Free Coin Offer Proves Everything Has A Price

Aug. 28, 2007 - KGO (KGO) -- Could you resist an offer of free money? Or would you be skeptical? Well, we found a big ad offering free money; only problem is you have to pay for it.

Basil Pohnov of Oakland got pretty excited when he saw a full page spread in the San Francisco Chronicle.

It looked like a news story claiming people could get a year's worth of presidential dollar coins for free.

"It seemed like the federal reserve, our government is unloading these to the public because they're overstocked," Basil Pohnov said.

The pictures seemed to show government officials unveiling the special coins.

Basil followed instructions to quickly claim his coins, but when he called the 800 number he found out the free coins would actually cost him $8 dollars, plus $4 dollars for shipping.

"I just couldn't figure out what do I get for free if I have to pay $12 dollars?" Pohnov said.

He was told the coins "were" free. it's the coin "case" that cost eight dollars.

"I don't want the case I just want the coins for free, and they said sorry we can't do that," said Pohnov.

And what he thought was a news article was actually an advertisement placed by World Reserve Monetary Exchange, a marketing company in Ohio.

The coins are real, the U.S. Mint is issuing four each year one for each U.S. president. But Mint officials told 7 on your side anybody can get the coins 700 million of them are already circulating.

"I put a $5 dollar bill in the change machine and I happened to get four of them come out of the change machine,'' coin dealer Ron Umile said.

That's San Francisco coin dealer Ron Umile. Know what he did with those presidential coins?

I put one in the coke machine to get a soda," coin dealer Ron Umile said.

Umile says they might be fun to collect, but the one dollar coins are worth -- you guessed it one dollar.

"It's just your ordinary coin you can get at the bank at face value, Dean Witter from Witter Coins said.

Coin dealer Dean Witter says paying $12 to get four coins is three times their value. But Basil says he was led to believe this was news. there was only this tiny print saying it was an ad.

San Francisco Chronicle advertising executive Phyllis Pfeiffer didn't want to talk on camera. But she told us the newspaper's policy is to label ads that look like news stories. This ad complied but the chronicle prefers a clearer label, and the newspaper will more carefully review ads in the future.

But World Reserve Monetary Exchange said its offer is legitimate.

The company said the news article format is not intended to deceive, it's just more familiar for readers and it's labeled as an advertisement. Also, the company says offering the coins free with purchase is a common retail offer.

The coins are better than bank coins because they're never circulated so they are more appealing to collectors.

But dealers say the coins won't gain value because they have no precious metals and they're definitely not rare.

What would he advise to someone who has the coins?

"Well I'd tell them to go spend it. enjoy your lunch," Witter said.

Coin dealers say it's more likely these coins will actually be worth less in the future because of inflation. But the mint is hoping they'll catch on; better than the Susan B Anthony and the Sacajawea dollar coins of years past.

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