Federal Trade Commission - April 1994

Art Fraud
fast facts

Every year, American consumers lose hundreds of millions of dollars purchasing supposedly valuable commodities that do not live up to their billing. You should be aware that counterfeit art prints are included in these items.

Among the most frequently counterfeited prints are ones purportedly done by famous artists such as Salvador Dali, Pablo Picasso, Marc Chagall, and Joan Mir�. Consumers from all walks of life are targeted in these scams. Recent FTC cases indicate that those buying counterfeit art work include doctors, farmers, stockbrokers, housewives, and even other artists.

If you are taken in by a false art sales pitch, what you get is often much less than promised. After paying anywhere from $500 to $10,000 or more, you may get art work valued at no more than $50 -- the equivalent of a poster you might buy at a museum.

Many of these bogus pieces are copies of images created by well-known artists, which are produced without the artist's knowledge or authorization and carry a forged signature of the artist's name. Others are counterfeit art pieces produced in the style of well-known artists. In still other instances, the art work is authentic but its value and investment potential are far less than what you are led to believe.

How the Scam Works

The scenario for trapping consumers into paying inflated prices for counterfeit art works varies. One common tactic is to send you a letter describing a contest or drawing giving away a free original lithograph by a famous artist. You are asked to return the postcard with your name, address, and phone number. Your post card probably will trigger a telephone call from the scam operator, who tries to convince you to buy a valuable work of art. The caller may claim to be offering a "fabulous opportunity" to obtain a limited-edition print that will be an "excellent investment." You may be told that a famous artist is near death and that you should buy now, since the value of the art work will increase after the artist's death. You will likely be offered a "certificate of authenticity" attesting to the genuineness of the work. And, often you are promised a trial examination period with a 30-day money-back guarantee. There are as many variations to this basic sales pitch as there are con artists.

Fake art prints are not just sold over the telephone. They also may be sold at seemingly reputable art galleries in your own community. You may find authentic works by contemporary artists hanging side by side with fake Dalis and Chagalls. Sometimes the dealer will pitch the print as an investment opportunity. The dealer also may downplay the investment angle and try to sell the print as a valuable collectible.

How To Protect Yourself

Although there is no foolproof way to protect yourself if you decide to invest in art, the following suggestions may be helpful.

Get professional advice. Counterfeit prints are often so well produced that few laypersons can tell the real thing from a fake. Therefore, it is very important to consult a reputable expert, such as an art appraiser or museum curator, before finalizing the purchase of any artwork attributed to a well-known artist. Ask the seller for specific information about the piece, including the edition size, the print medium (such as lithograph, etching, silkscreen, or woodcut), the year of publication, and the printer/publisher -- all of which will help an expert evaluate the work. Some states have disclosure laws that require the dealer to give you such information. These include Arkansas, California, Georgia, Hawaii, Illinois, Maryland, Michigan, Minnesota, New York, Oregon, South Carolina, and Wisconsin.

Tell the dealer you want the sale to be conditioned on an appraisal of the piece by an expert of your choice. Make sure that you have the right to get your money back in case the work is found to be a fake. Be sure to read the fine print. Some sales invoices only give you the right to exchange your print for another and do not provide a money-back guarantee.

Be extremely careful about buying art work over the telephone. It is very difficult for consumers to gauge the value and authenticity of a work of art or the credentials of an art firm by telephone. You may want to check with your local or state consumer protection agencies, the Better Business Bureau, or your state Attorney General to determine whether complaints have been lodged against the company contacting you. Be aware, however, that many fraudulent telemarketing companies frequently change their names, so there may be no complaints registered against them.

Be skeptical of authenticity claims. Art dealers often provide "certificates of authenticity" or written appraisals with the prints they sell to support their claims of authenticity. You should be wary of any art dealer who refuses to put his authenticity claims in writing. Keep in mind, however, that such documents are only as reliable as the firm that backs them. Don't be taken in by dealers who refer you to "art appraisers" who are on the dealer's payroll.

Be suspicious of promises of great investment returns and high-pressure sales tactics. Fraudulent offers often revolve around the idea that, unless you act now, you will be passing up a terrific investment opportunity. But remember -- no offer is so good that it cannot wait for a cool professional examination. Ask yourself: if this offer is so good, why is a total stranger making the effort to sell me this investment?

Do not give out your credit card number over the phone or by mail. Without your credit card number, salespeople have minimal access to your money. They may say they need your card number for "verification purposes" and not for payment. Be careful. You risk big losses when you give your credit or charge card numbers or other personal information (such as bank account numbers) to unfamiliar salespeople who make unsolicited calls.

What to Do If You Have Problems

If you buy a work of art and discover that it is a fake, first try to resolve your dispute with the company that sold you the piece. If you are not satisfied, contact your local consumer protection agency, Better Business Bureau, or state Attorney General to report the company. You also can contact the National Fraud Information Center at 1-800-876-7060 (9:00 am - 5:30 pm, EST, Monday - Friday).

The Center will forward your complaint to the Federal Trade Commission, Washington, D.C. 20580. Although the FTC generally does not intervene in individual disputes, the information you provide may help establish a pattern of law violations by a company that could result in legal action by the FTC.

For More Information

For more information about telephone scams or other consumer protection issues, contact: Public Reference, Federal Trade Commission, Washington, DC 20580; 202-326-2222. Ask for a free copy of Best Sellers.

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