PuristSPro Advice: The Perils of Buying and Selling At Auction

Nov 08, 2018,15:10 PM
 

Moderator Patrick_y lists some true scenarios of bad behavior at auction houses so PuristSPro readers can learn the mistakes of other PuristSPro members and avoid making the mistakes themselves. 


Don't miss this previous thread, PuristSPro Advice: Don't Blindly Trust Your Safe Deposit Box:

www.watchprosite.com

I'm not going to be making any friends at the auction houses with this article.  So I publish this with great risk and detriment to myself.  Just about every auction house in existence has made a mistake, probably multiple mistakes, because they are run by humans and humans are often incorrect.  Good auction houses have bad employees and vice versa.  Auction houses are necessary for quick and speedy liquidations of collections, but collectors need to beware of the risks they're taking when buying from an auction house.  Here are some stories witnessed by some PuristSPro members. 

Amanico made a great post about unethical auction house behavior here:
www.watchprosite.com

A PuristSPro member who bought a watch from Antiquorum who advertised it as a Lange but then it turned out it was a Laco!  This auction house presumably received the watch as a consignment piece, the consignor likely provided a description and the auction house listed the watch with the supplied description and didn't even open up the back of the case to check if the description was accurate.  When the client who acquired the piece later took the watch to Lange in Germany for servicing, the movement clearly said "Laco" and not Lange.  Antiquorum wouldn't refund the client for years.  This client finally managed to get a refund only after his story was picked up by the press.  In the years prior to this article in the Press, Antiquorum was doing around $250 million in auction revenue annually.  After the article ran, Antiquorum was only doing approximately 1/3 or thereabouts (rough numbers).  Moral for the careful consumer: don't take the auction house's word for anything, auction house descriptions can be completely false; and descriptions and condition reports are probably written to favor a higher bid. 

Auction houses have also "forgotten" to pay their consignors.  So it's not just the buyer who is always at risk.  The seller/consignor has risk too! 

nypost.com

Auction houses have also offered other lots in lieu of payment too... 

nypost.com

The following story is hearsay, but considering I've heard two very similar stories, I feel compelled to mention it.  Two PuristSPro members  contacted Antiquorum, informing Antiquorum that lots in their upcoming auction had timepieces that were stolen from themselves.  When they provided Antiquorum with the police report; these lots were withdrawn by the original consignor.  The PuristSPro members never recovered their stolen timepieces.  The PuristSPro members had confirmed Antiquorum had the physical piece themselves, yet after informing Antiquorum which specific lot it was, these two PuristSPro members believe that Antiquorum leaked the information to the consignor so the consignor retracted them from the sale.  It would be irresponsible for me to say that Antiquorum is a front for stolen goods, but I wouldn't be slandering any entity to suggest that it seems that Antiquorum definitely acts in unethical manners.  And why would Antiquorum protect the consignor of stolen goods?  Does the consignor have a special understanding with Antiquorum?  And is the consignor fronting stolen merchandise on Antiquorum?  Either way; Antiquorum should have followed proper protocol and given the lot to police so the police could determine how to re-unite the property with the correct owner. 

It's very important to note; Antiquorum is not the only bad auction house.  Every auction house has made mistakes.  Many auction houses often refuse to take responsibility for many of those mistakes. 

Sotheby's had a work by Banksy, the famous graffiti artist that was in one of their auction.  This Banksy came to Sotheby's already framed.  Traditionally, when an auction house gets a painting, they remove the painting from the frame to confirm it is the real thing.  The painting is examined under multiple processes, UV, various light angles, with a variety of experts.  Sotheby's apparently either didn't do this normal procedure with the Bansky painting or they did it so casually that they didn't notice the frame was heavier than usual, the frame had a power source, an inverter, and a PAPER SHREDDER!  When the hammer/gavel fell, a prankster remotely started the shredding of the Bansky painting.  Sotheby's vehemently claimed they didn't know about the prank and were not in on the act.  Well, that leads me to conclude, on a painting with an estimate of hundreds of thousands of Pounds, this is just further evidence that Sotheby's was so careless in their inspection that it is probably legally defined as negligence!  

When you buy anything from an auction house; I'd be very afraid.  Very afraid.  All those experts and they didn't even notice the shredder, batteries, and inverter hidden in the frame...  All those experts...  Is it fair to call them "experts" anymore?  More like "incompetent experts" seems to be more fitting.  For shame! 

Mr. Bill Koch (one of the three Koch brothers), one of the largest art and wine collectors in the world said in a 60 Minute Interview that auction houses make buyers complicit in their scams.  When buyers buy something and then later realize there's a problem; they go back to the auction house to complain.  The auction house says they'll consign the art for the buyer and sell it and take a reduced commission so the buyer is made whole again.  The buyer is now complicit; because they will remain mum so their property can go for a high bid to another unsuspecting buyer.  It's a feedback loop!  Bill Koch, spent millions of dollars hiring private investigators to determine if his collection of wine and art was legitimate.  One of the investigators found that some of his wine bottles from the 1800s was glued to the bottle with Elmers brand glue, a school glue for children that wasn't available in the 1800s.  Mr. Koch has acquired with many of the major auction houses, and it seems all of them have problems. 

www.cbsnews.com

If billionaires like Bill Koch are getting screwed over and hiring $35 Million plus on private investigators and experts; I don't know what mere millionaires can do... 

All I can say is be very careful at auction houses.  An auction house may not be out there to get you, but if you have a problem, it is likely going to be difficult to get the auction house to take responsibility.  With all of these experts who work at auction houses; many preside over more than their area of expertise, and many can make many mistakes. 

Please feel free to share your story below.  Include your comments as well.  I will read every one of them. 





Bill Koch and 60 Minutes

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Comments: view entire thread

 

Thank-You Patrick for a great and most useful post. If big league collectors also get conned, as in your example of Bill Koch, there's indeed good reason for everybody to be careful.

 
 By: Fab5119R : November 8th, 2018-16:24
Personally, I've never tried to buy from auction houses yet, in part because of these unfortunate stories that periodically pop up. (In fact, I've bought all of my watches at ADs so far, though I realize I'm a fairly extreme example in this sense Some oth... 

Absolutely good advice!

 
 By: patrick_y : November 8th, 2018-20:31
Yes, do double check and always inspect the piece in advance. Bring another person who will inspect it as well. The sport of auction is to not get conned. Unfortunately, my success ratio is only around 20%. I've had a lot of bad luck with Antiquorum and B... 

Sorry you had to go through all of this Patrick, but thanks for sharing it, that's extremely useful!

 
 By: Fab5119R : November 8th, 2018-21:25
The third incident is probably the most surreal, first thing I thought was that they were trying to build an insanity defense after the first two...Too bad that auction houses so often seem to get away with an unacceptable behavior, most likely because of... 

If you are, why care ! [nt]

 
 By: Cpt Scarlet : November 9th, 2018-15:44

Absolutely avoid an auction house if you can!

 
 By: patrick_y : November 8th, 2018-20:34
Only buy from an auction house if you HAVE TO HAVE IT and have done the utmost due diligence. Leave nothing to chance.

Frightening... But I lived that by myself, too.

 
 By: amanico : November 8th, 2018-16:32
Here is the link: www.watchprosite.com Thanks for this helpful reminder, my friend. Best, Nicolas

So sorry to read about your experience, Nico!

 
 By: BMR : November 8th, 2018-18:29
Having lost a significant part of your collection had to be hard enough, but then to have to deal with these crooks... Very sorry, my friend!

Dear Amanico

 
 By: Serafino : November 8th, 2018-22:44
Reading about it, it is truly a sad story. I wonder if you have an update regarding the matter- did you follow the legal way? Also I read in a comment that you do not have fab or Twitter. However these two medias do offer a much wider publicity and could ... 

Thank you, Patrick, for sure this post.

 
 By: BMR : November 8th, 2018-18:27
I’ve never even thought about participating in an auction at this point, but it’s good to know of these things if that is ever a route I think about. This behavior is just criminal. How have they not been sued to eternity for this type of thing. At best t... 

Auction houses do get sued, but they generally quietly settle...

 
 By: patrick_y : November 8th, 2018-20:38
Or the auction house goes into collusion with the new owner of the item; NEW OWNER complains about something he bought at auction house; auction house helps by reselling the piece very quietly to another unsuspecting owner. The CURRENT OWNER keeps mum abo... 

great read but imo the biggest scam is their commission

 
 By: Bruno.M1 : November 8th, 2018-23:46
If a watch sell for 135K ... the seller wil get more or less 100K One third is commission fee for buyer AND seller Imagine if a real estate broker would charge the same costs The real estate puts probably weeks or months in one house ( showing it to clien... 

Yeah... 10% from the seller, and 25% buyer's premium. It's crazy.

 
 By: patrick_y : November 8th, 2018-23:51
Auction houses are in existence to make money. Why make a little when you can make a lot? For that much money, one would expect them to have experts who care. In the end, it just goes to say; retailing, overhead, and sales/marketing is a very expensive en... 

Not a scam but quite unethical

 
 By: montres1 : November 9th, 2018-06:26
I like going to auctions and I once went to the open doors for a watch sale. They had a lot of nice pieces and I was able to discuss with the expert. I highly recommend to go before the auction and inspect the pieces that you might be interest in and disc... 

Oh there are worse than that...

 
 By: patrick_y : November 10th, 2018-00:23
There are shill bids. Things that appear to sell but don't really sell (to create a future market). I can't say much and I can't indicate anything in particular since I don't have proof. And there are marketing stories that are simply products of an inven... 

Thank you OP - some excellent advice.

 
 By: Onemorewatch : November 9th, 2018-07:38
I’ve never had any inclination to attend or bid for any watch using auctions however I recently received an unsolicited call From them prior to a recent antiquorom event in where they asked me if I wanted to sell any of my watches. I can only assume they ... 

Avoid them if you can!

 
 By: patrick_y : November 10th, 2018-00:18
If you don't need to sell or buy through an auction house, best to avoid them. Wait until you have a problem with an auction house, it may be worse than "a little uncomfortable." I can tell, you're a fairly careful individual, I think you'll be okay. Just... 

Oops on the spelling!

 
 By: patrick_y : November 10th, 2018-00:16
I don't claim to be a Banksy expert, apparently I even spelled it incorrectly. Apologies! Banksy admitted to building the frame with the shredder involved. He even posted a video on social media of him constructing the frame and testing it.

Spelling corrected. [nt]

 
 By: patrick_y : November 10th, 2018-00:24

Great post..

 
 By: Cpt Scarlet : November 9th, 2018-15:47
I could tell some hair raising stories about Auction Houses but it’s best left to another time. Basically avoid at all costs.

Feel free to give us a taste during next Halloween...

 
 By: patrick_y : November 10th, 2018-00:15
We should tell campfire stories of the horrors of auction house mistakes... I remember, back in my Scouting days, we would tell scary stories around a campfire... We should have a group of watch fans around a campfire trading scary stories; I bet a lot of... 

👍 [nt]

 
 By: Cpt Scarlet : November 10th, 2018-16:02

Are auctions really such bad institutions for watch collectors? I don't think so!

 
 By: BjoernM21 : November 10th, 2018-02:43
I fully understand when owners of stolen watches that turned up at auctions get hatred, especially when there is then no cooperation to reinstate proper ownership. But I believe such watches will also find their way to “brick & mortar” dealers, only that ... 

Excellent comments as well! Thank you for sharing with us your experiences...

 
 By: patrick_y : November 10th, 2018-09:31
Definitely nobody is going to ban you for your fine post above. So no worries there. I thank you for your thoughtful and well crafted response. Fortunately for you, you've been the recipient of good service at an auction house. This probably happened beca... 

I'm glad you got into auctions before the World Wide Web became mainstream

 
 By: TS1987 : November 12th, 2018-11:34
All these horror stories are not made up and they seem to be during the Internet Age. None of the auction houses are suing us for defamation or slander.

Probably happened before the internet age too...

 
 By: patrick_y : November 12th, 2018-11:55
But probably back before the internet age; auction houses were more "gentlemanly" perhaps? Fewer mistakes were made? When mistakes were made, the auction houses took care of the customers better? Who knows... But I know this much, since I started buying a... 

Ouch

 
 By: TS1987 : November 12th, 2018-12:03
Thank goodness for PayPal now. At least there's a little bit of hope

Way too long after 90 days for Paypal to do anything...

 
 By: patrick_y : November 13th, 2018-00:58
Credit cards and Paypal won't do anything after 90 days. It may take a while for you to notice the problem. It took me many months, maybe over a year, until I got the watch to the factory (I live in USA, not in Europe) in Europe to get the watches restore... 

Ouch [nt]

 
 By: TS1987 : November 13th, 2018-03:07

Definitely. There are successes at auction.

 
 By: patrick_y : November 11th, 2018-11:40
But many people who are regular buyers at auction houses eventually get burned. Some of them come back. Some of them stop. Look at Auction Houses dealing with Rudy Kurniawan, the famous wine counterfeiter. The auction houses knew some of the bottles seeme... 

I think when you buy very old stuff

 
 By: nwk00 : November 11th, 2018-19:43
with spotty provenance or dependent on experts with conflicts of interest, there is very high probability of a conmanship going on. Auction houses are not the only places where these things happen, they just happen to be the most high profile.

Thanks!

 
 By: patrick_y : November 12th, 2018-11:49
I just saw a documentary called "Sour Grapes" this weekend about Rudy Kurniawan, the wine counterfeiter who was making fake vintage wine in his home and was selling millions worth of wine at various auction houses. Apparently, the auction houses were gett... 

Thanks for the post [nt]

 
 By: NautNut : November 11th, 2018-11:18

You're very welcome! [nt]

 
 By: patrick_y : November 11th, 2018-11:27

So great points Patrick :)

 
 By: andrewluff : November 12th, 2018-02:53
There are also some good buys as well and not all auction houses are scammers too... I think it is just to be cautious, go and see the watches in person (or someone you trust). I bought watches in auctions and so far have been lucky but then I am not buyi... 

Thank you Andrew!

 
 By: patrick_y : November 12th, 2018-11:43
Yes! I would much rather buy something from a friend whom I trust. I've bought a lot of things at auction; not just watches, but other collectible items. I can definitely say I have a lot of problems. And although I'm very careful, I feel stupid now for a... 

This is a great post

 
 By: Mr.Gatsby : November 12th, 2018-08:29
Damn these auction houses. I rather own less. I for own am really not that thrilled to participate at an auction. Neither do I have that much money to spare

Nobody likes to spare money to be cheated...

 
 By: patrick_y : November 12th, 2018-11:50
Even Bill Koch, one of the wealthiest men in the world, doesn't have money to spare to be cheated. You're on the right path!