Compliance Question of the Week

Q: How do I know that someone has passed me counterfeit money? What should I do once I know it’s counterfeit?

The proper credit union procedure is to use a counterfeit pen on all large bills ($50s and $100s). The practice will assure the credit union and our members that we are not passing along counterfeit bills. It may be necessary to check additional bills due to the operation of counterfeit rings and other circumstances. However, it also helps to be familiar with the look and feel of each bill to also help in identifying a counterfeit note.

If you receive a counterfeit:

  1. Do not return it to the passer.
  2. Delay the passer if possible, if you feel it is an intentional act on their behalf.
  3. Observe the passer’s description, as well as that of any companions, to aid law enforcement. If possible, obtain the license numbers on any vehicle used.
  4. Notify your supervisor, who will in turn contact the local police department or the U.S. Secret Service field office.
  5. Write your initials and the date in the white border areas of the suspect note, along with the initials of the person surrendering the bill(s).
  6. Limit the handling of the note. Carefully place it in a protective covering, such as an envelope.
  7. Surrender the note or coin to your supervisor for proper reporting. The designated person will complete the necessary Counterfeit Note Report, Form SSF1604m, and forward it to the local Department of the Treasury, U.S. Secret Service, 501 I Street, Ste 9-500, Sacramento, CA 95814-2322, to determine authenticity.
  8. The member should be given a manual receipt for the transaction. If the suspected bill is deemed authentic, the member will be credited for the amount.

Here’s how to detect counterfeit money:

Look at the money you receive. Compare a suspect note with a genuine note of the same denomination and series, paying attention to the quality of printing and paper characteristics. Look for differences, not similarities. Look at:

Portrait:A genuine portrait appears lifelike and stands out distinctly from the background. A counterfeit portrait is usually lifeless and flat; details merge into the background, which is often too dark or mottled.

Federal Reserve and Treasury Seals:On a genuine bill, the saw-tooth points of the Federal Reserve and Treasury seals are clear, distinct, and sharp. Counterfeit seals may have uneven, blunt or broken saw-tooth points.

Border: The fine lines in the border of a genuine bill are clear and unbroken. On a counterfeit, the lines in the outer margin and scrollwork may be blurred and indistinct.

Serial Numbers:Genuine serial numbers have a distinctive style and are evenly spaced. The serial numbers are printed in the same ink colors as the Treasury seal. On a counterfeit, the serial numbers may differ in color or shade of ink from the Treasury seal. The numbers may not be uniformly spaced or aligned.

Paper:Genuine currency paper has tiny red and blue fibers embedded throughout. Counterfeiters often try to simulate these fibers by printing tiny red and blue lines on their paper. Close inspection reveals, however, that on the counterfeit note, the lines are printed on the surface, not embedded in the paper. It is illegal to reproduce distinctive paper used in the manufacturing of United States currency.

Interested in learning more? Check out Know Your Money or Counterfeit Note Report.


Questions? Contact the Compliance Hotline: 1.800.546.4465,

Posted in Compliance News.