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Catching Counterfeit Cash

By Julie King |

Recent news stories that warned of 'dangerous levels' of counterfeiting in Canada have raised concerns with Canadians.

Yet while counterfeiting did spike to unacceptable levels in 2004 (and this is important for Canadians to know) there has also been an equally sharp decline in the past two years that largely resulted from aggressive actions taken by the Bank of Canada.

In fact just one year after steps were taken to make notes more secure the counterfeiting rate had dropped by 25%. The decline in 2006 has been just as aggressive, with counterfeiting rates dropping over 25% in the first three quarters of the year.

A large part of the decline can be attributed to enhanced security features that were first added to $20, $50 and $100 bills in 2004. (One year later the $10 bill was upgraded to include these features and the $5 bill was upgrade in November 2006).

The real point seems to be that it is now possible for all Canadians to protect themselves from counterfeit fraud without any special equipment. There are many simple ways to check whether a bill you receive is legitimate. The need for public awareness and education seem to be the real story.

With that in mind we spoke with Monica Lamoureux, a senior analyst with the Bank of Canada, to find out what information consumers and merchants need to spot fake currency.

Changing behaviour

"Essentially we need to explain to consumers and cash handlers that we can have a suite of security features, but if people don't check them we won't solve the problem," says Lamoureaux.

Similar to the visual check merchants are expected to do when they receive a credit card payment, Lamoureux hopes that people will learn to check bank notes they receive to confirm their legitimacy.

"It is very easy to do," says Lamoureux. "If you follow the online training in about 20 minutes you will know what you need to know to detect counterfeit notes."

Spotting counterfeit currency

Even before you look for security features, Lamoureux advises you to consider how the note feels, as this is one of the first thing people usually notice when they are given counterfeit money.

If you have a counterfeit bill the notes will feel waxier and won't have the embossed printing found on legitimate currency. "Flat and glossy" are the words they usually use to explain what might be wrong with a counterfeit bill, explains Lamoureaux. The crispness of the colour is another key indicator.

Spotting counterfeit cash: 4 key security features

The newer "Canadians Journey" series notes are easily identified by the holographic strip on the left side of the front of the bill. These have four security features that can be quickly checked without special equipment.

  1. Holographic stripe: located to the left of portrait on the front of the bill. If you tilt the note back and forth you will see 2 maple leafs that will change colour as you move the bill. Also, there will be small numerals in the background that match the amount of the currency. For example, on the $20 bill you will see small twenties.
  2. Watermark portrait: in the white space just to right of portrait on the front of each new bill you will see a watermark version of portrait and the number that corresponds to the currency amount when you hold the note up to light. This security feature can be seen from both sides of the note.
  3. Featured number: the front and back of each bill have some irregular marks that merge perfectly to form the number of the currency when you hold the bill up to the light. For example, on the $10 bill the broken lines turn into a perfect ten. Counterfeit bills will not have a perfect match.
  4. Dashed lines: on the left side of the back of the note the dashed metallic lines will shift from gold to green as you tilt the bill. Inside in tiny type you will see the letters CAN followed by the denomination of the bill. Hold the note up to the light and the dashed lines will merge to form a continuous dark line.

Lamoureaux notes that you should check at least two security features, as a counterfeiter may perfect one of the features when producing illegal currency.

Other security features & older notes

There are many other features that you can learn about and check as well. For example, bank notes also have ultraviolet (UV) threads scattered randomly on the bill along with the words Bank of Canada and the denomination.

The use of UV threads on the newest series of bills is even more sophisticated, as the colours are red and yellow intertwined to form images and words, whereas there were only blue and red ultraviolet threads previously.

It is also important to note that the original $5 and $10 bills in the Canadian Journey series did not have all of the security features mentioned above. In May 2005 the $10 bill was upgrade to include these features and on November 16, 2006 the $5 bill was also upgrade.

With older notes in circulation it is important to make sure your staff knows how to spot older counterfeit bills as well as new ones.

The original $5 and $10 notes in the Canadian Journey series had a cluster of three iridescent maple leafs in the same area where the watermark is located on newer notes. The leaves change from a faint image to a shiny gold colour when you tilt the note back and forth. These notes also had a hidden number to the left of the portrait on the bill. When you hold the note at eye level and tilt it slightly a number 5 or 10 will appear on the bill.

What to do if you receive a counterfeit bill

Each business that handles cash should have a policy for identifying counterfeit currency and dealing with a situation when counterfeit money is received. The following advice from Lamoureaux and the Bank of Canada website provides a good guideline.

  1. If you suspect that a bill is counterfeit, look for problems with other security features. Try to identify problems with at least 2 security features.
  2. Always put the safety of yourself and your staff first.
  3. If you are convinced that the bill is counterfeit, stop the transaction and inform the customer that you believe the note is suspicious. Inform the custom that it is both your company policy and required by law for you to keep the note and hand it over to the police.
  4. You can explain that while you have checked several security features and suspect the note because of problems with two or more of these features, the police are the only people who can determine whether a bill is counterfeit or not.
  5. Make sure that you don't question the integrity of the person who has given you the note, as he or she may be an innocent victim.
  6. Do not return the note to the passer. If the person becomes hostile or you are concerned that they may become physical call 911 immediately.
  7. Immediately contact law enforcement on a non-emergency line if the person who gave you the note is cooperative. If at all possible try to keep the person on hand while you wait for the police.
  8. You should make notes about what has happened, describing the person who gave you the note as well as the date and time that the note was received.
  9. When the police take the note, ask for a receipt.
  10. The police will send the bill to the RCMP, who have a special lab where the note will be analyzed. If the note is legitimate it will be returned.

The Bank of Canada website notes that keeping a suspect note does not imply that you have accepted it as payment. Also, it is illegal for anyone to knowingly pass along a counterfeit note, so if someone demanded the return of the note it would be illegal for them to try to pass it off on another unsuspecting person or merchant.

Since counterfeit bills are not exchanged for valid currency, the last person "holding the note" is the one who will take the loss. As a consumer you have the same rights as a merchant. If you suspect that a business has given you a counterfeit bill, follow the steps mentioned above. You have the right to refuse a note if you are given it in change and believe it is counterfeit.

Withdrawing your currency from a bank's ATM machine does not guarantee that you will receive "clean" notes. While there are processes in place to ensure that the bills in the bank machines are genuine, counterfeit notes do slip through the cracks. Therefore you should check these bills as well.

If you find a counterfeit bill you should go into the bank immediately if it is open or contact the bank if that isn't the case. It is up to the branch to decide whether they will reimburse someone who alleges that they received counterfeit money from a bank machine.

Free educational resources for merchants

If your business regularly receives cash payments it only makes sense to invest in counterfeit detection training for yourself and your employees. You will want to learn how to spot counterfeit bills from both the new Canadian Journey series and older notes as well.

The Bank of Canada has taken many steps to help business owners with this task and provide a variety of straightforward, useful resources -- free of charge. These include:

Online training: the Bank of Canada website has a series of training modules that provided a detailed explanation of things like the security features on the new Canadian Journey series notes. They also have follow-up quizzes for each training module. The web based training can also be ordered on CD, with the first copy available free of charge and additional copies available for a $5 charge.

Printed materials: the Bank of Canada also offers a number of printed resources that include a leaflet, booklet and posters. The selection includes materials targeted at consumers and others designed for use by businesses.

Training sessions: these are conducted by regional offices that go on site, again free of charge, to train you and your employees on counterfeit detection. For more information on training sessions contact the Bank of Canada by phone (Toll-free: 1-888-513-8212 ), Fax (613 782-7533) or email (

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