Quote:
Originally Posted by Cardboard Junkie
I am the one who could be naive. A man buys a card (graded) cracks it out then cleans, trims, colors, doctors, whatever to it then resubmits it (remaining silent) and it gets a higher grade....then he sells it for a big profit. Has he done anything illegal? Unethical perhaps, but I don't know what law he is breaking. Help me understand.
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David,
It is called fraud.
"Fraud must be proved by showing that the defendant's actions involved five separate elements: (1) a false statement of a material fact,(2) knowledge on the part of the defendant that the statement is untrue, (3) intent on the part of the defendant to deceive the alleged victim, (4) justifiable reliance by the alleged victim on the statement, and (5) injury to the alleged victim as a result." -
http://legal-dictionary.thefreedictionary.com/fraud
In the PSA agreement: "Customer represents and warrants that it has no knowledge and no reasonable basis to believe that any card submitted for grading has been altered in any way or is not genuine."
So if someone knowingly alters a card and submits it, they meet items 1 and 2. Let's say PSA doesn't catch it and slabs it as graded. If the submitter then sells the card, they have then met item 3, and assuming that the buyer is relying on the PSA grade (item 4 and the signed PSA agreement) and would not knowingly pay the same price for an altered card (item 5), the seller has now met all 5 criteria for fraud.
The extent of PSA's liability does not matter regarding the actions of the original submitter. The original submitter, without full disclosure to the buyer, could still be committing an act of fraud.
Maybe the lawyers could explain it a little better than I?