Identifying Counterfeit Currency

Updated: June 30, 2010

I was speaking with a friend in the business community and she asked me about counterfeiting. I laughed and asked her if she meant as a vocation or how to avoid becoming a victim. Once we established it was the latter, I had to admit I had no idea, how to identify a counterfeit bill. Thankfully I work with some great people who do. After a few emails and a bit of research I was able to find out just how much technology and expense is put into protecting our currency from being de-valued in the marketplace through counterfeiting.

In Canada the crime of counterfeiting has been on the decline since 2004. Increased education, better enforcement strategies and enhanced security features on banknotes has made it increasingly difficult for criminals to produce good quality counterfeit notes. Technology however is a two edged sword and it cuts both ways. If technology can help us protect our currency, then technology can also be used to reproduce not only the visual aspects of a note but also the non-visual attributes such as the texture (feel) of the bill. I don't want to get into a technical discussion on how criminals and organized crime are perpetuating these crimes. Instead I think it's more important to share some basic information on how the business community and average citizens can identify legitimate and counterfeit bills.

On Canadian banknotes there are four security features to help you identify a legitimate bill and make it more difficult for would be counterfeiters to introduce high quality bills into the market. Remember when no one would accept a $100. Do some research into the Wesley Weber case; you'll be shocked by how much impact this sort of crime can have at a national level.

  1. Holographic Stripe. On the left hand side of the bill there is a holographic (metallic) stripe. When the note is tilted images of maple leafs and the notes denomination will appear to move up and down the note. There is also a colour split within the maple leaves.
  2. Watermark Portrait. When held up to the light you should be able to observe a ghostlike portrait of the Prime Minister on the note. The image appears to the left of the large numeral.
  3. Colour Shifting Thread. When held up to the light you'll be able to see a pattern of exposed metallic threads running down the bill through the large numeral. Threads shift from green to gold as the note is tilted.
  4. See-Through Number. If you hold a note up to the light. Just to the left of the large numeral you'll notice two irregular marks on the front and back of the bill. If you move the bill around the pieces should form a smaller see through version of the numeral to the right.

It's important to note that it's not only Canadian currency that is counterfeited. American money, credit cards, passports and other identification are also reproduced and passed. You've got to understand that crime is a business period. In order to turn a profit the criminal must be able to produce enough currency to either sell wholesale or attempt to introduce into the system. This is a lot more difficult, not to mention cost/resource intensive method of making money. You've got to have a lot of counterfeit money to make a profit, because when and if you can find a buyer, it's going to be sold for pennies on the dollar. Credit card fraud and identity theft are much easier to perpetrate and have a much higher rate of return. I've discussed Identity Theft in other articles

The Americans have taken a slightly different approach to security. In the past banks and businesses tested the paper that the note is printed on through the use of a special pen. Counterfeiters used methods such as "washing" or "bleaching" bills in order to re-print them in higher denominations. Tests using the pen would then give a false positive reading that bill is legitimate. The best way to test American bills is by the use of a UV light. There are UV strips in each banknote colour coded to identify it as the appropriate denomination. Even if the note is washed it will still retain the UV strip from the original denomination.

There are seven security features on American bills that will verify their authenticity.

  1. Watermarks. Watermarks are transparent images of the denomination appropriate President embedded into the paper of the note. They are in the open field on the right side of the note and are viewable when held up to a bright light.
  2. Microprinting. This is incredibly small print and pictures (flags etc) that can only be seen under magnification. Attempts to copy it result in printing that distorts, blurs or disappears altogether.
  3. Security Thread. Embedded directly into the notes paper at different points for each denomination. They are visible under bright light and glow a different colours under UV light. There is also microprinting on the thread.
  4. Embedded Fibers. Banknotes are actually not paper. They are made up of 75% cotton and 25% linen. Authentic banknotes have red and blue fibers embedded directly into the banknote.
  5. Larger Offset Portrait. Newer bills (post 2008) have a much more detailed Presidential portrait offset to the left to provide more room for the watermark.
  6. Fine Line Printing. The extremely fine lines visible behind the buildings and portraits are difficult to reproduce and tend to distort when reprinted.
  7. Colour Change Ink. The "green" printed numeral in the bottom right corner of the note will change to black when viewed from an angle.
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