What Is Counterfeit Money?

Counterfeit Money

Counterfeit money is fake money and it’s a big threat to anybody. Since the introduction of currency in our society, counterfeit money has been with us. There will be lots of differences between counterfeit money and genuine currency. So if you want to identify fake money then you have to familiarize yourself with the differences.

Definition Of Counterfeit Money

Counterfeit money is defined as the fake currency or imitation of the money. Usually, this type of money is produced without any kind of legal authorization of the state or any government. The frauds bring counterfeit money into circulation illegally to earn quick money as well as damage the economy and financial structure of a country. This is a big threat that any business can’t afford to be complacent about. The reason is; when a business receives fake money it loses the face value of the money and hurts its profit very badly.

What To Do If You Receive Counterfeit Money

According to United States Secret Service, if you receive counterfeit money then:

1. Do not return the counterfeit money to the passer

2. Try to keep the passer with you or delay the passer

3. Observe the passer’s description and check if he/she has any companions

4. If the passer is using any vehicles then try to collect the license plate numbers

5. Contact the local police department or the United States Secret Service field office

6. Write your initials and the date in the white border areas of the suspect note

7. Now carefully handle the note and place it in a protective covering

8. Then send the note or coin only to a properly identified police officer or a U.S. Secret Service special agent

How To Identify Counterfeit Money

If you are a business owner or you deal with a huge amount of money then it is very important for you to know how you can spot counterfeit money. There are several factors available that will help you identify fake money. They are:

1. Portrait

2. Federal Reserve & Treasury Seals

3. Border

4. Serial Numbers

5. Paper

6. Paper Features

7. Watermark

8. Threads

Portrait

Most of the currency has pictures and in real money, the picture will look authentic and it will stick out against the background. On the other hand, in fake money, the portrait usually looks flat and dull in color. Moreover, the details are often too dark or blemished.

Federal Reserve & Treasury Seals

On real money, the Federal Reserve and Treasury seals will look very sharp and authentic. However, in fake money, the seals will be uneven, dull, and there will be broken saw-tooth points.  

Border

In real currencies, the fine lines in the border will remain clear and unbroken. However, in counterfeits, the line will be blurred and not clear.

Serial Numbers

In genuine money, the serial numbers are unique in style and are evenly spaced. The serial numbers will be printed in the same color of ink as the Treasury Seal. On fake bills, you will find a different color for the serial numbers and they might not be evenly spaced.   

Paper

In real money, the paper has tiny red and blue fibers embedded throughout. On the other hand, the fake money tries to duplicate the fibers by printing them throughout the lines on the paper. Therefore, if you closely examine the real and, fake money, you will easily understand the difference on the paper.    

Paper Features

The real banknote paper is made from cotton pulp which ensures better durability and they have a distinctive feel. You won’t find these features in fake money. 

Watermark

The watermark is a very commonly used security feature of real money. If you held up the real money to the light then an image will appear. The watermark will be similar to the portrait that is printed on the note. In counterfeit money, the effects of the watermark will be crude.

Threads          

In real money, the threads are embedded within the paper fiber. The thread can be invisible or might have a starburst effect. You will find the thread weaved in and out of the paper when viewed from one side. It’s a very difficult feature to fake it therefore in counterfeit money you might find a thin gray line or a thin line of varnish in the area where usually the thread is.

Laws And Regulations For Counterfeiting In The USA

In the USA, counterfeiting Federal Reserve notes is considered as a federal crime. Some of the laws and regulations for counterfeiting in the USA are – 

1. Manufacturing counterfeit United States currency or altering genuine currency to increase its value is a violation of Title 18, Section 471 of the United States Code and is punishable by a fine of up to $5,000, or 15 years imprisonment, or both.

2. Possession of counterfeit United States obligations with fraudulent intent is a violation of Title 18, Section 472 of the United States Code and is punishable by a fine of up to $15,000, or 15 years imprisonment, or both.

3. Anyone who manufactures a counterfeit U.S. coin in any denomination above five cents is subject to the same penalties as all other counterfeiters. Anyone who alters a genuine coin to increase its numismatic value is in violation of Title 18, Section 331 of the United States Code, which is punishable by a fine of up to $2,000, or imprisonment for up to five years, or both.

4. Forging, altering, or trafficking in United States government checks, bonds, or other obligations is a violation of Title 18, Section 510 of the United States Code and is punishable by a fine of up to $10,000, or 10 years imprisonment, or both.

5. Printed reproductions, including photographs of paper currency, checks, bonds, postage stamps, revenue stamps, and securities of the United States and foreign governments (except under the conditions previously listed) are violations of Title 18, Section 474 of the United States Code. Violations are punishable by fines of up to $5,000, or 15 years imprisonment, or both.

6. A person who, outside the United States, engages in the act of— (1)making, dealing, or possessing any counterfeit obligation or other security of the United States; or (2)making, dealing or possessing any plate, stone, analog, digital, or electronic image, or other things, or any part thereof, used to counterfeit such obligation or security, if such action would constitute a violation of section 471, 473, or 474 if committed within the United States, shall be punished as is provided for the like offense within the United States.

7. Whoever, without lawful authority, makes any die, hub, or mold, or any part thereof, either of steel or plaster, or any other substance, in likeness or similitude, as to the design or the inscription thereon, of any die, hub, or mold designated for the coining or making of any of the genuine gold, silver, nickel, bronze, copper, or other coins coined at the mints of the United States; or Whoever, without lawful authority, possesses any such die, hub, or mold, or any part thereof, or permits the same to be used for or in aid of the counterfeiting of any such coins of the United States— Shall be fined under this title or imprisoned not more than fifteen years, or both.

Reference: https://www.law.cornell.edu/uscode/text/18/part-I/chapter-25

FAQs About Counterfeit Money

1. What Do Banks Do With Counterfeit Money?

It’s the duty of banks to confiscate the counterfeit money and then hand over the money to the Secret Service. Then Secret Service investigates and takes the counterfeit bills out of circulation. A statistic showed that last year the Secret Service seized $58 million in counterfeit U.S. currency.

2. Can A Bank Give You Fake Money?

There is no way a bank can willingly give you fake money. However, there is a small chance you may receive fake bills from a bank or ATM. Over the last few years, there were few cases have been reported in the USA so you should check your money before leaving the bank.

3. Will A Bank Replace A Counterfeit Bill?

Most of the banks say that they will change the fake money but in most cases, they won’t change the fake money. If you receive the money from a bank or an ATM then there are chances, the bank might change the fake money. However, if you receive counterfeit money from a store, an individual, etc. then the bank won’t change the fake money.

4. Do Vending Machines Take Fake Money?

NO, vending machines don’t make fake money. Usually, a vending machine accepts all types of bills unless the watermarks are tampered.

5. What Happens If You Accidentally Use A Counterfeit Bill?

The use or attempted use of counterfeit bills is illegal according to the federal law of the USA. Moreover, the punishment for this type of offense is up to 20 years in prison and a fine.

6. What Is The Penalty For Passing Counterfeit Money?

If you are caught passing fake money then you will be charged for going against the laws of counterfeiting. You will either have to pay a fine of up to $250,000 or up to 20 years in prison or both.    

Last Updated on May 29, 2021 by Musa D

Scroll to Top