Beware of Beckett!

[55koufax]

I was never aware of this (my own stupidity) before I decided to try Beckett for grading cards for the first time after only doing bulk subs with PSA for 15 years.
In August 2020 I shipped them over 850 cards with the agreement they would match PSA at the time and give me a bulk rate price of $8 per. Fair enough. What I did not understand is that they charge for their services IN FULL well in advance of any service being performed (other than logging cards in and sticking them on the rear of some shelf). Over six months ago they charged my AMEX IN FULL to the tune of $7,300. Waiting over 19 months since they received my cards for something to pop. Still zero. I contacted my rep several times over the this long haul, each and every time getting nothing but apologies, however, when I called them out for collecting funds over six months in advance and still not one card has been graded, he offered this " We charge the cards ahead of time so that when the order does get to labeling there is no holdup in processing. An order can not get through labeling unless it has been paid for." Anyone else had or having this experience?

[rjackson44]

jesus james 850 cards wow

[Snapolit1]

Waiting over 19 months to get cards back . . . I can't imagine. I just can't.

[Bobbycee]

Ask for your money back ASAP. Send your cards to SGC.

[Rich Klein]

19 months is a long time but in Beckett's defense on charging cards earlier -- let me remind you of the Marx Card debacle earlier this year with PSA

https://www.sportscollectorsdaily.co...or-bankruptcy/

I get the card should be charged closer to when the cards are, you know, graded. But the TPG's have to protect themselves as well and the Marx card story was a heck of a wake up call

Rich

[bobbyw8469]

Originally Posted by Rich Klein

19 months is a long time but in Beckett's defense on charging cards earlier -- let me remind you of the Marx Card debacle earlier this year with PSA

https://www.sportscollectorsdaily.co...or-bankruptcy/

I get the card should be charged closer to when the cards are, you know, graded. But the TPG's have to protect themselves as well and the Marx card story was a heck of a wake up call

Rich

The Marx card debacle was on them and NOT PSA. They were the ones accepting money up front and instead of putting it in escrow, they spent it like it was theirs!!! The money WAS NOT theirs!! It was earmarked to go to PSA.

[drcy]

The upfront payment is fine. The 19 months wait is not. That's closing in on two years! I know of the waits in card grading, but in any other industry these delays would result in lawsuits and perhaps even State Attorney General intervention. It's bordering on that this almost isn't a legitimate business model.

[55koufax]

Somehow I missed this Marx debacle....

That said, with all the changes in this industry, bulk rate submissions are history.

Looks like there is an opening for a grading company who is willing to service bulk rate clients.

[BobC]

Originally Posted by Rich Klein

19 months is a long time but in Beckett's defense on charging cards earlier -- let me remind you of the Marx Card debacle earlier this year with PSA

https://www.sportscollectorsdaily.co...or-bankruptcy/

I get the card should be charged closer to when the cards are, you know, graded. But the TPG's have to protect themselves as well and the Marx card story was a heck of a wake up call

Rich

Wow! Wasn't aware of this till just now reading that link. As others have noted, Marx was in a sort of fiduciary capacity in that they collected grading fees on behalf of customers, which was never their money. They were also paid their service fees, up front in most cases apparently, which should have been the only money they were using to cover their ongoing costs. So, I would hope that bankruptcy be damned, and that the Marx owner(s) can be held personally liable to some extent for those customer's grading fees they should have never spent.

Probably the way the customer contracts/agreements are worded will be vague enough, or otherwise worded, to get them out of any normal personal liability for the bankrupt company's debts though. This is assuming of course that the company was set up in such a way that it afforded personal liability protection to the owner(s) in the first place.

Regardless, glad to hear that PSA stepped up and will not charge the customers the grading fees they had already paid to Marx. I wonder if the old, publicly held, PSA would have been so generous? A few very well off, private owners getting together to make such an image positive decision is one thing. Getting thousands and thousands of shareholders to think that is the right thing to do is quite another though.

[Jay Wolt]

Originally Posted by Bobbycee

Ask for your money back ASAP. Send your cards to SGC.

He paid $7300. at $8 each for his +850 cards
W/ SGC's $30 cost, it would cost him in excess of $25,500
Either way, its a tough pill to swallow

[mrreality68]

Originally Posted by Jay Wolt

He paid $7300. at $8 each for his +850 cards
W/ SGC's $30 cost, it would cost him in excess of $25,500
Either way, its a tough pill to swallow

+ 1 agreed.

Huge price difference but super long wait

[glchen]

Originally Posted by Jay Wolt

He paid $7300. at $8 each for his +850 cards
W/ SGC's $30 cost, it would cost him in excess of $25,500
Either way, its a tough pill to swallow

I know it's difficult, but I'm of the opinion that the OP should just continue to wait even if it's another year before he sees his cards back (after they are graded). The $8/card grading fee is most likely a thing of the past, and I wouldn't be surprised if it's at least $15/card in the future. I completely understand that it's very difficult to continue waiting but hopefully the value of the cards at Beckett has appreciated in the meantime.

[doug.goodman]

Hahahahahahahahahahahaha

I love the opinion sellers, they are always worth a laugh

[Rich Klein]

Originally Posted by bobbyw8469

The Marx card debacle was on them and NOT PSA. They were the ones accepting money up front and instead of putting it in escrow, they spent it like it was theirs!!! The money WAS NOT theirs!! It was earmarked to go to PSA.

Bobby:

With all due respect, even Nat Turner said this was a wake up call for PSA about how to process payments and when to process payments. So it actually was on PSA but going forward a situation such as that would not be on PSA

This is the statement made by PSA after the fact

This is an unfortunate incident and our top priority is protecting the collectors who may have been impacted by the bankruptcy of Marx Cards. We are currently requesting detailed account information from Marx Cards for the impacted orders still at PSA with the expressed goal of returning cards to their rightful owners as soon as possible. We will not be charging customers for the return of their cards, other than shipping. As of yet we have not received payment from Marx Cards to grade the cards in our possession and as a result of this incident, we will be making changes to our group submitter requirements, including a new order upfront deposit and more robust policies around late payments. We will also be requiring all group submitters to bring their accounts current in order to continue service with us. We ask for patience while we sort through this expensive and labor intensive process with the end goal being the return of cards to their rightful owners.

If you have submitted cards to Marx Cards that you believe to be at PSA, please email curielj@collectors.com with “Marx Cards” in the subject line.

[Leon]

Originally Posted by Rich Klein

Bobby:

With all due respect, even Nat Turner said this was a wake up call for PSA about how to process payments and when to process payments. So it actually was on PSA but going forward a situation such as that would not be on PSA

This is the statement made by PSA after the fact

This is an unfortunate incident and our top priority is protecting the collectors who may have been impacted by the bankruptcy of Marx Cards. We are currently requesting detailed account information from Marx Cards for the impacted orders still at PSA with the expressed goal of returning cards to their rightful owners as soon as possible. We will not be charging customers for the return of their cards, other than shipping. As of yet we have not received payment from Marx Cards to grade the cards in our possession and as a result of this incident, we will be making changes to our group submitter requirements, including a new order upfront deposit and more robust policies around late payments. We will also be requiring all group submitters to bring their accounts current in order to continue service with us. We ask for patience while we sort through this expensive and labor intensive process with the end goal being the return of cards to their rightful owners.

If you have submitted cards to Marx Cards that you believe to be at PSA, please email curielj@collectors.com with “Marx Cards” in the subject line.

Rich, 19 months is too long to hold someone's money. There is no defense for that. It's just wrong.
.

[Rich Klein]

Originally Posted by Leon

Rich, 19 months is too long to hold someone's money. There is no defense for that. It's just wrong.
.

Leon:

I think I implied that 19 months was too long. Yes no argument from me on that. Just pointing out the danger of not charging a card or getting payment in advance. I think I even said, the payment should be closer to, you know, when the card gets graded. I think in today's world a good time frame is about6 months out and that should by the end of the year be a normal time frame.

[Dead-Ball-Hitter]

Originally Posted by Leon

Rich, 19 months is too long to hold someone's money. There is no defense for that. It's just wrong.
.

Agreed, think of how much your collection/investment might be impacted. How could you run a little (or large) side business in collectables without having an inventory to churn? How can you pay for services two years ahead of when the service is actually performed, and not have a way to recover that expense in the meantime by selling, if that's your desire? Not to mention the many market fluctuations caused by economic upheaval, the fickle investing public, and potentially unrealized performance (of any newer players).

Folks might consider going to SGC. Right now they continue to be the only ones honoring the service level times.

[Leon]

Originally Posted by Rich Klein

Leon:

I think I implied that 19 months was too long. Yes no argument from me on that. Just pointing out the danger of not charging a card or getting payment in advance. I think I even said, the payment should be closer to, you know, when the card gets graded. I think in today's world a good time frame is about6 months out and that should by the end of the year be a normal time frame.

Holding someone's money for 6 months is wrong too. They should have to pay interest on it! How about 60 days? And to me that is being very lenient.
.

[55koufax]

Holding someone's money for 6 months is wrong too. They should have to pay interest on it! How about 60 days? And to me that is being very lenient.

Bingo! When I submitted, I was told that they were soon to be no longer accepting any bulk rate subs, and they would need about 12 months to complete. At no time was it disclosed they would charge me in full six months in advance of completion. 6 months is soon to be 7 months.

Prepaying for their services 30 days in advance of completion is reasonable. If I owned a service oriented business, I would never expect payment any sooner than that.

My guess is if I contacted AMEX and advised that Beckett charged my card $7,500 6.5 months ago for services still not performed and delivered, they would contact Beckett and reverse the charges.

[BobC]

Originally Posted by Rich Klein

Bobby:

With all due respect, even Nat Turner said this was a wake up call for PSA about how to process payments and when to process payments. So it actually was on PSA but going forward a situation such as that would not be on PSA

This is the statement made by PSA after the fact

This is an unfortunate incident and our top priority is protecting the collectors who may have been impacted by the bankruptcy of Marx Cards. We are currently requesting detailed account information from Marx Cards for the impacted orders still at PSA with the expressed goal of returning cards to their rightful owners as soon as possible. We will not be charging customers for the return of their cards, other than shipping. As of yet we have not received payment from Marx Cards to grade the cards in our possession and as a result of this incident, we will be making changes to our group submitter requirements, including a new order upfront deposit and more robust policies around late payments. We will also be requiring all group submitters to bring their accounts current in order to continue service with us. We ask for patience while we sort through this expensive and labor intensive process with the end goal being the return of cards to their rightful owners.

If you have submitted cards to Marx Cards that you believe to be at PSA, please email curielj@collectors.com with “Marx Cards” in the subject line.

Rich,

This PSA statement seems to indicate they are now looking to simply return ungraded cards to Marx customers, and only charge them a return shipping fee. However, in that Sports Collectors Daily article you earlier provided the link to, it pretty clearly stated in that article that, I quote, "PSA has pledged to complete the process of grading the thousands of cards collectors had sent to Marx at no cost". That reported statement doesn't seem to jive exactly with the PSA one you just posted. So, is the SCD article full of crap or am I misinterpreting something?

In an earlier post I was lauding the now privately owned PSA for doing such a great thing, based on that article, and wondering if the former publicly traded PSA would have been so benevolent. It seems my earlier post and question may now be mute. Hmmmm!

[Rich Klein]

I think one of the confusing aspects was one of the vendors who used Marx Cards as their group submitter flew out to PSA and on his own dime paid (for a second time) to get those cards graded by PSA.

I'm not sure what the conclusion of this saga was but I do feel comfortable in saying everyone goofed up in this but PSA by not processing a payment ended up with collectors in a precarious position not of their own choice.

[bobbyw8469]

I repeat....the fault lies with Marx cards collecting money and not escrowing it to pay PSA. They HAD to have known that bill was going to come due. Instead, they chose to treat the money as their own personal piggybank. That was 100% on them. I do group subs here. Granted, not on the scale that they do. But the money I collect, is NOT spent on fancy dinners out. It is earmarked for PSA. Marx Cards sounds like a hack operation.

Originally Posted by Rich Klein

I think one of the confusing aspects was one of the vendors who used Marx Cards as their group submitter flew out to PSA and on his own dime paid (for a second time) to get those cards graded by PSA.

I'm not sure what the conclusion of this saga was but I do feel comfortable in saying everyone goofed up in this but PSA by not processing a payment ended up with collectors in a precarious position not of their own choice.

[sreader3]

PSA recently charged me upon order login for a $1K fee autograph encapsulation order.

They somehow differentiated autograph authentication from card grading.

The distinction did not make much sense to me.

So it is not just Beckett.

[Tabe]

Originally Posted by bobbyw8469

I repeat....the fault lies with Marx cards collecting money and not escrowing it to pay PSA. They HAD to have known that bill was going to come due. Instead, they chose to treat the money as their own personal piggybank. That was 100% on them. I do group subs here. Granted, not on the scale that they do. But the money I collect, is NOT spent on fancy dinners out. It is earmarked for PSA. Marx Cards sounds like a hack operation.

PSA has fault in this as well. They knew there were issues with Marx and continued to endorse them as a group submitter.

[BobC]

Originally Posted by 55koufax

I was never aware of this (my own stupidity) before I decided to try Beckett for grading cards for the first time after only doing bulk subs with PSA for 15 years.
In August 2020 I shipped them over 850 cards with the agreement they would match PSA at the time and give me a bulk rate price of $8 per. Fair enough. What I did not understand is that they charge for their services IN FULL well in advance of any service being performed (other than logging cards in and sticking them on the rear of some shelf). Over six months ago they charged my AMEX IN FULL to the tune of $7,300. Waiting over 19 months since they received my cards for something to pop. Still zero. I contacted my rep several times over the this long haul, each and every time getting nothing but apologies, however, when I called them out for collecting funds over six months in advance and still not one card has been graded, he offered this " We charge the cards ahead of time so that when the order does get to labeling there is no holdup in processing. An order can not get through labeling unless it has been paid for." Anyone else had or having this experience?

It just occurred to me what a crock of BS this answer you got is. If they have your credit card to charge, they could have simply waited till the order was ready to go to labeling and then run the charge through. It doesn't take hours or days to successfully run a credit card charge through, just a few minutes or so, at most. So in truth, there is no delay, unless they honestly believe that holding your money for 6 months or more is a perfectly justifiable reason for them not having maybe a 5 minute or so delay to run your CC through prior to the labeling. What they told you their reasoning was for charging you so many months in advance of finally doing the work you have been waiting for them to do is a blatant, bald-faced, BS lie.

It does however improve their cash flow, and also allows them to now invest your money they are holding and earn interest off of it. And we have all seen and heard how interest rates look like they may be starting to rise. Although not necessarily a huge revenue source for them, it is still your money that you could be earning some interest income on, or at least not incurring CC interest charges on, instead. Hell, even the federal government pays you interest when they take too long to get you your tax refund. Why should any TPG have a preferential interest or advantage over our own federal government?

And now, TPGs may use this Marx case to further justify collecting even more money, even farther in advance of them performing the work they are supposed to do. If anything, this actually works to de-incentivize them to hurry up and get people's cards back to them. What's their rush, they already have your cards, and now your money. You can't suddenly do something else or go anywhere else. At least not without it likely costing you even more.

[FrankWakefield]

Think of the cards that could be bought with the money spent on getting cards graded. And add to that pile of cards a vacuum in your consciousness where the angst, worry, anticipation, and frustration associated with dealing with the card graders once was.

Or think about fewer cards and more anxiety and stress...


If any of the big graders with slab machines offered to come to my home, at my convenience, sit in the back yard with me and all of my cards and stuff, and to grade everything I could put before them, right there on the spot, and it'd take 30 minutes to get it done, all for a fee of $5... I'd decline that offer. I value my 30 minutes and my $5 bill more that their plastic and opinions.

I cannot comprehend you guys paying PSA or SGC thousands of dollars. And I'm sure my thought processes or lack thereof don't make sense to some of you.


I have a T206 Cy Young in an SGC slab that I've not broken out. The slip says it's a Sweet Caporal, but when the slab is flipped over there's a blue Piedmont back. Did they just screw up and check they wrong box on one of their forms? Or are two cards stuck together? Or what?? If I had bought that card ungraded then I'd know what I have. With it in the slab I'm not sure of what I have there. And I'm not sure about you guys spending thousands of dollars or more for someone else's opinion of what you have.

Maybe next time you're thinking of sending a bunch of cards somewhere to be graded, get more clarity of how they will bill you at varying stages, or take that grading money and buy a few more cards (cards you'll get in hand way sooner than a grading company could be done with you).

[Snowman]

Originally Posted by doug.goodman

Hahahahahahahahahahahaha

I love the opinion sellers, they are always worth a laugh

Yep, pretty funny. Perhaps almost as funny as the raw-only sellers...

"My Hank Aaron RC is NM-MT! I'll take $85k for it please."

"But it's not graded. Is there something wrong with it? Why isn't it graded?"

"Grading is a SCAM! That'll be $85k please."

"I love the card, but I just can't offer you graded prices for a raw card, I'm sorry. Best I can do is $4,225."

[T205 GB]

Originally Posted by FrankWakefield

If any of the big graders with slab machines offered to come to my home, at my convenience, sit in the back yard with me and all of my cards and stuff, and to grade everything I could put before them, right there on the spot, and it'd take 30 minutes to get it done, all for a fee of $5... I'd decline that offer. I value my 30 minutes and my $5 bill more that their plastic and opinions.

Frank there are some companies out there that will just add a diamond or purple sticker to your top loaders and make them just as valuable as graded cards lol.

I am of the same opinion that no grading company is worth using but its unfortunate that its the only way to max profits on some cards. No one in the hobby wants an honest grading company. Without dishonesty there is no money to be made.

[CurtisFlood]

Originally Posted by Rich Klein

19 months is a long time but in Beckett's defense on charging cards earlier -- let me remind you of the Marx Card debacle earlier this year with PSA

https://www.sportscollectorsdaily.co...or-bankruptcy/

I get the card should be charged closer to when the cards are, you know, graded. But the TPG's have to protect themselves as well and the Marx card story was a heck of a wake up call

Rich

Wow Rich! Marx must have been doing a lot of skimming.

[Exhibitman]

"Marx, which had been approved by PSA as a group submission outlet, indicated it had taken in over $954,000 in 2020, had $4.4 million in revenue during 2021 but because of its debts, ran out of money in August."

"the company says the suspension of PSA’s lower cost services last year resulted in a disruption of its revenue. After ramping up its business in 2020 including the opening of a storefront, Marx says it “was in so much debt that all revenues were being absorbed by the daily and weekly payments to merchant banks which made loans to the business.”

"In the bankruptcy documents, Marx blamed PSA’s 2021 shutdown of most service levels on much of its troubles, but also cited another business’ failure to pay some $60,000 it was owed and two bookkeepers it hired. In its filing, Marx indicated the bookkeeper paid herself about $50,000 more than the $48,000 per year salary she was supposed to receive. Both of the company’s bookkeepers left their jobs in November of last year. It also says a customer failed to pay a $60,000 debt to the company related to card grading."

So, gross revenue quadrupled but a $110K loss ate the customer money? Suuure. The Marx guys should be going to jail for theft for what they did. Lots of businesses get money from customers in advance. Whether you call it a deposit or a retainer or an advance, it is still money paid in trust for a service. That money should have been there held in a segregated account regardless of the company's financial woes. Instead, it sounds like Marx treated it like a piggy bank and in effect ended up running a ponzi scheme.

[SAllen2556]

Originally Posted by BobC

It just occurred to me what a crock of BS this answer you got is. If they have your credit card to charge, they could have simply waited till the order was ready to go to labeling and then run the charge through. It doesn't take hours or days to successfully run a credit card charge through, just a few minutes or so, at most. So in truth, there is no delay, unless they honestly believe that holding your money for 6 months or more is a perfectly justifiable reason for them not having maybe a 5 minute or so delay to run your CC through prior to the labeling. What they told you their reasoning was for charging you so many months in advance of finally doing the work you have been waiting for them to do is a blatant, bald-faced, BS lie.

It does however improve their cash flow, and also allows them to now invest your money they are holding and earn interest off of it. And we have all seen and heard how interest rates look like they may be starting to rise. Although not necessarily a huge revenue source for them, it is still your money that you could be earning some interest income on, or at least not incurring CC interest charges on, instead. Hell, even the federal government pays you interest when they take too long to get you your tax refund. Why should any TPG have a preferential interest or advantage over our own federal government?

And now, TPGs may use this Marx case to further justify collecting even more money, even farther in advance of them performing the work they are supposed to do. If anything, this actually works to de-incentivize them to hurry up and get people's cards back to them. What's their rush, they already have your cards, and now your money. You can't suddenly do something else or go anywhere else. At least not without it likely costing you even more.

The problem is you can't rely on a credit card being good 6 months after you have the number in hand. I run credit cards often, and in today's world, people's credit cards are flagged for fraud much more frequently than in the past. If I had a big order I'd feel like I had to run the card now and not risk the chance of the card not being good 6 months from now. It might not even be legal to run a credit card 6 months after you get the number, or at the very least, ok with the credit card company. Even as a customer, I wouldn't feel comfortable having a company keep my credit card number around for 6 months before running it.

[D. Bergin]

Originally Posted by SAllen2556

The problem is you can't rely on a credit card being good 6 months after you have the number in hand. I run credit cards often, and in today's world, people's credit cards are flagged for fraud much more frequently than in the past. If I had a big order I'd feel like I had to run the card now and not risk the chance of the card not being good 6 months from now. It might not even be legal to run a credit card 6 months after you get the number, or at the very least, ok with the credit card company. Even as a customer, I wouldn't feel comfortable having a company keep my credit card number around for 6 months before running it.

Well if Beckett or PSA or whoever has a business model in which it takes nearly 2 years for them to grade a submission of cards, they should institute a practice in which they have to contact a customer and double check their Payment method, just before the cards enter the actual grading process.

There's no reason why anybody should have to pay for any service that far ahead of the actual service being performed, beyond a minimal deposit.

I understand that some submitters do actually do this voluntarily when submitting through a bulk service in order to save a few bucks, entrusting the submission service to actually be responsible with their money when the time comes for their cards to actually be graded.

I don't get it...but I do understand it.

[Deertick]

Originally Posted by Snowman

Yep, pretty funny. Perhaps almost as funny as the raw-only sellers...

"My Hank Aaron RC is NM-MT! I'll take $85k for it please."

"But it's not graded. Is there something wrong with it? Why isn't it graded?"

"Grading is a SCAM! That'll be $85k please."

"I love the card, but I just can't offer you graded prices for a raw card, I'm sorry. Best I can do is $4,225."

I think the point is that the card hasn't changed whether it is entombed or not. With the exception of $0.17 of plastic, the cards value is the same. Like it or not, the premium assigned is due to laziness, lack of knowledge, and /or the need for affirmation.

Comparable to an appraisal for my grandfather's ring. I will never sell it, but an heir might. The insurance company required pictures, measurements, and a description. The accompanying piece of paper changes nothing in regards to it's value. But the size of the stone, weight of the gold, age, etc. has now been defined for my ignorant ass and for my lazy kids.

Or maybe a bucket of dirt with a pound of gold in it. Separate and melt into a bar and, voila! You have a more marketable item that will sell for more than it's intrinsic value.

Disclosure: I once refused a free PSA service at a card show. I have never submitted to a grader (as yet). I have had less than a dozen in my possession for a very short period of time. I have probably held less than two dozen.

[BobC]

Originally Posted by SAllen2556

The problem is you can't rely on a credit card being good 6 months after you have the number in hand. I run credit cards often, and in today's world, people's credit cards are flagged for fraud much more frequently than in the past. If I had a big order I'd feel like I had to run the card now and not risk the chance of the card not being good 6 months from now. It might not even be legal to run a credit card 6 months after you get the number, or at the very least, ok with the credit card company. Even as a customer, I wouldn't feel comfortable having a company keep my credit card number around for 6 months before running it.

But Scott, in this case the poster said they'd already held his cards for around 19 months, but had only had their credit card charged about 6 months ago. So, they already had the CC number for over a year before using it. And it is not illegal to give someone your credit card to use on an ongoing basis. For example, XBox charges my CC every year for their annual Gold Service membership, various AHs require having a CC number on file, and on and on. I have no idea where you ever got the idea that giving some business your CC number to use going forward was ever illegal.

And in this case, if there was a change or problem with the CC after so much time had passed, when the TPG goes to run the card through before the labeling occurs and the CC charge doesn't go through, they simply put the order aside and contact the submitter. But this charging the CC before your cards go to labeling still doesn't make sense. Think about it, if the TPG was really so concerned with avoiding delays, why would they wait till AFTER the cards had actually been examined and graded, and only get concerned when they were on their way to labeling. Doing the actual review and exam of the cards takes them time and money as well. Don't you think a normal business with such a supposed concern about delays and all would have run the CC through then before doing any work or incurring any costs or time in grading the cards? Why would anyone pick some arbitrary point midway in their grading process to draw the line as to when they needed to make sure the CC charge would go through for the grading? That's why I'm calling BS on the excuse of an answer they gave the OP.

[BobC]

Originally Posted by Exhibitman

"Marx, which had been approved by PSA as a group submission outlet, indicated it had taken in over $954,000 in 2020, had $4.4 million in revenue during 2021 but because of its debts, ran out of money in August."

"the company says the suspension of PSA’s lower cost services last year resulted in a disruption of its revenue. After ramping up its business in 2020 including the opening of a storefront, Marx says it “was in so much debt that all revenues were being absorbed by the daily and weekly payments to merchant banks which made loans to the business.”

"In the bankruptcy documents, Marx blamed PSA’s 2021 shutdown of most service levels on much of its troubles, but also cited another business’ failure to pay some $60,000 it was owed and two bookkeepers it hired. In its filing, Marx indicated the bookkeeper paid herself about $50,000 more than the $48,000 per year salary she was supposed to receive. Both of the company’s bookkeepers left their jobs in November of last year. It also says a customer failed to pay a $60,000 debt to the company related to card grading."

So, gross revenue quadrupled but a $110K loss ate the customer money? Suuure. The Marx guys should be going to jail for theft for what they did. Lots of businesses get money from customers in advance. Whether you call it a deposit or a retainer or an advance, it is still money paid in trust for a service. That money should have been there held in a segregated account regardless of the company's financial woes. Instead, it sounds like Marx treated it like a piggy bank and in effect ended up running a ponzi scheme.

Adam,

I thought the exact same thing you did. This bankruptcy filing is either due to complete business stupidity, or tantamount to intentional criminal theft, or a combination of both. Otherwise, how after more than quadrupling your business in a single year can you suddenly end up with assets less than $100K, and debts exceeding $1M. There is no major inventory or capital investments required for what they were doing. You could literally run the type of service business from your house/garage if you really had to. So, what were the monies from the debts they incurred used for? This doesn't add up at all.

For one thing, the bookkeeper that paid him/herself the extra $50K, that is embezzlement. I wonder if they pressed charges and are looking to recover at least some of that embezzled money. I would certainly expect the bankruptcy court to ask such a question. And why did they suddenly have to open up a storefront? I don't really think you'd be expecting a steady stream of customers to come walking through the door for this type of service. If so, during the pandemic and all, you're a complete idiot. And the one outfit that stiffed them for $60K, as with the embezzling bookkeeper, I'm fairly certain the bankruptcy court will be interested in the status of that potential claim as well.

I've been involved with businesses and accounting for long enough to know that this Marx bankruptcy stinks to high heaven. Just from the few details put forth in this thread, the situations screams as to the owner(s) or somebody draining money from the Marx company to put them in their current bankrupt position. And yes, I have personal experience over the years dealing with businesses and people that have embezzled or misused funds, or that have run themselves into the ground (and bankruptcy) for stupid and intentional reasons. As I had stated in an earlier post, I would hope the Marx owner(s) can be held to at least some personal liability in this case, if not potentially some criminal charges as well. Unfortunately, the way our legal system is set up, people very often walk away from such bankruptcies with little to no damage or consequences, and no liabilities to themselves personally. Many supposed great business minds seemingly use bankruptcy as an ongoing tool to get, and stay, ahead. All the while damaging and hurting countless other people and businesses, while they walk away virtually unscathed. I just wonder now what the underlying case is with this Marx company, and how that will end up?

[Exhibitman]

The way BK can be manipulated is ugly AF. For example, one of my landlord clients had a deadbeat tenant that kept filing BK without doing the supporting schedules. The court would toss it out after 60 days but it would derail the eviction case each time. My client finally had to get a court order prohibiting it, which took months and cost $10K. The tenant ultimately skated on a year of rent before filing BK for real. My client got $0 as an unsecured creditor.

[Michael B]

Originally Posted by Exhibitman

The way BK can be manipulated is ugly AF. For example, one of my landlord clients had a deadbeat tenant that kept filing BK without doing the supporting schedules. The court would toss it out after 60 days but it would derail the eviction case each time. My client finally had to get a court order prohibiting it, which took months and cost $10K. The tenant ultimately skated on a year of rent before filing BK for real. My client got $0 as an unsecured creditor.

Adam,

So true. I have run into people with multiple bankruptcies that keep getting dismissed. How I dread running PACER (Public Access to Court Electronic Records for those who do not know) for one of those people. They have learned to play the game using legal stall tactics. It takes a judge to say no and threaten criminal prosecution to stop it in some cases.

As to this Marx case, I suspect a smart DA could argue criminal charges under RICO. Interstate business activity to defraud investors. It does not matter what they intended to do it is what they did do. Additionally, if they used the USPS to send the items to PSA there could be possible mail fraud.

If PSA first came out and said that they would return the items to the individual owners at no charge and then issued a statement saying that they would return at no charge except for shipping they may run into problems. I suspect that the first statement would hold, especially if it was in writing (implied contract?), as an offer that each owner could accept. I would defer to you on contract law.

[BobC]

Originally Posted by Exhibitman

The way BK can be manipulated is ugly AF. For example, one of my landlord clients had a deadbeat tenant that kept filing BK without doing the supporting schedules. The court would toss it out after 60 days but it would derail the eviction case each time. My client finally had to get a court order prohibiting it, which took months and cost $10K. The tenant ultimately skated on a year of rent before filing BK for real. My client got $0 as an unsecured creditor.

True dat!

Heck, our former President who touts his business acumen and the "art of the deal" has successfully filed bankruptcy SIX times in the 90s and 00s. Never personally though, so he always walks away free and clear. Can only imagine the number of people and businesses hurt.

I fully understand the need and purpose for bankruptcy laws, but like as in your case, very smart attorneys can take advantage of those laws in some seemingly very unethical ways. And they are perfectly legal and able to do so. Nothing personal towards you, but that is a perfect example of why many people absolutely hate attorneys.

Judges and courts have to abide by the laws in place, and though even they may agree the actions were egregious and morally/ethically wrong, they can't really do anything about it till the relevant legislative authority changes the current laws, and the relevant executive authority signs off on the changes.

I'll have to share some of my bankruptcy horror stories with you. Just a little late in the evening right now.

[BobC]

Originally Posted by Michael B

Adam,

So true. I have run into people with multiple bankruptcies that keep getting dismissed. How I dread running PACER (Public Access to Court Electronic Records for those who do not know) for one of those people. They have learned to play the game using legal stall tactics. It takes a judge to say no and threaten criminal prosecution to stop it in some cases.

As to this Marx case, I suspect a smart DA could argue criminal charges under RICO. Interstate business activity to defraud investors. It does not matter what they intended to do it is what they did do. Additionally, if they used the USPS to send the items to PSA there could be possible mail fraud.

If PSA first came out and said that they would return the items to the individual owners at no charge and then issued a statement saying that they would return at no charge except for shipping they may run into problems. I suspect that the first statement would hold, especially if it was in writing (implied contract?), as an offer that each owner could accept. I would defer to you on contract law.

Michael,

I'm with you in wondering if there isn't some mail fraud potential were the USPS or other carriers were used for inter-state deliveries. But in regards to what PSA was supposedly going to charge Marx submitters, the big difference to me wasn't whether they were going to charge them the postage to send their cards back, it was that in that Sports Collectors Daily article it said that PSA was going to grade their cards for free. That later post by Rich of the PSA official statement just said they'd return the cards. Based on that statement it sounded like they were just going to return the cards ungraded, exactly the opposite of what the article said. I'm waiting to get some clarification on exactly what PSA is going to do.

[Michael B]

Originally Posted by BobC

Michael,

I'm with you in wondering if there isn't some mail fraud potential were the USPS or other carriers were used for inter-state deliveries. But in regards to what PSA was supposedly going to charge Marx submitters, the big difference to me wasn't whether they were going to charge them the postage to send their cards back, it was that in that Sports Collectors Daily article it said that PSA was going to grade their cards for free. That later post by Rich of the PSA official statement just said they'd return the cards. Based on that statement it sounded like they were just going to return the cards ungraded, exactly the opposite of what the article said. I'm waiting to get some clarification on exactly what PSA is going to do.

Bob,

Yes, that is why I started that sentence with 'If'. No offense to Rich, but at this point most of it is hearsay. A direct statement of clarification in writing should clear up any questions.

[chalupacollects]

And now, TPGs may use this Marx case to further justify collecting even more money, even farther in advance of them performing the work they are supposed to do. If anything, this actually works to de-incentivize them to hurry up and get people's cards back to them. What's their rush, they already have your cards, and now your money. You can't suddenly do something else or go anywhere else. At least not without it likely costing you even more.[/QUOTE]

No, actually their credit card processors would frown about charging upfront. There are very few SIC categories where a merchant can charge in advance for future delivery of goods and services. Not sure how BGS is getting away with this unless they somehow convinced the processor's rep to misclassify them or are paying a premium rate to do so...

[chalupacollects]

[QUOTE=Exhibitman;2212771]"Marx, which had been approved by PSA as a group submission outlet, indicated it had taken in over $954,000 in 2020, had $4.4 million in revenue during 2021 but because of its debts, ran out of money in August."

"the company says the suspension of PSA’s lower cost services last year resulted in a disruption of its revenue. After ramping up its business in 2020 including the opening of a storefront, Marx says it “was in so much debt that all revenues were being absorbed by the daily and weekly payments to merchant banks which made loans to the business.”


There in bold lies the rub. These Marx people were funding their business off of loans secured by their daily credit card receipts. How it works is the processor loans you money off of your daily or monthly average of projected (read future) card dollars processed for a higher rate than something secured and then the card processor pays themselves back on a daily basis by deducting the payment from the daily receipts sent back to Marx. So if you processed $1000 per day and your loan payment is $200 per day. They would fund you $800. It actually can also work on a daily percentage.

That said, once PSA shut down, Marx could not take payments or make payments hence the cash flow problem. At least a good part of it.

[Rich Klein]

One thing to remember, and this will NOT alleviate the pain of the OP, is the grading companies are working to catch up and should be caught up by the end of the year if not earlier.

These delays in processing should be concluded and the money held should be back to pre-pandemic levels by January 2023. Little comfort to the OP but an better news FYI going forward.

[rjackson44]

This is insane

[Exhibitman]

One problem: the cards may not be PSA's to return. Technically, the assets of the debtor, even if they are held for others, become part of the BK estate, unless the bailor filed a UCC-1 with the State of CA establishing that the items are theirs. PSA may hear from the BK Trustee demanding that it turn over all of the cards. They would then be sold and the proceeds used to pay creditors in order, with the bailors treated as unsecured (last in line) unless the UCC-1 was filed.

[BobC]

Originally Posted by Michael B

Bob,

Yes, that is why I started that sentence with 'If'. No offense to Rich, but at this point most of it is hearsay. A direct statement of clarification in writing should clear up any questions.

So true. This whole thing is confusing, and not pleasant for those involved.

As for your comment, saw the "if", but wasn't sure if that was your intent/meaning. Sounds like we're on the same page. LOL

[BobC]

Originally Posted by Exhibitman

One problem: the cards may not be PSA's to return. Technically, the assets of the debtor, even if they are held for others, become part of the BK estate, unless the bailor filed a UCC-1 with the State of CA establishing that the items are theirs. PSA may hear from the BK Trustee demanding that it turn over all of the cards. They would then be sold and the proceeds used to pay creditors in order, with the bailors treated as unsecured (last in line) unless the UCC-1 was filed.

And Adam, this is exactly one of the reasons ordinary people often come to the point of despising and hating courts and attorneys. It is very clear to pretty much everyone with half a brain and any common sense that these cards are NOT PSA or Marx's property, yet the bankruptcy laws in seeking to protect and look out for the interests of creditors in such bankruptcy proceedings are basically stealing the cards from totally innocent submitters. I am aware of the UCC filings that may be required to show ownership of the cards, but most of these submitters have no clue as to what that means and why they may need to do such a filing in a timely manner. It is often too late for a submitter to do something before finding out their cards are taken. Instead of the courts working to protect the interests of ALL innocent parties in such cases. Instead, they can end up creating even more victims by legally stealing property that belongs to innocent card submitters.

What is ludicrous is that these submitters have to be proactive and go through the time and expense to file claims just to prove their property is actually theirs. Whatever happened to due process and the rights of the actual card owners? And the courts and attorneys involved usually know damn well who those cards really belong to, but don't give a $hit about those innocent people's property. If anything, it should be the bankruptcy court's burden to prove those cards do not belong to the submitters and true owners, and not the other way around. But that would make too much common sense, wouldn't it? And if any of you wonder why anyone would possibly have a reason to treat the innocent card submitter's property this way and just take it, that is simple, guess how the appointed bankruptcy/case trustee gets paid for overseeing what I assume in this Marx case is a Chapter 7 bankruptcy filing? Aside from a flat fee they get from the extremely nominal (probably less than $100) bankruptcy filing fee, they get paid on commission a percentage of the proceeds of funds or proceeds from asset sales they collect to pay off the creditor's debts. So, by keeping or grabbing an innocent submitter's cards in this particular Marx case, and selling them off to raise funds to pay off Marx creditors, the appointed Trustee is also putting more money into their own pocket. Now there's a big incentive for them to do the right thing by innocent card submitters, huh?

And it can even get worse than that in creating more innocent victims in a bankruptcy case. Most ordinary people don't know this, but there is actually a sort of look-back rule in place in regards to a bankruptcy. If a business files for bankruptcy, the case Trustee can actually go back to anyone they paid more than $600 to for up to 90 days before the bankruptcy filing, and declare that was a preferential payment and legally force the person/business to return the full amount they were paid (wages, tax payments and such are generally exempt). The only other requirement is that the now bankrupt company was insolvent (debts greater than assets) at the time the payment was made, which they probably were, or why else would they be filing bankruptcy? This is in place to stop the bankrupt company from being able to get funds out to parties that may be friendly, related, or even helping the bankrupt company owner(s) remove or hide assets from the bankruptcy trustee. But the 90-day cutoff is a completely arbitrary rule that allows the Trustee to take money back from totally innocent people and businesses that were honestly paid in the normal course of business, and who likely needed and used those monies to pay their own bills and employee wages, and probably weren't even aware of the pending bankruptcy filing in many cases. But now they have to find the money to pay back to the Trustee, and then they get added into the rest of the unsecured creditor pool to see if they ever get any of their money back from the court. No telling when, or even if, they'll ever get anything back. And to top it off, the Trustee likely gets a percentage of what they had to pay back, so they had the added privilege of being forced to literally pay for getting screwed, and most definitely not in a "happy ending" way.

Oh, and I'll give you three guesses as to what profession these Trustees usually belong to, and you probably don't need the first two! (And this is not to personally disparage our own resident legal minds as there are a vast majority of truly great attorneys out there, but as with most all professions, there will always be a fair share of dirtballs and scumbags mixed in as well.)

And worst of all, in many cases more often than not, the party(ies) truly responsible for the whole situation to begin with, which in this particular case is most likely the owner(s) of Marx, will end up walking away with no personal liability or any other serious consequences from the bankruptcy proceeding. As long as they were smart and incorporated the business filing for bankruptcy, or filed to set it up as an LLC type of entity, the owner(s) of a bankrupt business are generally pretty much absolved of any personal liability and walk away clean. In such cases, the only thing they stand to lose is what they invested/put into the business and hadn't taken/gotten back out by the time of the bankruptcy filing.

Can be a truly fair and just world we live in, huh? Just wait till one of you is driving to a show with a lot of your cards and such in the back, and you get pulled over by a criminal wearing a badge who claims and takes your entire collection/inventory (or your cash you were bringing to buy cards with) as an asset forfeiture! Good luck to you should that ever happen.

[BobC]

[QUOTE=chalupacollects;2213106]

Originally Posted by Exhibitman

"Marx, which had been approved by PSA as a group submission outlet, indicated it had taken in over $954,000 in 2020, had $4.4 million in revenue during 2021 but because of its debts, ran out of money in August."

"the company says the suspension of PSA’s lower cost services last year resulted in a disruption of its revenue. After ramping up its business in 2020 including the opening of a storefront, Marx says it “was in so much debt that all revenues were being absorbed by the daily and weekly payments to merchant banks which made loans to the business.”


There in bold lies the rub. These Marx people were funding their business off of loans secured by their daily credit card receipts. How it works is the processor loans you money off of your daily or monthly average of projected (read future) card dollars processed for a higher rate than something secured and then the card processor pays themselves back on a daily basis by deducting the payment from the daily receipts sent back to Marx. So if you processed $1000 per day and your loan payment is $200 per day. They would fund you $800. It actually can also work on a daily percentage.

That said, once PSA shut down, Marx could not take payments or make payments hence the cash flow problem. At least a good part of it.

Tim,

Here's the unanswered $64,000 question, WTF did they do with all this money they borrowed? It obviously wasn't left in the Marx business or used to buy assets still in the business. So, did they intentionally plan this to pull out or use the funds personally, and then file bankruptcy to get out of paying it back? Or maybe they made some stupid investing ot business decision(s) that led them to lose the money. As Adam pointed out before, the $60K of bad debt from one customer, plus the $50K allegedly stolen by the one bookkeeper, doesn't begin to explain the over $1M in outstanding debts they reported in their bankruptcy filing. I'm assuming (actually hoping) the court requires at least some fundamental forensic accounting be performed on the Marx company books to maybe find out what was done to really get the company in the position it is now in, and to determine to what extent the owner(s) were intentionally involved so as to decide if there are any potential civil or criminal charges or penalties they may be liable for.

[D. Bergin]

Originally Posted by BobC

Tim,

Here's the unanswered $64,000 question, WTF did they do with all this money they borrowed? It obviously wasn't left in the Marx business or used to buy assets still in the business. So, did they intentionally plan this to pull out or use the funds personally, and then file bankruptcy to get out of paying it back? Or maybe they made some stupid investing ot business decision(s) that led them to lose the money. As Adam pointed out before, the $60K of bad debt from one customer, plus the $50K allegedly stolen by the one bookkeeper, doesn't begin to explain the over $1M in outstanding debts they reported in their bankruptcy filing. I'm assuming (actually hoping) the court requires at least some fundamental forensic accounting be performed on the Marx company books to maybe find out what was done to really get the company in the position it is now in, and to determine to what extent the owner(s) were intentionally involved so as to decide if there are any potential civil or criminal charges or penalties they may be liable for.

Bob, you're the accountant, but stating they had $4.4 Million in revenue (not profit) doesn't really mean a whole lot, if as a bulk submitter they are working on tiny margins, and of that 4.4 million, they owe PSA 4.2 million in fees, their employees money, lousy book-keeping and getting skimmed from the inside, and also trying to float loans while PSA is taking close to two years to make their customers happy.

Not saying they're innocent in any way. Just that it was very likely a very poorly thought out business model. They also probably skimmed a lot of salary at the top before they filed for bankruptcy also...so don't mistake this for sympathy for them either.

[Exhibitman]

Originally Posted by BobC

And Adam, this is exactly one of the reasons ordinary people often come to the point of despising and hating courts and attorneys. It is very clear to pretty much everyone with half a brain and any common sense that these cards are NOT PSA or Marx's property, yet the bankruptcy laws in seeking to protect and look out for the interests of creditors in such bankruptcy proceedings are basically stealing the cards from totally innocent submitters. I am aware of the UCC filings that may be required to show ownership of the cards, but most of these submitters have no clue as to what that means and why they may need to do such a filing in a timely manner. It is often too late for a submitter to do something before finding out their cards are taken. Instead of the courts working to protect the interests of ALL innocent parties in such cases. Instead, they can end up creating even more victims by legally stealing property that belongs to innocent card submitters.

What is ludicrous is that these submitters have to be proactive and go through the time and expense to file claims just to prove their property is actually theirs. Whatever happened to due process and the rights of the actual card owners? And the courts and attorneys involved usually know damn well who those cards really belong to, but don't give a $hit about those innocent people's property. If anything, it should be the bankruptcy court's burden to prove those cards do not belong to the submitters and true owners, and not the other way around. But that would make too much common sense, wouldn't it? And if any of you wonder why anyone would possibly have a reason to treat the innocent card submitter's property this way and just take it, that is simple, guess how the appointed bankruptcy/case trustee gets paid for overseeing what I assume in this Marx case is a Chapter 7 bankruptcy filing? Aside from a flat fee they get from the extremely nominal (probably less than $100) bankruptcy filing fee, they get paid on commission a percentage of the proceeds of funds or proceeds from asset sales they collect to pay off the creditor's debts. So, by keeping or grabbing an innocent submitter's cards in this particular Marx case, and selling them off to raise funds to pay off Marx creditors, the appointed Trustee is also putting more money into their own pocket. Now there's a big incentive for them to do the right thing by innocent card submitters, huh?

And it can even get worse than that in creating more innocent victims in a bankruptcy case. Most ordinary people don't know this, but there is actually a sort of look-back rule in place in regards to a bankruptcy. If a business files for bankruptcy, the case Trustee can actually go back to anyone they paid more than $600 to for up to 90 days before the bankruptcy filing, and declare that was a preferential payment and legally force the person/business to return the full amount they were paid (wages, tax payments and such are generally exempt). The only other requirement is that the now bankrupt company was insolvent (debts greater than assets) at the time the payment was made, which they probably were, or why else would they be filing bankruptcy? This is in place to stop the bankrupt company from being able to get funds out to parties that may be friendly, related, or even helping the bankrupt company owner(s) remove or hide assets from the bankruptcy trustee. But the 90-day cutoff is a completely arbitrary rule that allows the Trustee to take money back from totally innocent people and businesses that were honestly paid in the normal course of business, and who likely needed and used those monies to pay their own bills and employee wages, and probably weren't even aware of the pending bankruptcy filing in many cases. But now they have to find the money to pay back to the Trustee, and then they get added into the rest of the unsecured creditor pool to see if they ever get any of their money back from the court. No telling when, or even if, they'll ever get anything back. And to top it off, the Trustee likely gets a percentage of what they had to pay back, so they had the added privilege of being forced to literally pay for getting screwed, and most definitely not in a "happy ending" way.

Oh, and I'll give you three guesses as to what profession these Trustees usually belong to, and you probably don't need the first two! (And this is not to personally disparage our own resident legal minds as there are a vast majority of truly great attorneys out there, but as with most all professions, there will always be a fair share of dirtballs and scumbags mixed in as well.)

And worst of all, in many cases more often than not, the party(ies) truly responsible for the whole situation to begin with, which in this particular case is most likely the owner(s) of Marx, will end up walking away with no personal liability or any other serious consequences from the bankruptcy proceeding. As long as they were smart and incorporated the business filing for bankruptcy, or filed to set it up as an LLC type of entity, the owner(s) of a bankrupt business are generally pretty much absolved of any personal liability and walk away clean. In such cases, the only thing they stand to lose is what they invested/put into the business and hadn't taken/gotten back out by the time of the bankruptcy filing.

Can be a truly fair and just world we live in, huh? Just wait till one of you is driving to a show with a lot of your cards and such in the back, and you get pulled over by a criminal wearing a badge who claims and takes your entire collection/inventory (or your cash you were bringing to buy cards with) as an asset forfeiture! Good luck to you should that ever happen.

Bob, there are a lot of problems with your analysis and lots of misinformation:

1. Let's start with the clearest one: hating the players instead of hating the game. The rules for bankruptcy were made by Congress, not the lawyers who represent the parties, which means they were written by lobbyists for creditors for their benefit, not ours. You wanna cast aspersions, start right there with the unholy alliance of money and politics that gives us the best government money can buy.

2. The law has a cheap and easy mechanism to protect your property if you hand it over to someone, a UCC-1 filing. I do not have a lot of sympathy for people who blithely hand strangers thousands of dollars of property without any effort to safeguard their property.

3. Corporate shells are BS; we punch through them all the time via alter ego claims. Also, and you may not know this, entities do not get discharges in bankruptcy like humans. If you really want to get rid of a debt, you need to file a personal bankruptcy. Also, the people who 'get away with it' are usually doing so because there is no personal basis for liability, typically because the creditor had a contract with the entity and not the beneficial owner(s), and had no personal guaranty.

4. The trustees are paid hourly under court supervision, not contingent and not at will.

5. The 90-day rule you reference, the preference period, allows the trustee to ask the court to void any debt payment made in the 90 days before a bankruptcy is filed. It is meant to prevent debtors from favoring friends and family creditors at the expense of everyone else. There are many exceptions such as payment for contemporaneously-delivered services and goods.

6. I've fought asset forfeiture cases. The law was changed quite some time ago to allow claimants to sue to recover their assets and to get their attorneys' fees and costs awarded if they win. Also, people do not just have assets taken willy-nilly in traffic stops. There has to be more to it. If not, there is a great civil rights case.