The counterfeit challenge
Up to 1 per cent of UK banknotes in circulation may be fakes. What should you look out for?
Sunday 29 October 1995
The Bank of England and the National Criminal Intelligence Service believe Greene King is over-reacting. They say authentic notes have security features that make them distinguishable from counterfeits - even in a smoky pub environment. These features can be checked properly by sight and touch alone.
In the three years to 1994, counterfeit money mushroomed by more than 200 per cent; by May this year, more funny money had been seized in Britain than in the whole of last year. The South-east Regional Crime Squad recently smashed a counterfeiting ring operating out of east London, and in May the National Criminal Intelligence Service announced a haul of pounds 18m in unused pounds 50 notes.
Bank of England figures show forgeries running at a small fraction of 1 per cent of the total currency in circulation - just over pounds 19bn. The Labour MP Dale Campbell-Savours believes that closer to 1 per cent of all notes are fakes. A worry is the potential effect on the money supply and inflation.
Bill Tupman, former director of the Centre for Police Studies at Exeter University, says counterfeit money is often distributed by criminal networks also involved in drugs - the forged cash can be sold at a discount to stimulate demand for drugs.
Counterfeiting is becoming more and more accurate, employing hi-tech colour photocopying and state-of-the-art scanning techniques.
The Christmas season commands particular vigilance from shops. Although of dubious worth, counterfeit detection machines are now standard, and staff who handle cash are trained to spot the duds. The shopping public might be well advised to check their money before leaving the till. What price a few moments of embarrassment holding up the queue, compared with being stuck with a worthless imitation of a tenner? Especially when the shop, post office or bank is not required by law to reimburse the recipient of the dodgy note they have left. In practice, some do help out in the name of good customer service.
Occasionally bad notes have been issued through cash tills. If this happens to you, go to the offending bank as soon as possible to try to claim a substitute.
It is an offence to pass on a forgery knowingly. You are meant to hand duds over to the police. If the banks intercept a suspected forgery as it is being paid in, they have to forward it to the Bank of England. You will not be compensated. A bank will give you a receipt, but you will only get the note back if it's genuine.
Ultraviolet lamps are used in most banks, chemical pens in some, to detect the fakes, although the devices are not recommended by the Bank of England. Many notes outsmart the machines. Chemicals can be applied to simulate the effect of rag paper - on which sterling is printed. Normal wood-based paper fluoresces under ultraviolet light, while cotton-based rag paper stays dull. Detection machines have also been known to incriminate genuine notes.
Recommended checks are outlined in the Bank of England's Know Your Banknotes leaflet, available at banks and building societies, or direct from the Bank at Threadneedle Street. The paper should be relatively crisp and rough to the touch, and intaglio printing makes lettering stand out. The watermark should be barely apparent until held up to the light. Windowed metallic thread should appear dashed until held up to the light, when the strip looks continuous. Also the printing must be clear, the lines sharp, and the colours distinct. pounds 50 notes have an additional security feature - a silver foil medallion and rose.
Some say the ultimate check, although not endorsed by the Bank of England, is to tear across the metallic thread. The way the strip is woven in has not yet been counterfeited.
The British forgery problem, however, pales into comparison beside that of the US dollar. In Russia alone, where the dollar is in effect the second currency, an estimated $4bn (pounds 2.7bn) of $20bn notes in circulation may be fake.
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