By Bob Gibson, Cummins Allison
Advances in low-cost digital printing have made it easier than ever for “ordinary” individuals to produce high-quality counterfeit bills. What was once a sophisticated operation requiring significant technical expertise and financial investment has now become somewhat commonplace. Even recently, a 34-year-old hairstylist was arrested and admitted to producing upwards of $10,000 in fake money using an inkjet printer and a household cleaner.
In 2013, $88.1 million of counterfeit currency was confiscated, an increase of 9% over 2012. Even more significant was the 49% increase in the number of arrests made for charges of counterfeiting — alarming evidence that counterfeiting of U.S. currency is on the rise.
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Cash Is The Most Prevalent Form Of Payment
While many people think the world is going cashless, the reality is that 40% of consumer transactions involve cash. Depending on the industry, cash payments can account for as much as 51% of transactions. Cash is still the most used payment instrument today and, surprisingly, all income and age groups use cash with roughly the same frequency.
With the continued preference for cash, especially given recent large-scale incidents of credit card fraud, it becomes incumbent on retailers that deal with cash to employ the best available methods to protect their organization from the risks associated with this type of fraud.
All It Takes Is Once
For a counterfeiter to be successful, it only requires them to pass the note once. The counterfeiter has more choices than ever in terms of where and how to pass fake cash, including ATMs and self-service checkouts, not to mention the usual choice of retailers, etc. Their goal is to pass off the fake bill and receive real cash in return, and once the unknowing individual or company has the fake, they may either pass it along or try to deposit it at their financial institution.
Regardless of whether a retailer knows a bill is counterfeit or not, the organization that is caught with a fake is stuck with the loss — and a potential fine. For small bills, this may not have much impact, but the majority of counterfeits are $50s and $100s, which can add up to a very costly loss.
Prevention Is The Best Cure
While counterfeiting will never be eliminated, retailers can take action to safeguard their profits. Most retailers that deal with cash use automated technology to count and sort their currency. Today’s currency scanners are reasonably priced investments that increase accuracy, productivity and the morale of employees.
With the advent of newer security features, currency handling systems have become much more sophisticated, incorporating advanced detection technologies such as multiple types of sensors, including:
- Optical ultraviolet (UV)
- Infrared (IR)
- Fluorescence
- Magnetic
An exceptional detection and authentication algorithm supports these technologies. An effective currency processing system has to rely on the information from multiple sensors, and the decision algorithm is relying on a complex, multi-parameter analysis designed into the system by its developer.
Currency scanning equipment with the most advanced form of counterfeit detection, plus the ability to read and record serial numbers, is essential for financial institutions to safeguard against fraudulent currency. Tracking currency by serial number — and retaining this information for future retrieval — as well as using advanced counterfeit detection machines, can lead to significant reductions in the number of false bills accepted, plus an increased understanding of how counterfeits are entering their system.
With this increased prevention and knowledge, organizations can make adjustments to their security strategies and improve their ability to prevent counterfeit money from being accepted.
Click here to view a trendagram on some important facts about counterfeit currency.
Bob Gibson is Vice President of Branch Operations of Cummins Allison, a global provider of coin, currency and check processing technology as well as ATM solutions, based in Mt. Prospect, Illinois. Contact him at [email protected].
