Collectibles Market Size and Fraud Rate

Part
01
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Part
01

Collectibles Sub-Market - Wine Fraud Rate

This brief presents an estimate of the most recent fraud rate for the global collectible wine market in the fourth row of column C of this spreadsheet. To put the estimate into context, this brief starts with an overview of the types of wine fraud, proceeds to address the enabling factors of fraud in the wine industry, and then closes with the fraud rate for collectible wines as presented in the accompanying spreadsheet.

Types of wine fraud

Wine fraud essentially falls under three categories. The first is wine adulteration, which involves the dilution of wines with "water, juice, sweeteners," or other inferior products. Next we have wine label forgery which targets "inexperienced buyers" who assess the authenticity of wines using bottle labels. Finally, wine investment industry fraud is perpetrated against "select collectible buyers" at "high-end auctions" using the first two types of wine fraud.

Enabling factors of fraud in the wine industry

The rising cases of wine fraud have been attributed to the increased usage of the 100-point wine rating scale by wine critics. The system is used to rate wines on the following factors:


Secondly, the proliferation of "wine auctions" has provided fertile ground for fraudsters. Online auctions in particular allow fraudsters to operate anonymously worldwide. Finally, another factor that has fostered wine fraud is the removal of import duties in certain parts of the world such as in Hong Kong.

The fraud rate for the global collectible wine market

According to 2017 presentations by Maureen Downey, a globally recognized authority on wine fraud, who is also the founder of WineFraud.com, a unique online wine education and authentication platform, approximately "20% of all fine wine traded is counterfeit." The Knight Frank Luxury Investment Index highlighted that by 2017, fine wines had become the "top performing collectible," justifying the use of fine wine statistics to address the fraud rate for the global collectible wine market required for this brief.

Furthermore, Maureen Downey's extensive experience in "fine wine authentication," together with her work with the United States Department of Justice and Federal Bureau of Investigations on several cases of wine fraud, makes her estimates credible. She has shared her wine authentication expertise in worldwide forums in London, Hong Kong and Australia.

Conclusion

The fraud rate for the global collectible wine market was estimated to be around 20% in 2017. Factors enabling this fraud include the 100-point wine rating system, more wine auctions and the removal of import duties in certain regions.
Part
02
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Part
02

Collectibles Sub-Market - Art Market Size

Although the market size of collectible art was not available publicly even after an extensive search, we have used the available information to triangulate an estimate. We suspect the size of the collectible art market is not available because it is typically included in the entire fine art market size. It does not appear to be broken out separately, as we were unable to find any research reports specifically on collectible art, even behind paywalls. The current estimated market size of collectible art is $37.7 billion globally. This value has been input into the attached spreadsheet, as instructed. Below is a detailed discussion of my methodology and findings.

Limitations/Considerations

According to the source used for the calculation of the market size of collectible art, the definitions for art and antiques used for the preparation of the report include sculptures, paintings, stamps, and collector's pieces as the sub-categories.

The source also states, "High-end artworks are selling through privately brokered sales to wealthy collectors, who are less willing to reveal their willingness to pay at auction openly", due to which the market size does not reflect these private sales.

Methodology

Although market size estimates were available from other sources, e.g. Art Basel and UBS estimated the market size to be $56.6 billion, we have used market size estimates from TEFAF (The European Fine Art Fair) due to three reasons:

1. TEFAF is considered to be a "bible for costs and trends in the world’s art market".

2. TEFAF included only those dealers in their market size estimation "who handle exclusively arts and antiques and did not include second-hand retailers", which aligned with our requirements of collectible art, i.e. rarity and/or popular demand. Furthermore, Rachel Pownall, the report author, said, "So, what is a ‘collectible’? If it’s something sold by an antique dealer, then OK, we included the sale; if it’s sold at a second-hand shop or a flea market, the sale was not included in the numbers".

3. The report states, "Many of the art dealers represented in this report and the art dealer survey fielded are aimed specifically to be as representative of the art and antique industry as possible. This results in trade above a minimum item value of $500", which also corresponds with the definition of collectibles.

Calculations

According to the latest available estimates, the overall size of the global art market was $45 billion in 2016, however, it includes sales generated from sculptures, paintings, collectors' pieces, stamps, and antiques. Since you will be receiving separate reports for the market sizes of antiques and stamps, it would be appropriate to exclude their sales from the market size of collectible art. Therefore, we have subtracted the values of antiques, i.e. 19% of global sales, whereas stamps comprise only a small fraction of the sales (the value of which is not mentioned in the report), so it is safe to assume that it is negligible.

The market size for collectible art in 2016 then becomes:
$45 billion - 19% = $36.45 billion.

The market size increased by 1.7% as compared to 2015. Assuming the market size increased by the same growth rate in 2017 and the current year, i.e. 2018, the current market size can be calculated using the growth rate as follows:
Current market size = $36.45 billion x (1.017^2) = $37.7 billion.

Conclusion

The collectible art market size is valued at $37.7 billion and expected to grow at a growth rate of 1.7%. This value has been input into the attached spreadsheet.
Part
03
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Part
03

Collectibles Sub-Market - Wine Market Size

Although the current market size of collectible wine is not available publicly even after an extensive search, we have used the available information to triangulate an estimate. Based on an educated guess, we think the current size of the collectible wine market is not available because the current year, i.e. 2018, has just started and market size reports will be available later down the line.

The current estimated global market size of collectible wine is $24.23 billion. This value has been input into the attached spreadsheet, as instructed. Below is a detailed discussion of my methodology and findings.

Methodology/Considerations

As per our research, the terms 'fine wines' and 'collectible wines' have been used interchangeably in industry reports and by industry experts, as evident from the phrase: "Fine wine is now the best-performing collectible for the world’s wealthy collectors, with values having risen 25 percent over the past 12 months".

To assure that we have used credible sources to acquire information, we have used multiple sources of information and have cross-verified the data contained in them. For example, the two different sources from 'The Drinks Business' and 'Wine Spectator' report almost similar values for auction sales in 2015. Similarly, the information collected from 'South China Morning Post' was acquired from "The Knight Frank Luxury Investment Index".

We have used data from multiple sources to triangulate an estimate. We used values from 2015 and projected them to 2018 using different growth rates, as explained below.

Calculations

The fine wine market represented 5% of the global wine industry, which was worth $304 billion in 2015, which amounts to $15.2 billion (304 x 0.05).

The value of collectible wines increased by 61% during the five years ending in 2017, however, 2017 had an individual growth rate of 25%. Therefore, the average annual growth rate for four years before 2017 can be calculated as follows:
(61% - 25%) / 4 = 9%

Using this growth rate, the market size of collectible wine in 2016 can be calculated as follows:
$15.2 billion x 1.09 = $16.57 billion

The value of collectible wines increased by 25% during 2017. Using this growth rate, the market size of collectible wine in 2017 can be calculated as follows:
$16.57 billion x 1.25 = $20.71 billion

To calculate the current market size, we can use an average growth rate during the last two years. The average growth rate would be:
(25% + 9%) / 2 = 17%

Using this growth rate, the market size of collectible wine in 2018 can be calculated as follows:
$20.71 billion x 1.186 = $24.23 billion

Conclusion

The collectible wine market size is valued at $24.23 billion. This value has been input into the attached spreadsheet.
Part
04
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Part
04

Collectibles Sub-Market - Antiques Market Size

Although the market size of collectible antiques was not available publicly even after an extensive search, we have used the available information to triangulate an estimate. Based on an educated guess, we think the size of the collectible antiques market is not available because it is typically included in the entire fine arts market size. It does not appear to be broken out separately, as we were unable to find any research reports specifically on collectible antiques, even behind paywalls.

The current estimated global market size of collectible antiques is $8.84 billion. This value has been input into the attached spreadsheet, as instructed. Below is a detailed discussion of my methodology and findings.

LIMITATION

The TEFAF report states, "High-end artworks are selling through privately brokered sales to wealthy collectors, who are less willing to reveal their willingness to pay at auction openly", due to which the market size does not reflect these private sales.

Methodology

Although market size estimates were available from other sources, e.g. British Art Market Federation (BAMF) reported the UK market size and UK's global market share, which may have been used to calculate the global market size of art and antiques, none of them provided the percentage that antiques represented in the art and antiques market size. Therefore, we have used market size estimates from TEFAF (The European Fine Art Fair) due to the above and the following reasons:
1. TEFAF is considered to be a "bible for costs and trends in the world’s art market".
2. TEFAF included only those dealers in their market size estimation "who handle exclusively arts and antiques and did not include second-hand retailers", which aligned with our requirements of collectible art, i.e. rarity and/or popular demand. Furthermore, Rachel Pownall, the report author, said, "So, what is a ‘collectible’? If it’s something sold by an antique dealer, then OK, we included the sale; if it’s sold at a second-hand shop or a flea market, the sale was not included in the numbers".
3. The report states, "Many of the art dealers represented in this report and the art dealer survey fielded are aimed specifically to be as representative of the art and antique industry as possible. This results in trade above a minimum item value of $500", which also corresponds with the definition of collectibles.

Calculations

The size of the art and antiques market in 2016 was $45 billion, which grew at a year-over-year growth rate of 1.7% from 2015. Assuming the growth rate remains the same from 2016 to 2018, we can calculate the current market size of art and antiques in 2018 as follows:
$45 billion x (1.017^2) = $46.54 billion.

Antiques represented 19% of the overall art and antiques market in 2016 and the word "still", as found in the TEFAF report: "The fraction of antiques is still 19% of world sales", suggests that we can safely assume that it remained the same from 2016 to 2018. Therefore, we can calculate the current size of the antiques market in 2018 as follows:
$46.54 billion x 19% = $8.84 billion.

Conclusion

The collectible antiques market size is valued at $8.84 billion. This value has been input into the attached spreadsheet.
Part
05
of fifteen
Part
05

Collectibles Sub-Market - Jewelry Market Size

The global market size of collectible jewelry is estimated to be $31.13 million in 2018 and projected to grow to $40.63 million by 2022 at a CAGR of 6.9%.

Your requested information is also available for you in column B, row 6 of the attached spreadsheet.

Below you will find a deep dive of my findings.

GLOBAL MARKET SIZE

Allied Market Research reported that the global market size for collectible jewelry, also known as costume jewelry, was $25.6 billion in 2015 and projected to grow at a CAGR of 6.9% to $40.63 billion by 2022.

Using the CAGR for the years 2015 to 2022, i.e. 6.9%, I used the CAGR calculator to calculate the market size in 2018 to be $31.27 billion.

Costume jewelry is synonymous with vintage jewelry, generally accepted to be older than 20 years old. However, some collectors only consider jewelry from the 1960s and older to be vintage of costume jewelry.

Antique jewelry is at least 100 years old while period jewelry dates within the last 100 years. Antique jewelry can also be referred to as "estate jewelry", which has come to mean "used" jewelry. However, all these categories come under costume jewelry (20 years and older).

I also found the minor classification "contemporary collectible" jewelry, but this is only referenced by some collectors. Also, there were no existing market reports for contemporary collectible jewelry so I excluded it from my findings.

Outside of these categories, there only remains mass marketed imported jewelry which is not classified as vintage or collectibles.

Additional market information for the global costume jewelry market include the following findings:

Female buyers are expected to continue dominance until 2022.
The retail segment is expected to continue dominance over online sales until 2022.
Asia Pacific has the highest CAGR of 8.5% from 2016-2022.
Rings are projected as one of the most profitable costume jewelry segments.
Top investment pockets for costume jewelry are bracelets, necklaces and chains, earrings, and others.

US MARKET SIZE

I also researched the US market size for collectible costume jewelry as additional information. Persistence Market Research reported that in 2017, the US market for costume jewelry exceeded $13.5 billion. This is expected to grow to over $20.29 billion by 2024.

CONCLUSION

To wrap it up, the global market size for collectible jewelry is estimated to be $31.27 billion in 2018, projected to grow to $40.63 billion by 2022 at a CAGR of 6.9%.

Your requested information is also available for you in column B, row 6 of the attached spreadsheet.
Part
06
of fifteen
Part
06

Collectibles Sub-Market - Antique Cars Market Size


The global collectibles cars market, including those automobiles labeled as vintage, classic and antique, is $18,000,000,000.00 to $18,480,000,000.00 USD, with the US and UK making up a significant portion of the market. In a 2016 study, global classic car transactions (including private sales) were estimated at over $20,710,500,000.00 USD. A 2016 report suggests that the collectible antique car market is rapidly increasing, having expanded more than sevenfold since 2000.

Global

According to 2016 study by AXA Art Insurance, the global collectibles cars market, including those automobiles labeled as vintage, classic and antique, is $18,000,000,000.00 to $18,480,000,000.00 US. The study also found that global classic car transactions (including private sales) were estimated at over $20,710,500,000.00 USD.

US and UK

The US and UK markets make up a significant portion of the global collectible cars market: According to Leon Strümpher, a Portfolio Manager at Sanlam Private Wealth, the classic and antique car market in the UK is estimated at $7,590,000,000.00 USD, while the US classic and antique market is estimated at $1,000,000,000.00 USD (Ibisworld 2016).

Conclusion

In conclusion, the global antique collectible car market is more than $18,000,000,00.00 USD, with the US and the UK making up a large portion of the market. Global classic car transactions were estimated at $120,000,000,000.00 in 2014, and sources indicate that the market continues to expand. Please see the attached spreadsheet
Part
07
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Part
07

Collectibles Sub-Market - Coins Market Size

The global size for collectible antique coins was estimated to be between $5 billion and $8 billion annually. The US market size for collectible antique coins was estimated to be between $3.4 billion and $3.8 billion in 2017.

Your requested information is prepared for you in Column B, Row 8 of the attached spreadsheet.

Below you will find a deep dive of my findings.

US MARKET SIZE

According to the latest report by the Professional Numismatists Guild, the US market for rare coins in 2017 was estimated to be between $3.4 billion and $3.8 billion. This market size is for rare, historic coins selling for $50,000 or more as well as coins $500 called 'collector' coins. To maintain uniformity of findings in the spreadsheet, I encoded $3.6 billion as the median figure for the US collectible coin market size.

PNG President Barry Stuppler reported that "demand for extremely rare investor-collector coins rose in 2017" despite competition from the cybercurrency market.

Numismatic News also reported that the 2017 US market for collectible coins shrank from the PNG-projected $4 billion back in 2016. However, this was due to the natural fluctuation of the numismatics market, which has been around for over 150 years.

GLOBAL MARKET SIZE

The Economist reported in 2017 that global sales of rare collector coins were estimated between $5 billion and $8 billion annually. The article also noted that America has the lion's share of the market at 85%.

The Economist mentioned that the collectible coin market hinges on third-party graders. This is because coin value such as lustre, toning, friction-wear, etc. is usually imperceptible to the layman's eyes, allowing for potential fraud.

CONCLUSION

To wrap it up, the global size for collectible antique coins was estimated to be between $5 billion and $8 billion annually. Also, the US market size for collectible antique coins was estimated by the Professional Numismatists Guild to be between $3.4 billion and $3.8 billion in 2017.

Your requested information is prepared for you in Column B, Row 8 of the attached spreadsheet.
Part
08
of fifteen
Part
08

Collectibles Sub-Market - Comics Market Size

The global comic book market is worth $800 million. The US market accounts for roughly half of this market, generating $405 million annually from sales of comic books.

FINDINGS

GLOBAL MARKET

This article published by Time in November 2017, tell us that global comic book sales generate $800 million annually in print comics alone—this excludes graphic novels. These figures have surprised some industry experts, given that in general print is suffering at the hands of digital. I have added this data into the spreadsheet provided.

Overall, there limited data is available on the global market apart from market size. For example, IbisWorld only had an industry report on the US market, and Statista had no globally focused data.

Given that the US market represented over half of the global market, I have provided a few extra data points on the US market to understand the market in closer detail.

EXTRA INFORMATION

US MARKET

The US accounts for about half of the global comic market. This region generated $405 million in revenue from comic book sales in 2016. This market segment is also growing rapidly, showing 16% growth in 2016 and 23% growth in 2015.

The US market seems to be driving the global industry. "Since 2010, estimated sales of the top 300 comic titles have soared nearly 30 percent from 69.2 million copies to 89.4 million in 2016". In this region it is consumers in their 30s who are making most purchases.

In the US market, women are increasingly becoming interested in buying comic books. They are a growing consumer base, with one out of every three comic books sold in the last 12 months being purchased by a woman. In addition to this, 57% of all comics are bought by consumers who fit into the 13-29 age group. In the US, traditional comic shops have experienced declining sales, but there has been "remarkable growth in overall sales through traditional book retailers, including chains like Barnes & Noble, independent bookstores, online retailers, and mass market retailers like Target".

The two main market players are Marvel Comics who account for 39.06% of total comic sales, and DC Comics who account for 26.38% of sales. The next largest competitor is Image Comics who hold just a 7.6% share.

CONCLUSION

To sum up, I have found that the size of the global comic market is $800 million. The US represents over half of this market, generating $405 million in annual revenue. Within the US market, Marvel Comics account for 39.06% of all sales, followed by DC Comics who account for 26.38% of sales.
Part
09
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Part
09

Collectibles Sub-Market - Toys Market Size

The market size for collectible toys in the US is $1.8 billion. This figure has been provided in column B, row 10 of the attached spreadsheet. Collectible toys comprise of “fun and engaging basic and affordable collectibles, collectibles that have multiple play functions, as well as higher-priced licensed collectibles with intricate styling details for the most avid collectors and passionate fans.” Below, I will provide the definition for collectible toys, and US sales data for collectible toys in 2016 and 2017.

DEFINITION AND MARKET SIZE IN 2016

A collectible toy has a broader definition than “an item that is worth far more than it was originally sold for because of its rarity and/or popular demand.” Collectible toys comprise of “fun and engaging basic and affordable collectibles, collectibles that have multiple play functions, as well as higher-priced licensed collectibles with intricate styling details for the most avid collectors and passionate fans.” The types of collectibles include “non-strategic trade cards/collectible stickers, strategic trading card games, mini figures & scene sets, action figure collectibles & accessories, playset dolls & collectibles, blind packs as well as assorted brands that are collectible.”
According to global information company The NPD Group, collectible toy sales in the US grew by 33 percent to $1.8 billion in 2016. Collectibles represented 9 percent of the total toy sales in the US, which was $20.4 billion. Blind packs was one of the largest growth area within this category. Sales of blind packs grew by 60 percent in 2016.

AVAILABLE DATA FOR 2017

An extensive search did not reveal any credible data regarding the market size for collectibles in the US for the whole of 2017. The NPD Group had released 2017 mid-year data for the US and “global” data for the whole of 2017 only.
The collectible toy sales from January to June 2017 in the US was $819 million. If the sales are constant, the estimated sales for the full year would be around $1.6 billion. However, I have chosen not to provide this figure as sales of collectibles are driven by factors such as the “box office effect,” when sales of licensed products are tied to the box office of movies. Additionally, sales in the fourth quarter are also driven by the holiday season.
The “global” collectibles market size in 2017 was $3.9 billion. Please note that this figure only covers toy sales in the following 12 markets: Australia, Belgium, Canada, France, Germany, Italy, Mexico, Netherlands, Russia, Spain, United Kingdom, and the US. In 2017, the total toy market size in the US was $20.7 billion.

CONCLUSION

In conclusion, the total collectible toy sales in the US was $1.8 billion in 2016, and this figure has been provided in column B, row 10 of the attached spreadsheet. The collectible toy sales from January to June 2017 in the US was $819 million.

Part
10
of fifteen
Part
10

Collectibles Sub-Market - Stamps Market Size

Although the market size of collectible stamps was not available publicly even after an extensive search, we have used the available information to triangulate an estimate. As per an educated guess, we think that the size of the collectible stamps market is not available because it is typically included in the entire fine arts market size. It does not appear to be broken out separately, as we were unable to find any research reports specifically on collectible stamps, even behind paywalls. While we were able to find an old source from 2008 that does report the market size of collectible stamps, it does not correspond with TEFAF (The European Fine Art Fair) estimates, and therefore, we did not consider it to be credible enough to prioritize it over the TEFAF report, the reasons to which are given below.

The current estimated global market size of collectible stamps is $123,516,805. This value has been input into the attached spreadsheet, as instructed. Below is a detailed discussion of my methodology and findings.

METHODOLOGY

We have used the available stamp index of China from 2012 to triangulate an estimate for the current global market size of collectible stamps. For this, we projected the 2012 stamp index to the current year, i.e. 2018, by using the growth rate of the total sales volume of prints, precious books, and maps in China. Using the estimated 2018 stamp index of China and China's market share of the overall art and antique market in the world, we calculated the global market size of collectible stamps. These calculations are shown below (in the calculations section).

Although market size estimates were available from other sources, e.g. The Telegraph reports the market size to be £5 billion, we have used market size estimates from TEFAF (The European Fine Art Fair) due to the following reasons:
1. TEFAF is considered to be a "bible for costs and trends in the world’s art market".
2. The estimate (£5 billion) reported by The Telegraph was about 10 years ago (2008) and it does not agree, even remotely, with that found in the TEFAF report. Therefore, the superior credibility of TEFAF and the more recent report forced us to use TEFAF values instead of those reported by The Telegraph. Furthermore, the growth rate reported by The Telegraph for a broad collection of stamps during 10 years was 245%; if it is projected to the next 10 years, the value exceeds 12.25 billion in 2018 (£5 billion x 245%), which is highly unlikely as TEFAF reports the stamp market to constitute only a small fraction of the overall art and antique market.
3. The TEFAF report states, "Many of the art dealers represented in this report and the art dealer survey fielded are aimed specifically to be as representative of the art and antique industry as possible. This results in trade above a minimum item value of $500", which corresponds to the definition of collectibles.

4. Another estimate reported the US aggregate investment value to be $13 million for mint and $11 million for used stamps, which also closely agrees with the values found in the TEFAF report, as these are in millions and The Telegraph reported it to be in billions.

Calculations

China's stamp index reached $6,911,000 in 2012. Since growth rate for China's stamp index is not available, we assumed that it grew at a rate at which the market size of 'prints' grew in China. The growth rate of the total sales volume of 'prints, precious books, and maps' in China increased by 21.5% between 2015 and 2016.

Using this growth rate, China's current stamp index, i.e. for 2018, can be calculated as follows:
$6,911,000 x (1.215^6) = $22,233,025

China accounted for an 18% market share of the total art market size in 2016. Assuming that the market share of stamps is the same as that for the art market and stays the same from 2016 to 2018, the current stamp index for the world can be calculated as follows:
$22,233,025 / 0.18 = $123,516,805

To compare this with the overall art and antiques market size in order to show that the stamps market is, in fact, a small fraction, we calculate the current art and antiques market size using the 2016 market size ($45 billion) and projecting it to the current year, i.e. 2018, using the annual growth rate (1.7%) between 2015 and 2016.
Current size of art and antiques market = $45 billion x (1.017^2) = $46.54 billion.

The percentage of the estimated stamps market, as opposed to the overall art and antique market, can be calculated as follows:
$123,516,805 / $46,540,000,000 = 0.265%. This percentage corresponds with the "small fraction" that TEFAF reports the stamps market to be of the overall art and antique market size, which confirms our methodology and assumptions used for the calculations.

Conclusion

The collectible art market size is valued at $123,516,805 in 2018. This value has been input into the attached spreadsheet.
Part
11
of fifteen
Part
11

Collectibles Sub-Market - Art Fraud Rate

This brief presents an estimate of the most recent fraud rate for the global collectible art market in the third row of column C of this spreadsheet. To provide a bit of context to the estimate, this brief discusses the drivers of interest in collectibles, looks at enablers of fraud in the art industry and then calculates the fraud rate for the global collectible art market as presented in the accompanying spreadsheet.

Drivers of interest in collectibles

Interest in collectibles is primarily being driven by the increasing number of people getting involved with art and design. This rising interest spans across a number of "collectible categories" that include art and classic cars. According to an article in CNN Style, people are "looking at, writing about, making and buying art and design" at an unprecedented rate. Furthermore, people are being driven to invest in collectibles by rising "social, political and economic uncertainty."

Factors within the art industry that enable fraud

The opacity resulting from lack of regulation is cited as one of the key enablers of fraud in art markets, which can take the form of "forgeries, tax fraud, insurance fraud and money laundering." Furthermore, the decentralized nature of art markets makes it difficult to track transactions.

Another enabler of art fraud is the fact that law enforcement agencies tend to focus on art theft more than fraud. This happens because these agencies lack art crime specialists and find it easier to contend with thefts which are more straightforward to deal with. Uncovering proof of fraud in the form of "illegal price manipulation, collusion and kickbacks" is not only expensive but also hard.

The fraud rate for the global collectible art market

According to Interpol, "fraudulent activity in art and collectibles" was going to be more than $6 billion in 2016. Robert Wittman, former Federal Bureau of Investigations (FBI) special agent and founder of the FBI Art Crime Team, also put the global estimate of the "entire art crime industry" at $6 billion, but further suggested that "fraud, forgeries and fakes" actually constitute 80 percent of this figure.

Wittman's assessment is likely more credible because of his firsthand experience with tackling art crime and therefore serves as a more reliable guide to calculating the fraud rate for the collectible art market. The approximate rate of fraud for the global collectible art market can therefore be calculated by multiplying $6 billion by 80 percent to yield the following:

Fraud rate for the global collectible art market
= $6 billion x 0.8
= $4.8 billion

Conclusion

The fraud rate for the global collectible art market was approximately $4.8 billion in 2016. This figure represents the bulk, or 80 percent, of all crime in the art market.
Part
12
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Part
12

Collectibles Sub-Market - Antiques Fraud Rate

While there is no pre-existing information to fully answer your question, we've used the available data to pull together key findings: Interpol estimates 10% of the collectibles market as a whole is subject to fraud, but does not provide more information about individual sectors of the market (e.g., coins vs. art vs. antiques). In the case of antiques, much of the fraud comes from artificially aged souvenirs sold to tourists, which is nearly impossible to trace.
We have entered Interpol's 10% figure into the project spreadsheet. Below you'll find an outline of our research methodology to better understand why information you've requested is publicly unavailable, as well as a deep dive into our findings.

METHODOLOGY

We conducted a thorough search of professional sites, reports, news articles, and even blog posts. While this yielded a general answer (explained below), it also revealed a limitation in the public data: While details about the level of fraud can be found for subsets of the antiques/collectibles market and for the market as a whole, we were unable to locate a source which gives the fraud rate for antiques and which specifically excludes subsets like art, jewelry, coins, etc. Consequently, we must use the broadest possible estimate given by Interpol as explained below.

GLOBAL FRAUD RATE

According to Interpol, as cited in a Deloitte report on art and other collectibles, approximately one-tenth of the overall art and collectibles market is subject to fraudulent activity. The report did not provide further elaboration by separating art from other collectibles, let alone separating collectibles into other subsets (cars, coins, etc.). Therefore, we have used 10% for the global fraud rate in the project spreadsheet.

CONTEXT FOR THE AMBIGUITY

According to Myrna Kaye's book, "Fake, Fraud, or Genuine: Identifying Authentic American Antique Furniture" (written in 1987, but still being cited in 2017), while there are cases where fraudulent antiques have been created from scratch, there are far more common scams: creating a new object from the material of one or more genuine antiques, modified or repaired antiques that have been changed so much that they have lost their original value, and replacing part of an antique with a much newer piece. Not all of these constitute deliberate attempts to defraud anyone; they are simply restoration techniques which later buyers of the item in question may be unaware of.
There are instances in which overly-ambitious scam artists have been arrested for passing off replicates as genuine antiques, such as the arrest of two "Paris-based experts in 18th century furniture," who allegedly sold "two fake chairs out of a batch of four to the Chateau at Versailles, home of Louis XIV, for €1.7m (£1.3m)." However, it is far more common to purchase a fraud when traveling overseas, as the Tourist Scams site notes: "For example, brand-new ceramic pottery can be treated with a chemical substance to make it look like it’s hundreds of years old, and a few cracks and chips help to convince the unsuspecting tourist even more about the authenticity of this antique piece of pottery."
So often, these alterations or outright fabrications go unchallenged because many would-be antique collectors are simply looking for something that will look nice in their home and serve as a conversation piece, rather than investing money with the intent of earning a profit. It's only if and when they attempt to sell the "valuable" antique that the fraud is detected.

CONCLUSION

While we have used Interpol's 10% figure for the project spreadsheet, our summary above shows why more precise figures are not available. We conclude that the lack of better estimates on the prevalence of antique fraud, even from Interpol, is due to two factors: First, the unknowable number of undetected and/or unprosecuted cases; and second, the question of whether any given replica or restored piece was advertised falsely or was simply misidentified by its current owner.

Part
13
of fifteen
Part
13

Collectibles Sub-Market - Jewelry Fraud Rate

Global fraud is a major threat to manufacturers, retailers, and purchasers/collectors of valuable objects the world over. This is particularly true of collectible jewelry, as jewelry and watches account for more of the value of counterfeit sales than any other category. We have estimated that the global value of fraudulent collectible jewelry is about $4.05 billion. In this report I'll first summarize the calculations behind that estimate, which has been added to column C row 6 of the spreadsheet, and then provide some broader information about global collectible jewelry fraud.

global fraud rate

Unfortunately, crime statistics about jewelry fraud do not break down the value of the jewelry by category. We examined data on seized counterfeits coming into both the US and the EU, as well as global fraud reports and reports from the Jewlers Security Alliance, however none provide data on fraud specifically within the collectible category. For this reason, it is necessary to first estimate the rate of fraud for jewelry in general, and then apply that rate to collectible jewelry.

Research from the Organization for Economic Cooperation and Development in collaboration with the European Union Intellectual Property Office (EUIPO) has found that the global value of counterfeit jewelry sold globally in 2016 (the most recent year for which figures are available) was $40.9 billion. In that same year, the total value of all jewelry sold globally was $316 billion. This means that the global fraud rate for jewelry is about 12.94%.

Based on the research from another brief, as recorded in the spreadsheet, the global market for collectible jewelry is worth about $31.27 billion. If we assume that the fraud rate for collectible jewelry is about the same as for the global jewelry market as a whole, this means that the total value of fraudulent collectible jewelry sold per year is about $4.05 billion.

global jewelry fraud

Though 12.94% seems like quite a high rate, the figure is even higher for the fastest growing portion of the global jewelry market - online sales. According to the Global Fraud Index, 13.27% of online jewelry sales in 2017 were fraudulent, an increase of 12.8% from the year before.

Moreover, the economic impact of jewelry fraud is quite devastating. Research from the European Union Intellectual Property Office (EUIPO) shows that jewelry and watch fraud in the EU has caused a 13.5% depression of sales - an economic loss worth about 1.9 billion euros, and 15,000 jobs.

conclusion

Based on our estimates, the global fraud rate for collectible jewelry is about 12.94%, which means that the dollar value of the fraudulent collectible jewelry market is about $4.05 billion, as is noted in the spreadsheet.















Part
14
of fifteen
Part
14

Collectibles Sub-Market - Coins Fraud Rate

Although we were unable to find data on the fraud rate for the global collectible coin market specifically, we determined that the fraud rate is probably between 6.86% and 14.62%. We have entered our findings in the attached spreadsheet. Below, you will find details on how we arrived at the above estimates.

METHODOLOGY AND DEEP DIVE

After searching industry reports, media reports, and market analysis extensively, we were unable to find any estimate on the fraud rate in the global collectible coin market specifically. The reason the data is unavailable is probably due to the fact that such studies have not yet been carried out for the collectible coin industry specifically. However, we found estimates and data from broader industries with which we were able to come up with an estimate.
First, we found a report on the 2017 Global Fraud Index that covers 8 industries and is based on analysis of fraud on e-commerce merchants in industries. The industries covered include Alcohol, Tobacco, and Cannabis; Apparel; Cosmetics and Perfumes; Consumer Electronics; Department Stores; Health, Leisure & Hobbies; Furniture and Home Improvement; and Jewelry & Precious Metals. The fraud rate across all the categories in the second quarter of 2017 is 3.85%, an increase from 3.64% recorded in the second quarter of 2016.
According to the report, the Jewelry and Precious Metals category includes "designer and personalized jewelry of varying values, luxury watches, precious metals and coins for collectors." This clearly shows that collectible coins are part of this category. The fraud rate in the category is given as 14.62% for the second quarter of 2017, an increase from 10.70% recorded in the second quarter of 2016. However, even if we assume the above fraud rate is applicable to collectibles coin specifically, the limitation is that the fraud rate based on e-commerce data may not be the same on offline channels where collectible coins are still sold.
Secondly, we also found Fraud Magazine's special report into the fraud in the collectible art and antique market in 2016 (only 2016 data is available). According to the report, the collectible art market was worth about $70 billion in 2016, and according to Robert Wittman, former FBI special agent and founder of the FBI Art Crime Team, the entire global art crime is valued at $6 billion, 80% of which is due to fraud. That would mean that $4.8 billion (80% * $6 billion) is due to fraud. That would also mean that the fraud rate in the collectible art and antique industry is 6.86% ($4.8 billion/$70 billion * 100). Therefore, if we assume that the fraud rate in the collectible arts and antique industry is similar to that in the collectible coin industry, we will have that the fraud rate in the collectible coin market is also 6.86%.
Both the first and the second data discussed above have their limitations since the data isn't about collectible coins specifically but a broader segment. However, the estimate provided by the Global Fraud Index may be more reliable given that collectible coins are mentioned explicitly in their report, showing that the industry was specifically analyzed. However, given that the Global Fraud Index relies only on e-commerce data, we have provided both estimates.
Hence, the fraud rate in the collectible coin market is between 6.86% and 10.70% based on 2016 data reported in Fraud Magazine and Global Fraud Index report. But based on 2016 data from Fraud Magazine (the only data available) and 2017 data from Global Fraud Index, the fraud rate for the collectible coin market globally is between 6.86% and 14.62%. We have reported the later in the attached spreadsheet because it contains a more recent data.

CONCLUSION

To wrap up, although we were unable to find the fraud rate for the collectible coin market specifically, we determined that the fraud rate is between 6.86% and 14.62%. The data has been entered into column C, row 8 of the attached spreadsheet.

Part
15
of fifteen
Part
15

Collectibles Sub-Market - Toys Fraud Rate

Although we were unable to find the fraud rate in the collectible toys market globally, we estimated that the fraud rate is about 6.86%. We have also entered the detail in row 10, column C of the attached spreadsheet. Below, you will find more details about our estimate.

METHODOLOGY AND HELPFUL FINDINGS

After an extensive search through industry reports, market and media reports, we were unable to find data on the fraud rate for the collectible toys market. The reason for the unavailability of data is probably because research or investigations focusing on the fraud rate in the collectibles toys industry has not yet been carried out. In addition, according to the New York Times, the distinction between collectibles toys and collectible arts is not always clear cut although everyone agrees they are collectibles.
In a Fraud Magazine special report on the fraud in the collectible industry, Robert Wittman, former FBI special agent and founder of the FBI Art Crime Team, stated that the entire crime in the collectible art industry in 2016 was about $6 billion globally and 80% of that was due to fraud. That means that $4.8 billion (80% * $6 billion) was due to fraud. It's important to note that Wittman stated that the FBI works on fraud on arts and antiquities in general (which may also include collectible toys given that the distinction is not always clear cut according to the New York Times), so the figure quoted is unlikely to be just for collectible arts.
In addition, Fraud Magazine notes that the collectibles art market "has evolved into a new asset class, involving participants across multiple sectors of the economy with total global transactions estimated at up to $70 billion each year." As already stated above, $6 billion of the market is due to crime and $4.8 billion (80% * $6 billion) is due to fraud. That would mean that 6.86% of the market value is due to fraud ($4.8 billion/$70 billion * 100).
Hence, assuming the above percentage is also true for the collectible toy industry, the fraud rate in the collectible toys industry would also be 6.86%.
In terms of dollar value, NPD estimates that the global collectible toys market is worth $3.9 billion in 2016, about 8% of the total toys industry. If we apply the 6.86% fraud rate to the collectibles toys industry, it would mean that $267.54 million (6.86% * $3.9 billion) is due to fraud.
We also came across a Global Fraud Index report for 2017 you may find useful. The report details the fraud rate across the following 8 industries: Alcohol, Tobacco, and Cannabis; Apparel; Cosmetics and Perfumes; Consumer Electronics; Department Stores; Health, Leisure & Hobbies; Furniture and Home Improvement; and Jewelry & Precious Metals.
According to the report, the fraud rate across all industries in the second quarter of 2017 is 3.85%, an increase from 3.65% recorded in the second quarter of 2016. Although there is no mention in the report that they looked at the collectibles industry, the collectible toys industry will probably fall under the Health, Leisure & Hobbies category given that Toys R Us was mentioned in that section of the report. The fraud rate for Health, Leisure & Hobbies segment is given as 6.67% in the second quarter of 2017, a decrease from 8.6% recorded in the second quarter of 2016.

CONCLUSION

To wrap up, we were unable to find data on the fraud rate for the collectible toys industry specifically, however, if we assume that the fraud rate would be similar to that in the collectible arts and antique industry, the fraud rate in the collectible toys industry would be about 6.86%. The data has been entered into column C, row 10 of the attached spreadsheet.
Sources
Sources