PuristSPro Advice: The Perils of Buying and Selling At Auction
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:
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:
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!
Auction houses have also offered other lots in lieu of payment too...
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.
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!
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!
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.
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