC.
For More Information
For more information about telephone scams or other consumer
protection issues, contact: Public Reference, Federal Trade
Commission, Washington, DC 20580; 202-326-2222. Ask for a free
copy of Best Sellers.
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