FOR RELEASE:  10:30 A.M., APRIL 16, 1991



                FTC'S CUTLER WARNS COIN INDUSTRY:
               SERIOUS PROBLEMS REMAIN UNADDRESSED


     Neither a government-affiliated "self-regulatory organi-
zation" nor an industry-run watchdog group is the perfect
solution to combatting fraud in the rare coin industry, said
Barry J. Cutler, Director of the Federal Trade Commission's
Bureau of Consumer Protection, in remarks before the Industry
Council for Tangible Assets in Washington, D.C. today.  Rather,
Cutler challenged the industry leaders who have been considering
alternatives for self-regulation to go beyond the rhetoric and
commit themselves to true consumer protection for rare coin
investors and collectors alike.
     Cutler cited the annual Salomon Brothers Report, a com-
parison of investment options used by telemarketers and others to
make lavish investment claims about rare coins, as an example of
the industry's lost opportunities to take decisive action to
protect unwary investors.

     "Is there anyone in this room who does not agree that the
Report has been a major selling point for virtually every
telemarketer?" Cutler asked.  "If the leaders in numismatics
today are unwilling or unable to prevent unwarranted consumer
reliance on such rosy investment claims, what hope can rare coin
dealers realistically have for the idea that the industry alone
can do the job of self-regulation without a self-regulatory
organization (SRO) or other government involvement?"

     The FTC has challenged one rare coin dealer who used the
Report to market coins that had little in common with the truly

                            - more -
ICTA Remarks--04/16/91)


scarce and rare coins used to base the Salomon Brothers Report. 
Cutler noted that previous Salomon Brothers surveys had been used
in fraudulent schemes to market investment-grade diamonds, as
well.

     Investment fraud has not abated since it was first called to
the attention of industry leaders last year, Cutler said, and he
challenged the audience to educate the public and take behind-
the-scenes action to prevent the pitfalls awaiting consumers who
rely on the Salomon Brothers Report and other indices to project
appreciation for rare coins.

     Cutler doubted that industry proposals for a formal SRO
would be the panacea claimed by some of its supporters.  At the
same time, he said, industry self-regulation by itself may be
insufficient to solve the fraud problem.  "The industry has
offered much talk, but little action, about self-regulation in
the five years since the FTC became very active in the coin
industry," he said.

     "Industry leaders agree on what they do not want --
government regulation," Cutler continued.  "What I see lacking is
any genuine commitment to what industry leaders say they do want
-- true consumer protection for investors and hobbyists alike.

     "The next few months . . . will give your industry an
opportunity to convince the government and the consuming public
that you really mean business this time," Cutler said.

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