There are millions of counterfeit bills in circulation. Even with the rise of digital payments, counterfeit cash continues to be a risk for financial institutions. Nationwide, there are news stories about counterfeit bills almost every week.
For example, a New Jersey man was recently sentenced to five years in prison for printing fake $100 notes. Authorities say they have found close to a quarter-million in similar notes over the last couple of years. In the first three months of 2021, officials intercepted more than $1.64 million in counterfeit bills from China at Chicago’s International Mail facility.
Counterfeit cash can create significant losses for your financial institution. If you accept counterfeit cash, you will typically be stuck with the loss because the Federal Reserve does not accept counterfeit cash in its deposits. Here’s what you need to know to protect your bank from counterfeit cash.
Invest in a UV Detector
If you don’t have a UV detector in your bank, you need one. These detectors make the security thread in U.S. currency glow a certain color. The thread is pink on the $100 bill, yellow on the $50 bill, green on the $20 bill, orange on the $10 bill, and blue on the $5 bill.
Often, counterfeiters will use chemicals to erase the ink on a lower denomination. Then, they will print the information for a larger bill on that paper. This helps counterfeiters to get past the challenge of texture. U.S. bills are a unique blend of 25% linen and 75% cotton which is hard to replicate.
If a UV light detects a blue thread on a $100 bill, you will know that the bill was originally a $5 bill even if it says $100 and has Ben Franklin on it.
Train Your Tellers About Currency Security Features
Your tellers are your first line of defense against in-branch bank fraud. If they accept counterfeit cash or fraudulent checks, your bank is at risk of a loss. Make sure that your tellers understand how to use tools that scan for counterfeits, but also teach them the basics of spotting counterfeit cash.
Here is a brief overview of the security features of the newest versions of U.S. currency:
- 3D Security Ribbon — Found on the $100 note, this advanced security feature can be seen when you tilt the note back and forth while focusing on the security ribbon. The bells will change to 100’s and move side to side or up and down, as you move the note.
- Bell in the Inkwell — Also featured on the $100 bill, this security feature consists of an ink well that changes from copper to green. As you tilt the note, you will also see a bell appearing and disappearing in the inkwell.
- Portrait watermark — The portrait watermark is a faint image to the right of the main portrait on the bill. It appears on the newest versions of the $10, $20, $50, and $100 notes.
- Color-Shifting Numbers — When you tilt a $100, $50, $20, or $10, the number in the lower right corner will change from copper to green.
- Security Thread — Visible on both sides of the note, the security thread is to the left of the portrait. It glows pink under ultraviolet light. The text on the thread varies depending on the denomination.
- Raised Printing — With your finger, you should be able to feel raised printing on $5 to $100 notes.
- Microprinting — All of these notes also have some microprinted text. The text and location vary based on the note. You may need to use a magnifying glass to see it.
Again, these security features apply to the newest versions of U.S. currency. You may also want to train your tellers how to look for security features on older versions of U.S. currency. Older currency may be easier to counterfeit because the older notes didn’t have as many security features.
If you receive a counterfeit bill, show your tellers. Let them know what’s out there. Seeing and touching a counterfeit bill can often be the most effective training. Also, make sure to update your staff about security features whenever the Treasury releases a new bill.
Incentivize Employees for Detecting Fraud
Many banks that have effectively reduced their fraud rates have introduced employee incentive programs. When employees spot a counterfeit bill or other signs of bank fraud, they should be congratulated. But also use the experience as a jumping-off point to train your other staff members.
Encourage Your Tellers to Chat With Customers
When chatting with your tellers, account-holders may reveal telltale signs that they may be the victim of or a party to bank fraud. To tap into this anti-fraud strategy, encourage your tellers to chat with customers, and tell them which red flags to look out for.
For instance, if a customer is depositing a money order and saying that they won sweepstakes, that’s a red flag for fraud. If a customer says something like, “Someone sold me these three $100 bills for only $50.” that is another sign of a potential issue.
Watch Business Deposits
The most frequent entry point for counterfeit bills into your bank is through business deposits. Businesses often become the victim of counterfeit money because their cashiers don’t know how to check it or they may miss small counterfeit indicators.
Busy businesses with a lot of cash sales may be a particular risk. Check these deposits manually, or run the cash through a money counting machine trained to spot counterfeit bills.
Report Counterfeit Currency
If you receive counterfeit currency, complete a counterfeit note report and send it to the Secret Service office in your area. For counterfeit cash equivalents such as cashier’s checks or money orders, contact the Office of the Comptroller of the Currency.
Contact Us for Help
Bank fraud is constantly changing as technology changes, but many criminals still use tried-and-true methods such as creating fake cash. To protect your financial institution from fraud, you need the right tools.
At SQN Banking Systems, we offer a variety of tools and solutions to protect financial institutions from fraud. To get help and learn more, contact us today.