Popular card grading company PSA has been hit with a class-action lawsuit over alleged inconsistencies with the company’s grading, dating back to the first card ever graded. The United States-based company has grown into one of the pillars of the industry for grading Pokemon TCG cards, sports cards, and more.
For many collectors of trading cards, grading can be an important way to preserve both the condition and value of their cards. Professional grading companies like PSA and CGC have become household names within the trading card community, with PSA growing into the industry standard for card authentication. Graded cards can often even fetch higher prices on the secondary market than their ungraded versions, including Pokemon‘s base set Charizard card selling for hundreds of thousands of dollars with a PSA 10 grade. Now, PSA has found itself in hot water, facing a lawsuit over its grading process.
Grading Company PSA Being Sued for Fraud
A class-action lawsuit was officially filed on July 28 against PSA in the District Court of Maryland. The lawsuit alleges that PSA commited false advertising with its card grading, suggesting that the process is not as objective as the company portrays and is instead focused more on “eye appeal.” PSA’s employees are also put in the line of fire within the lawsuit, questioning the qualifications of the people grading expensive cards from games like Pokemon while withholding their identity. The first card ever graded by the company is also brought up as a point of contention, claiming that PSA knowingly graded a T206 Honus Wagner baseball card that had been altered before grading it.
Rearrange the covers into the correct US release order.
Rearrange the covers into the correct US release order.
Easy (5)Medium (7)Hard (10)
The lawsuit makes heavy claims about PSA’s influence over the sale of graded cards. PSA is alleged to have intentionally limited the quantity of Gem Mint 10 grades given to certain cards, artificially inflating the value by reducing the supply. PSA’s ownership by major authentication company Collectors Holdings is also brought into question within the lawsuit, claiming that the partnership between the two companies creates a conflict of interest that is not disclosed to customers. The lawsuit is seeking class action certification and recovery of monetary damages from PSA, as well as greater changes to PSA’s business practices.
PSA’s legal troubles follow a major change to the company’s policy on card submissions in early June. PSA officially confirmed that it would be putting a pause on several types of submissions, including all of its Value and Bulk tiers. The change comes as the company claims it is dealing with a backlog of more than 10 million cards moving through its grading system, driven by the recent popularity of card games like One Piece and Pokemon. PSA did not provide a timeframe for re-opening Value tiers, saying it will be after the company’s backlog falls below 5 million cards.
PSA’s class-action lawsuit follows greater efforts by many consumers to hold big companies accountable. The gaming world has seen multiple major lawsuits in recent months, including a class-action lawsuit filed against Sony in June over the shutdown of Destruction All-Stars. Popular developer Ubisoft has also found itself in hot water, particularly over the delisting of racing game The Crew, which helped to spark the growing “Stop Killing Games” movement. PSA’s newest legal troubles could spark major changes for the trading card industry as a whole.