Banking 101: What to Do If You Receive Fake Money

Accepting fake money costs you real money. This unpleasant fact makes learning to spot fake money a critical skill, especially if you handle a lot of cash at work or in your day-to-day life.

Fake bills are out there, despite continued security enhancements to real bills. Increasingly obvious counterfeit bills have entered the economy in recent years, for example, prop money used in movie production.

In 2017, the Secret Service prevented around $73 million in fake U.S. currency from entering the economy. It arrested more than 1,500 people in connection with counterfeiting, and closed down 101 counterfeit bill production facilities.

While that amount of fake money is a drop in the bucket for the massive U.S. economy — which had $1.70 trillion in cash in circulation at the beginning of 2019 — it’s still a substantial sum, and that’s only the amount that was intercepted.

Ashley Patrick, money coach and owner of Budgets Made Easy, remembers that during her time as a detective for a town in North Carolina, she worked cases where people simply produced color copies of bills on cheap printers. But high-end fakes are easily passed off as authentic cash.

“The professional ones are a lot harder to tell,” she says. “But you can tell by feeling it and looking at it that something’s not right.”

Steps to follow if you receive fake money

The National Credit Union Administration and the U.S. Department of the Treasury both offer advice about what to do if you receive fake money. Here are their tips:

• Do not return the counterfeit bill to the person who gave it to you.
• Observe what the person looks like and who they’re with, and try to record the license plate numbers of any vehicles they are using.
• Contact your local police department or a field office of the U.S. Secret Service to report the incident.
• Write your initials and the date in the white edge of the suspect bill.
• Put the bill in something that will protect it, like an envelope or plastic bag.
• Give the note to an officer at your local police station or a Secret Service officer, or mail it to your local Secret Service office.

Alternately, people who suspect they hold counterfeit bills “can always go to their bank to speak to somebody there,” says Joe Mancini, vice president of information security for Radius Bank, an online bank. “Most likely the staff has been trained on what to look for in potential identifiers of counterfeit currency.”

Bank staff can help holders of fake bills figure out how to contact the Secret Service to report the fraud and deliver the bills to the authorities.

How to identify fake money

There are many indicators you can look for to tell whether a bill you receive is genuine. Here are the main characteristics of real U.S. banknotes:

• The paper is made of cotton and linen and should feel slightly rough to the touch.
• The paper has randomly dispersed red-and-blue fibers throughout.
• Denominations of $5 and higher have a security thread embedded in the paper.
• Denominations of $5 and higher have a faint watermark to the right of the portrait on the bill.
• Denominations of $5 and higher have tiny words written in various places, known as “microprinting.”
• On denominations of $10 and higher, the number on the bottom right changes from copper to green as you move the money.

The U.S. Currency Education Program provides photos and features of each denomination. Here’s what you’ll find on $50 and $100 notes:

The $50 note (see an interactive version here)

• The current design of this note has subtle blue and red background colors.
• A vertical security thread embedded in the paper is imprinted with a pattern of “USA 50” and a small flag. Ultraviolet light makes the thread glow yellow.
• A watermark of President Grant is visible when you hold the bill to the light.
• The lower right corner of the note features a color-shifting number “50.”

The $100 note (see an interactive version here)

• A 3-D security ribbon is woven into the paper and imprinted with images of bells and “100” that move when you tilt the bill.
• A watermark of Benjamin Franklin is visible when you hold the bill to the light.
• A copper-colored image of an inkwell holds an image of a green bell that shifts to copper when you move the bill, making it seem as if the bell is disappearing and reappearing.
• The lower right corner of the note features a color-shifting number “100.”

It’s important to know the particular security features on the bigger denominations because one common way of creating fake money is to bleach smaller bills and then reprint the paper with an image of a larger denomination. If you get a “$100” bill that feels like real money but doesn’t have a color-changing bell in an inkwell, it may be a $1 bill dressed up to look 100 times as valuable.

Will my bank replace fake money?

Banks can, at their discretion, replace fake money received by their customers, but they are unlikely to do so. It makes little difference where the counterfeit came from — a store, an individual, or an ATM. In most cases, you’ll end up writing off the loss.

Banks are in charge of vetting the money that they dispense via their ATMs. If that’s where the fake came from, you’ll have a better argument for getting a replacement. But getting counterfeit money from the ATM is a very rare occurrence thanks to their expert due diligence.

The government is also unlikely to reimburse you for your fake bills. Government agencies provide detailed education about counterfeit money to help you avoid accepting it in the first place.

“My experience is that if the currency is in fact counterfeit, you’re kind of stuck,” says Mancini. “That puts emphasis on the first step — what to look for, the identifiers.”

One source of compensation may be your insurance company. Some homeowners or renters’ insurance policies will allow you to claim counterfeit money. If you have insurance, check with your carrier if you strike out at the bank.

FAQ on fake money

Who do I need to contact if I receive fake money? How do I contact them?
Contact your local police department and/or your local Secret Service office. Secret Service offices in your area are listed at this handy website.

Will the authorities think I’m the counterfeiter if I contact them?
The fact that you are reaching out about a potential crime will keep the Secret Service from suspecting you are the perpetrator. They know there are millions of dollars of fake currency circulating and have explicitly instructed people who receive them to turn them in.

Should I confront the person who is handing me a fake bill when I notice it?
Your first priority in this situation is keeping yourself safe. If you feel that the situation is dangerous, then you may want to simply accept the bill while remembering details of the perpetrator, including jotting down their license plate number if possible. If you feel that you can intervene safely, try to delay the person while you call your local authorities to take over.