Fraud by Consignment
How family treasures can disappear or go uncompensated for in
a dealer shell game
Picture this. Your grandfather's mahogany desk, under which you played
as a child many years ago, is now a crowded piece of memory which you
can no longer afford to keep. No one in the family wants it, and it can
no longer be stored. You put it in the paper for sale, but no takers.
A friend introduces you to an antique dealer, who raves at its condition
and espouses assurances that a maximum value could be obtained in
the market IF you would consign the piece to their shop.
Sounds too good to be true right? It might be...
The desk is out of your house, and just any time there'll be call
that your check from a sale is in the mail. Wow, was that easy.
Wherever there is a valuable rug, there's a rug merchant nearby...
Like any object of value, whether it be furniture, jewelry, or collectibles; there
is no completion of consideration until one is compensated by payment,
or the item(s) are reclaimed. There in lies the dicey game
that some antique dealers will play as to who can outlast who,
and reduce a front end pitch to a back door fraud.
How It Happens
First, let's examine the market that an unscrupulous dealer will target.
The best targets are those that are elderly, have a variety of valuables
(hopefully, that they can't keep up with, minus a concerned relative),
and "trusting". The second best opportunity are those under
some stress; i.e. a divorce, financial difficulty, moving out of town
(that's a plus you'll see later), or just too busy or wealthy to seem
to care, and most of all: "trusting".
The key is that valuables are involved for which the dealer
sees or expects a market, and to say whatever is needed to
gain the confidence (trust) of the owner to consign. This can
be achieved on one of two ways.
First, and most dangerous, is to just let the dealer take
item(s) on a verbal promise of payment if sold. This is an
obvious breach, but surprisingly it does happen. The second,
and most used, is a consignment "contract" in which
the parties agree and list item(s), and both sign with terms
specific as to sale and payment. Done deal. Well not quite.
Now is applied the element of time and value of money. We
look back at the reason the elderly profile is the most exploited
in what can become a shell game nightmare. The person dies.
If the dealer knows it, they're not going to tell anybody;
simply wait. There may have been items sold along the time
before death, but nobody asked and no funds were paid. If,
any number of unconcerned relatives or expediting attorneys
fail to show up, it's money in the bank. The dealer has won
Now, fold in the remaining elderly, the stressed, the out-of-towners
(remember them?). A slightly different shell game is played.
The consigned items are simply items offered for sale, and
over time and holidays they are sold. And pro-rata proceeds
paid to the consignees right? Not necessarily. Remember nobody
is checking or asking, so why pay.
The dealer may eventually pay, but when. A year? Two? More?
Partially? Never? Depends on who asks. Remember there is an
element of trust involved, and whatever is told is usually
accepted. So we have the outright lie that nothing has sold
yet (when it has), to the more diffused response that "Christmas
is coming, let's see what happens", to the "item
is in reserve and is being paid for over time, and you'll be
paid when it is paid off.", knowing full well it was sold
for cash a year ago. All "trusting" responses, to
which an elderly person or someone out of town is usually accepting
If in fact any of the above circumstances are occurring, there
is a high probability that a cumulative monetary benefit is
accrued by the dealer at the expense, or outright fraud, against
How to Protect Against Being Ripped Off.
consigning valuables CHECK OUT THE DEALER ! Call the Better
Business Bureau to see if any complains. Ask for references.
Do your homework.
a list of item(s) consigned, and photograph them if of value.
your near relatives what you are doing.
a friend or relative with you when consigning items to witness
NOT, I repeat DO NOT sign a contract until you understand
it, and if there is any doubt, have an attorney review it
before you execute.
ask, visit and check on item(s) to assure they are still
available for sale. Any question that you are getting
the run around without justification, abandon the "trust" issue
and demand information, payment, or the return of items immediately.
the last part doesn't produce results, call your attorney
or a competent relative for help.
Any elder relative should not be allowed to enter contracts
or release valuables without a near relative assisting PERIOD.
Not all antique dealers are in business to intentionally defraud.
Only a small percentage give the industry a black eye. However,
all dealers taking antique valuables are entering a fiduciary
trust with their consignee clients to act as agreed. To intentional not act
as agreed is fraudulent.
We hope to post an attorneys opinion on the law of fiduciary
trust, contracts, and when fraud may have court and criminal