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How Counterfeiting Works

        Money | Scams

Detecting Counterfeit Money
When the new $20 bills hit the streets, this educational poster was immediately made available at the The New Color of Money Web site, for use in schools, libraries and many public facilities.
When the new $20 bills hit the streets, this educational poster was immediately made available at the The New Color of Money Web site, for use in schools, libraries and many public facilities.

Although Nelson did create good reproductions, they could not be perfect reproductions. For example, the ink printed onto real money is not completely absorbed by the paper. This is especially true of the black ink and the color-shifting ink. The ink therefore leaves a texture on the paper that is easy to feel, especially when a bill is new. Your inkjet money will not have this feel, and neither did Nelson's. An easy way around this defect is to crumple up the money so it feels worn.

A more important problem, however, is that some of the inks used by the government are magnetic. Vending machines, for one, are sensitive to these magnetic inks and use them to detect counterfeits. The treasury is also scanning bills regularly to detect counterfeits. According to an article from Wired Magazine, titled "Junior Mints":

"Of the 24.5 billion scanned and sorted last year, half were $1 bills. They last 18 months in circulation and may be scanned four or five times a year. A $100 bill may be scanned every four years or so; people hold on to them far longer, on average. Details about how, exactly, these superscanners distinguish good bills from bad are closely guarded. Vending machines, for example, might compare the size of margins on the front and back (looking for telltale out-of-register printing), or scan the portrait, or sense the location of magnetic ink that the bureau uses only in certain parts of the bill. "These machines are much better than that," says Rosanna Pianalto, a policy analyst at Fed headquarters in Washington, D.C. Each machine has 30 kinds of sensors, and some no doubt pick up covert security features."

As the counterfeit bills get used in vending machines and rejected, or as they make their way into banks, where human tellers can feel the difference, or when they get into the hands of an attentive convenience store worker who rejects them, or when they make their way back to the scanning machines at the U.S. Bureau of Engraving and Printing, they are detected. Once they are detected, that alerts authorities to a counterfeiting problem in a certain area of the country. Heightened vigilance, along with news stories and public service announcements, helps to make detection easier. And eventually the counterfeiter gets caught.

With teenagers who are casually counterfeiting, capture is often instantaneous. Teenagers usually make very stupid mistakes when they create counterfeit bills:

  • The colors are off
  • The paper is wrong
  • They print on only one side
  • They give the money to classmates who report the crime

Therefore, punishment is swift and sure.


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