They're not all rogue traders...

If you were to try to sell a car with no MOT, no tax, no service history, no registration document, in fact no paperwork at all for £5,000 you wouldn't get very far. Try doing this for a couple of years and before long you would probably have the police knocking at your door. Now imagine you want to sell an old Italian violin, which will undoubtedly have had more owners than a ten year old Mondeo, for £50,000. There would likely be no shortage of prospective buyers wanting to have a look, and one of them might even hand over the cash. Violin dealers rely on a greater level of trust in their clients than in any other profession. On going to a dentist or doctor it's reassuring to see all manner of diplomas and certificates adorning the walls. A lawyer would not be able to proffer advice or represent you in court without a practising certificate. Yet a violin dealer, who may have no qualifications in the field, can sell you a violin for £100,000 without any paperwork or provenance. There is no governing body like the Solicitors Regulation Authority or the GMC to monitor the conduct of those in the string trade, leaving most players at the mercy of the dealers.
Occasionally a rogue dealer gets caught out. Dietmar Machold was arrested last year on fraud charges (see the Strad article here: http://www.thestrad.com/Article.asp?ArticleID=1838) One wonders how many players were taken in by his claims such as "Machold's commitment is to high quality, personalized service...", and whether those that have bought instruments from him still believe that "The highly regarded Machold certificate of authenticity accompanies each instrument and bow...". These are all quotes from the Machold Rare Violins website, why would anyone have had cause to doubt them?

The reality though, to coin a phrase, is that while there may be a few bad apples, it doesn't mean the whole barrel is rotten. Many dealers in the string world are knowledgeable, honest and trustworthy people. The nature of antique string instruments is such that any appraisal is at least 70% subjective, meaning the same instrument could be given five different valuations from five different dealers. This isn't necessarily wrong, but it does mean that the buyer needs to be quite savvy to avoid being taken in by the Arthur Daley's of the string world.