PSA Card Guarantee
 

As has been noted in the thread about Blowout's latest revelation, what Blowout has brought to light represents only the tip of the iceberg in regard to the number of altered slabbed cards in the marketplace. My personal opinion is that it is the rule, not the exception, that vintage high-grade cards that have significant market value and which do not have documented provenance to a period when there was no economic incentive to alter, are altered.

This got me to thinking about the recourse defrauded collectors would have against PSA, and I looked up the latest version of the PSA Guarantee. One provision in particular stood out, which I don't recall having previously seen.

In each case of a Guarantee claim, there is a per-card cap of $250,000 and a lifetime cap of $500,000 per person (together, the “Maximum Amount”). PSA will not pay Guarantee claims in excess of the Maximum Amount.


As I read this, PSA in one fell swoop is trying to wipe out probably the great majority of its contingent liabilities, which, if successful, would probably save it from economic collapse should someday all these alterations come to light and PSA is bombarded with Guarantee claims it cannot afford to pay. There are many cards in the six-figure range. And there have to be a significant number of collectors whose card holdings are tied up in cards that are the prime alteration suspects where a $500K lifetime cap would not come close to making these collectors whole.

In past discussions about the PSA Guarantee I and others made the point of saying someday it could pose an existential threat to the company. Based upon this latest version, and assuming it is enforceable against collectors whose claims under the Guarantee involve cards acquired before this provision was added, PSA quietly in a brilliant legal move might have prevented doomsday from ever occurring.

Well, not sure the wording of this guarantee was well thought out by the legal department. I suppose it successfully limits liability of a few crazy alteration claims: ie a 52 Mantle PSA 10 that is determined to be altered. But, I have to think less than .001% of all cards that would be subject to the guarantee would end up above the $250K per card cap.

The total cap of $500K "per person" could limit some liability. But, if you are at your cap and you paid $50K for an altered card which, if known, would reduce the value to $1K, wouldn't that card still have a value of close to $50K to any person that is not at their $500K PSA guarantee limit? Nothing in the language quoted would preclude a person from knowingly selling or assigning a card covered by the guarantee to another person who could, in turn, submit a guarantee claim to PSA.

It's meaningless in my opinion because THEY control the determination of whether the card sent back to them is altered or not. As we saw in the case of AJ's obviously altered Leaf Jackie where they stood behind the grade. They don't need fine print to cap their liability, just their own bad faith.

I do agree with Corey that the cards that have been specifically outed are the small tip of a big iceberg.

I agree that THEY control whether a card is altered. But assuming an obligation of good faith is required of them when making this determination and given that in many instances I believe it can be conclusively shown the card has been altered, I don't think this is a meaningless provision.

Granted as a practical matter no one is going to bring an action unless the claim is astronomical enough to justify the legal expense, but I can foresee where someday somebody might have the economic incentive, and in such an instance this provision could be helpful to PSA. The fact they added it suggests to me that they know the reviews they give cards submitted under the Guarantee are done in bad faith.

It would be very hard to prove assuming it ever got that far. PSA puts on Reza, the person with the most experience grading cards in the world probably, who testifies it looks good to him and that's why he recommended not buying it back. The collector puts on someone else who can't examine the card outside the slab. I mean if the card was an inch short sure, but most altered cards aren't THAT obvious.

I think between what could be forensically proven, coupled with the egregious nature of some of the alterations, their so-called expert, regardless how experienced, would be shown to be either a liar or an idiot. Whatever the case, if I was a guy who stood to lose the value of most of his collection and the loss was at the level that warranted a lawsuit, I would file it.

How do you forensically prove anything with the card in a holder? And don't you void the guarantee if you remove it? Maybe there could be some stipulated procedure but I don't know.

And I am not sure you could show a loss. The Wagner is almost universally conceded to be first sheet cut (rendering it AUTH even before Mastro) and then trimmed. It's ROI is astronomical. Who has lost any money in the scandal? You don't like your altered card, just sell it for a profit. :) Duty to mitigate, remember.

Presumably the instance in which someone would have the economic incentive to bring an action is when he cannot sell it for a profit. Granted that day may never come because the current market does not seem to care that cards that are selling for hundreds of thousands of dollars are in reality worth a fraction of that, but it still blows my mind that people do that. As was noted by one of the posters in the blowout thread, that person is very distraught that his mint card is altered, and likely will view graded cards differently going forward.

And too I would think that even if it required at some point taking the card out of the holder to do the forensic examination, which I'm not sure is required in all instances, once that was done and the card was shown to be a fake, any trier of fact would look at PSA's expert in a different light. I don't think juries like it when people get screwed and believe it was done in bad faith. And too, I'm not sure how well it will be received by a court that the only way I could mitigate my damages is by withholding material information from the person I would be selling it to.

The opinion sellers DO NOT CARE about any of these conversations, or about Blowout or about YOU or about YOUR CARDS.

Nothing has changed from the beginning of their existence.

They lied then, and they lie now, surprised!

The only thing that the average individual can do is to can be done is to stop using them, and obviously that isn't going to happen.

For those of you who use them, enjoy collecting your plastic slabs and the fantasies that many of them contain. Nothing wrong with enjoying your fantasies.

IMO you could probably disclose it in most cases and do just fine. You and I are from the generation where it mattered, but I don't think it does any more to a huge swath of the hoibby.

Nailed it

"How do you forensically prove anything with the card in a holder?"

They do it all the time at Blowout. Obvious trims & recoloring. Is that not forensic?

In a trial, who is the collector going to call as a witness, an anonymous poster from BODA? In court it has to be done under strict rules of evidence. Different animal altogether. You could try it through an expert I suppose. In my opinion this card is the same card as the card in this online photo which I've never seen, and it appears to have been trimmed after that photo was taken. Good luck with that.

The photo evidence is so obvious. Does it take a jury to confirm?

I'm guessing a jury would confirm within an hour.

I am not sure I follow the question? Are you asking whether a judge would find for the collector on a motion for summary judgment? I can't imagine that would be the case. You would also need to think about how you even get the photos into evidence. They aren't "self authenticating."

If these were easy cases you would have seen the government pursue them, IMO. It's easy to do this in an internet forum, not necessarily so easy in a court governed by rules of evidence.

Sounds like we a have a problem in the courts.

Not at all, IMO. The problem would be if we didn't have strict rules of evidence. Are some cases going to fail, or not be brought, as a result? Sure. But the alternative is unimaginable.

I guess I'll have to be satisfied with the court of public opinion.

In this case, probably so, I think.

The evidence is so glaring.

Indeed, but perhaps not the admissible evidence. Not always the same thing, for better or worse.

let's just all admit that the hobby is clearly a "BILLION DOLLAR FRAUD" and move on:D Enjoy the teeth kicking and reaming or don't collect. I guess I just choose to enjoy it, cause I'm crazy like that.:D

For the worse here. No doubt about it.

You have to figure that one of these days this house of cards is going to come crashing down.

This used to be a fun hobby when people bought cards for the enjoyment of it rather than the investment potential.

What is really sad is that there is evidence of card tampering and the investors just turn a blind eye because in the back of their minds they know/understand what will happen to their investments when/if the industry comes crashing down.

As I always comment - I don't care if this stuff comes tumbling down in value because then it becomes a hobby again and the investors will hopefully find something else to spend their time screwing up.

I still can't imagine that in a court of law that the TPGs will be the ultimate authority when the whole case would be about their competence in determining if a card is altered (or not).

Perhaps the grading companies have some weasel wording that will exonerate them from liability, for example perhaps somewhere it's written in the terms of service that the opinion rendered is just that a subjective opinion. In that case, it is what it is and they'll continue to turn a blind eye to this.

.....
 

SGC will still be standing no matter what. It's the others that have to worry.

Anyone that has been around long enough sees and knows what I'm talking about.

From day 1 with the McNall/Gretzky Wagner. They just laugh and continue to cash in.

So bad.

Nuff said.

:cool:

We need an emoticon for blinders.

0-0

(emoticons are the old text-based predecessors to emojis)

How many years off was I? :)

It's all good. I actually like emoticons. They're "vintage."

:-)

Here’s one that’s not vintage, but still on-topic for this thread.

💩

Whats the context? They could cap liability to a submitter since there is privity of contract, but to just announce they won't be responsible and expect that to stick with a non-contracting party, yeah, good luck with that. If that worked, I'd post a liability cap on everything I send out.

Well they’ve gotten this far, making their own inane rules and policies, with the collecting masses lapping it up to no end. They’ve deemed proven altered cards to be original and have kept people waiting up to a year to receive their “grades”.

So obviously they think theirs is the word of God, and that they’re legally exempt. No amount of corruption or incompetence seems to detract from collectors’ desires to support them. So why not re-write the rules?

It really is silly that they ever offered any sort of a guarantee whatsoever, to begin with. You'd think they would just accept the fact that they are unable to detect most alterations by this point and just get rid of their guarantee program. It really is pointless. They should just be upfront and honest about what they can and cannot do and simply admit that their grades just represent a particular grader's opinion on a particular day and that there is a very wide range of expectations when sending in cards for grading.

I'd love to see a hobby "secret shopper" like the apparel and restaurant industries have where a mix of altered and unaltered cards are sent to every grading company and statistical reports get published with their results, showing each company's Type I and Type II errors (TPG said a card was not altered when it was, and TPG said a card was altered when it was not). I'd place my bets on SGC being by far the most accurate.

Relatedly, I've always wanted to see someone buy up say 100 random PSA 10s from a seller like 4SC and resubmit them and report the results.

You are thinking like an old school card collector, not a new age flip collector.

I look at that the same way I looked at my employer telling me to simply palm the fake 10 I'd taken off on someone else. (I covered the 10 and kept it. )

Can a duty to mitigate be a defense for fraud? I'm thinking no, but stuff can be weird....

I wouldn't be so sure.

And how would you count rejections based on how giving a deserving card a number grade? Of my three rejects,
1 "miscut top and bottom" Very rough cut, factory but not at all typical.
2 "Min size" also factory, and the difference in height was less than the difference in width on another card in the same submission. I suspect the narrow card - a non AB T206 that's very near as narrow as my AB backs got through while the short one didn't because the size they use for width accounts for AB, but the height is more strict.
3 Trimmed all four sides. Totally blew it including that one as I delayed then rushed to pick a card to make the minimum number for that special. It is trimmed.

I get that the first two would probably look "bad" to someone who doesn't know what a factory edge looks like, so they wouldn't give it a number. I got the explanations by requesting not to holder as "A"

No, it's applicable to a contract claim. But a claim based on the guarantee would not be a fraud claim. Although now that I think about it, the way it's worded, I don't think there would be a duty to mitigate.

Is there a good explanation of those rules that a non lawyer can easily understand?

To me, I'm thinking you'd have provenance on an earlier image. And for some, fairly clear identifiers.
Like
This card with PSA serial number X was shown in this image when it was offered on x date by this particular seller.
Theres a unique wood fiber inclusion visible just here further identifying the card.
That image is X dpi, making that fiber x distance from the nearest edge


This image is a new image created on x date, and at the same dpi as the original. Note the unique fiber inclusion is now Y distance from the nearest edge.

This is the actual card, as shown.

That could be done for all edges and overall size.

Would it not be allowed?

I assume you would have an expert witness try to do all this. Who would that be? If so, here are the applicable standards at least in a federal court:

Rule 702. Testimony by Expert Witnesses

A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if:

(a) the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;

(b) the testimony is based on sufficient facts or data;

(c) the testimony is the product of reliable principles and methods; and

(d) the expert has reliably applied the principles and methods to the facts of the case.

One issue I see right away is (c), because comparison with prior photos is not how anyone in the industry authenticates cards. So you would have an initial substantial hurdle of trying to persuade a judge that this new method was reliable.

I think I can see how it works.

I was thinking probably too narrow, identifying that two pictured objects are in fact the same object, and that it got smaller between two different dates.

But it would have to include info about how the edge quality changed, and other things. And since they're all related as "proof" if one was disallowed, the rest are far less useful. Like if you can show the edge quality doesn't match original examples, but can't show that the card got smaller between dates, the edge info won't matter. Or the other way around.

So you'd probably need multiple experts? In my limited experience, people have a hard time grasping someone being a generalist, however knowledgeable.

It seems odd to me that if someone like PSA used a flawed method of determining trimming, then that becomes the standard method.... I guess one of those "things get strange sometimes" things.

I have often wondered if by some unlikely scenario THE t206 PSA 001 Honus ever ended up in an authentic holder, where it belongs, what would it fetch at auction?

I guess there would be some kind of drop but the publicity, history and prior ownership would keep its' valuation in the stratosphere.

The statistician/data scientist in me would love to run experiments like this. But my financial advisor/wife claims it's an unwise investment. Maybe someone will set up a 'GoFundMe' and I can donate to the cause lol

That might be the prevailing consensus, but I doubt it.

Let's say we could buy 100 random PSA 10s from 4SC fairly spanning their price range, with other people's money. What's your guess as to the distribution of what would come back if we resubmitted them all raw? I would guess something like 20 10s, 50 9s, 10 AUTH, and the rest 8s and 7s. That might be high on the 10s.

I think you'd have a much more difficult time convincing a jury that even the act of trimming->regrading->reselling a card is a crime.

I've had multiple people tell me that even cleaning cards is "wrong" and/or criminal behavior. I honestly just laugh and roll my eyes whenever I hear that. They come across to me as completely delusional. And I'm certainly in the majority viewpoint in this hobby today. But as soon as you step outside this hobby, the distribution of opinions immediately sways *much* more heavily in the direction of "who cares?" than it does "that's fraud!". I strongly suspect that any jury you'd ever encounter would view card doctoring of all stripes the exact same way. Even with the most egregious of acts like trimming.

Inside this hobby, we hear things like "fraudster!", "card molester!", "scum of the hobby!", etc. But outside the hobby, all you hear is, "clever!", "haha, sounds like he found a loophole!", and "smart!". Nobody else thinks this is fraud. Just us. And a (likely small) subset of us at that.

It would depend quite a bit on the type of cards we selected.

If they were ultra-modern shiny cards, I suspect it might be something like:
60% 10s
30% 9s
7% 8s
1% 7s or lower
2% Authentic/rejected

If 80s junk wax with older certs
10% 10s
30% 9s
20% 8s
10% 7s or lower
30% Authentic/rejected

If vintage with older certs:
<1% 10s
15% 9s
10% 8s or lower
75% Authentic/rejected

We're talking here though about a civil case against PSA on its guarantee, not a criminal trial for card doctoring.

Oh, got it.

I wonder how much this phrasing might matter in that case?

"PSA will not grade cards that bear evidence of trimming, re-coloring, restoration, or any other forms of tampering, or are of questionable authenticity."

The "bears evidence of" qualifier seems pretty important to me when I read this statement. You could send in one of those BODA-outed cards that were clearly trimmed if comparing before vs after photos, but unless the card itself actually "bears evidence of" trimming, then it really doesn't matter. The graders aren't magicians. If there is nothing there to detect, then there's nothing to detect, as Peter from SGC says.

+1
If it doesn't "bear" evid of trim but is trimmed? It seems PSA/SGC covered themselves, technically.

.

IF you can get into evidence a prior image of a card established to be the SAME card, and you can show that card is smaller than its current version, I would call that bearing evidence of trimming. I don't have expertise in the method Blowout uses, but if one can establish it is analogous to a card "fingerprint" and persuade a court to admit it into evidence, and again I'm not saying you can, I think that would be pretty compelling evidence of trimming. The cost to do this, though could be astronomical, in terms of the witnesses one would need to call to establish the reliability of the method.

So hypothetically you can prove a card is trimmed, but it bears no evidence of trimming? I don't think that would work for PSA. It's too cute and hypertechnical.

I don't really see it as a loophole or technicality though. It reads very straightforward to me. Saying that a card bears evidence of something is a statement about the card itself, not about scanned images of a card. In this case, to say that a card bears evidence of trimming means that upon close examination, the card's edges look like they've been trimmed and/or the card does not meet the required sizing specs.

PSA grades cards, not pictures of cards.

You argue to the jury that yes we admit the card is trimmed, but we don't have to honor our guarantee. I'll take the opposite all day long.

Of course there are ways to detect whether cards are trimmed visually, but if it's actually a court case, I wonder if the owner would allow invasive/destructive scientific testing of the card. If three edges show 100 years of exposure to air contaminants, and one only shows 10 years of exposure, that would be scientific evidence that PSA is incompetent. So on a card like a $500 EX-MT card that became a $100,000 PSA 10, it would be worth it for the owner (who already has some kind of visual evidence that the card is trimmed from before/after photos) to allow for destructive testing.

Travis your position reduces to the proposition that if I submit a card to PSA and I tell them I trimmed it and show them conclusive before and after photos, they should nevertheless slab it if I did such a good job they can't tell. To me that's absurd.

I was accepting the hypothetical for sake of argument. I agree that in most cases there would be ways to determine the card was trimmed even without before photos.

I don't understand why so many people adhere to this idea that all (or even most) trimmed cards are identifiable as such, and that any trimmed card that passes through grading represents a failure to detect something that should have been detected by an expert grader. It's simply not true, and anyone making such a claim is doing so based on hearsay, and not on experience.

Perhaps this belief stems from PSA posturing themselves as indeed being capable of doing precisely that and everyone just believing them, but it doesn't make it true. Unfortunately.

IMO the overwhelming majority of trimmed cards can be conclusively shown to be trimmed if forensically examined. Conversely, IMO, the overwhelming majority of trimmed cards cannot be shown to be trimmed by visual examination alone when altered by an experienced card doctor.

Inasmuch as (to my knowledge) PSA undertakes only visual examinations, the opinion it gives to any card where an uptick in grade equates to a significant bump to its market value, unless that card has documented provenance to a period before card doctors existed or there was no economic incentive to trim (or otherwise alter), is WORTHLESS.

So, the sin PSA is guilty of is not a failure to detect something that they could have detected, but their representation that a numerical grade gives a collector a reasonable assurance the card has not been trimmed.

No, it doesn't. What I wrote cannot be reduced down to anything that includes a signed confession of anything as part of the equation. You're adding that in.

Absolutely. Well said. And just one more reason why I hold SGC in much higher regard than PSA. At least SGC openly admits that some alterations simply cannot be detected. PSA refuses to even address the issue and continues to pretend as though they are fully capable.

What's the difference? The card still BEARS NO EVIDENCE of trimming. By your logic, the issue isn't whether it's trimmed or not, it's whether it bears evidence of trimming.

It is really not that absurd. A fellow member done almost exactly that and they graded the card a 9.

Seriously can't make this up. He sent in a counterfeit card. He is a data guy that writes a lot of papers. He included a paper describing in great detail the differences between it and a "real/normal" version of the card. It isn't even on the same card stock and they graded it a 9.

“So, the sin PSA is guilty of is not a failure to detect something that they could have detected, but their representation that a numerical grade gives a collector a reasonable assurance the card has not been trimmed.”

And wasn’t this pretty much the entire premise for their existence? :confused:

It was certainly one of the value adds they claimed to bring. A bit ironic perhaps. However, it is still true that despite their countless mistakes, they are considerably better at detecting this stuff than all the lemmings that launch criticism their way. The hobby is definitely better off with grading services than without.

When PSA came into existence, the main concern at that time was not altered cards, but instead the subjective nature of grading. One person's 8 was another person's 5. I remember quite vividly a major dealer at one of the card shows displaying altered cards in an attempt to alert the hobby about what he felt was coming. This dealer did this precisely because of his concern the threat of alterations was not sufficiently appreciated. To go further, I find it hard to fathom that PSA would have given the "8 Wagner" a numerical grade if at that time their business model was focused around detecting alterations. PSA might be arrogant and stupid, but not that stupid. Despite what they or anybody else might say today, based on what I have been told by reliable people with first-hand information, they KNEW the card was altered. So, despite their desire for the publicity grading the card could give them, it would seem crazy to give Serial No. 00000001 to a card their principal grader believed to be trimmed (and which, IMO any grader with a modicum of competence could plainly see was trimmed) if they knew such a grade would directly contradict their business model.

To go further, I don't think anybody at that time could have forecast where we are today -- cards selling for levels exponentially greater than they did 30 years ago when a one grade uptick could add 5 to 6 figures of value. What all this tells me is that the next evolution in grading will be forensic grading. THAT would mean something in giving a reasonable assurance the card has not been altered. As to how or if that will ever happen, I don't know. But if I had the capital and inclination to start such a company, I would do it.

Skeptics will say such a company will never come into being because there will be no market demand for it, that the great majority of the hobby doesn't care if a card is trimmed as long as they get the number they want on the almighty slab. Well, that may be true now because there is no viable option. If there were, I would think an informed collector contemplating buying an expensive card that is a prime candidate for being trimmed would be economically incentivized to spend an additional few percent to get meaningful assurance the card is what it is purported to be.

Today, I learned that the Wagner was not actually the first card PSA graded. That serial number was merely reserved and used for the Wagner, but there were many cards graded before it. According to Mike Baker, who would know, as he was the person who slabbed it. He had a great interview on Jeremy Lee's latest episode of Sports Cards Live where he goes into great depth on all things grading, including card alterations.

Thank you for this information. I changed "their FRST card graded" to Serial No. 00000001. The point remains, though.

Bill Hughes was the head grader back then, See The Card by O'Keefe. Or ask Leon, who has talked to Hughes about slabbing the Wagner. Baker came later he was not there at the time.

Cannot let this one slide. Let's look at the definition of a "lemming"...

What does it mean to call someone a lemming?
A person who follows the will of others, especially in a mass movement, and heads straight into a situation or circumstance that is dangerous, stupid, or destructive: These lemmings that eat up conspiracy theories are so blinded by lies, they don't even see the cliff they're about to plummet over.

I would argue that definition applies flawlessly to the hypnotized/addicted TPG apologists.

https://www.google.com/search?q=lemm...hrome&ie=UTF-8

Baker claimed he was there during his interview with Jeremy Lee. He said he just wasn't a grader yet. This interview was from yesterday. He said he was the person who encapsulated the Wagner. But he did not grade it. He operated the slabbing machine.

To each their own, I suppose. I view the ignorant forum posters on Blowout who know nothing at all about grading cards, yet still launch criticisms at the TPGs for not catching trimmed edges as lemmings. These people would do no better than a monkey picking bananas at identifying trimmed cards if handed a stack for grading. But they read how easy it is on some forum, so they all just parrot the same information. Lemmings.

Sounds very interesting. What card was it?

SGC isn't much better at picking up some kinds of fakes and alterations.
And also sticks with their mistakes if they're big enough.

There are tells for any manufacturing process. The ones for card factory cuts are known and clear. The biggest one actually survives a lot of wear, being present on cards that would only grade a 1, and even some that might be worse than that. I could teach my kids to spot this in a few minutes.
Some maybe most trimming can be spotted even if the card is in a slab.

And that's without even getting into things like how much gunk a card has absorbed from the air, on the edges or otherwise. Or if the internal angle of the cut from the cutter is the same (that last one is not always easy to spot, especially if the blade was sharp. )

Either grading companies aren't making the effort, which seems likely.
Or they don't know what effort to make
Or they know whose cards to not make the effort on.

The person who graded the Wagner told me that he couldn't see evidence of trimming, and without any other evidence to any alteration, gave it it's rightful grade of 8. I believe him.

I agree with your other assessments, Cory. Hope you are well...

edited to say, I have always believed detecting trimming is not close to foolproof or scientific (yet). Most graders, of any consequence, would agree.
.

I think 1 and 3 explain more than 2.

This is a good list. As a man whose business is selling time and expertise where efficiency is everything, I might add the possibility that they are moving so fast that they don’t have the time to invest in each card to really investigate. At least when it comes to quality hack jobs.

I’ve read some theories that suggest that the amount of time spent with any single card is pretty minimal. Like a minute or two.

I was thinking of that as part of Steve's #1 but for sure.