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Updated on Wednesday, January 27, 2021
If an ATM issues you counterfeit cash, the Treasury department recommends that you report it immediately to the U.S. Secret Service or to your local police. Unfortunately, trading in the fake bills for legitimate cash from the government or your bank is just as rare as getting counterfeit money from an ATM in the first place.
There are at least 41.6 billion individual Federal Reserve notes — more commonly known as dollar bills — in circulation, and about 0.0093% of them are counterfeit. If you do run into this phenomenon, read on to find out what you should do and how you may be able to get your money back.
What to do with counterfeit money
If you receive counterfeit money from an ATM, the first thing you should do is go to the bank, which will take care of it from there. If you can’t (or simply don’t want to) go to the bank, the Treasury department recommends contacting the U.S. Secret Service or your local police to report it yourself.
The Treasury department also warns against confronting whoever passed you the fake currency in case doing so would place you in personal danger. You also should:
- Not return the bill to the passer.
- Try to delay the passer, if possible.
- Note as many details of what the passer (and any of their friends) look like and even write down their license plate number should the opportunity present itself.
- Write your initials and the date on the white margins of the bill.
- Not otherwise handle the bill and instead place it in some sort of container, such as an envelope.
- Hand it off to a properly identified Secret Service official or police officer.
- Mail the bill to your local Secret Service office if you can’t make direct contact with a Secret Service official or police officer.
You should not try and spend any fake money you receive. If you do, you could end up facing up to 15 years in prison and/or a fine, according to federal law.
Will you get your money back?
Getting fake money from an ATM — particularly if the ATM is from a reputable bank — can cause justified outrage. After all, that $100 you just got has been deducted from your checking account, and as far as the bank is concerned, the money has been withdrawn and is now your problem.
Banks assess counterfeits case-by-case
Marching up to a bank teller and waving the fake money in their face doesn’t guarantee you’ll get reimbursed. “How would [the customer] prove that they received that bill from the [bank’s] ATM?” said Nessa Feddis, senior vice president and deputy chief counsel at the American Bankers Association.
Banks employ machines to check the authenticity of all the currency they receive before placing it back in circulation via teller or ATM, so an instance of someone getting fake money directly from a bank would be considered a rarity.
“It’s pretty remote that banks would be giving customers counterfeit bills because they check them,” Feddis said, though she still acknowledged it as a possibility. “Something could fall through the cracks, but even then the onus is on the person who has the counterfeit bill to prove that they didn’t create it themselves, that they received it from the bank and they didn’t receive it from somebody else.”
The best chance you have at recouping the loss is if you’re a long-standing customer with the bank you withdrew from. The bank may hear counterfeit claims on a case-by-case basis, and may be more likely to listen to a long-time customer as opposed to someone it’s never worked with.
The government won’t reimburse your losses
Don’t expect the government to be any better at reimbursing you for the fake money you’ve received. The Treasury department notes “there is no financial remuneration for the return of the counterfeit bill, but it is doing the ‘right thing’ to help combat counterfeiting.”
You probably won’t like the fact you have to take a loss on counterfeit money, but at least you can take solace in knowing that nobody else will get burned by that particular forgery in the future.
Insurance company may offer protection
While neither the bank nor the government are a good bet when it comes to getting your money back, salvation can come from an unlikely source: homeowners or renters insurance. Some policies allow you to claim receiving counterfeit money (the exact limit to how much you can claim depends on your individual policy).
How to spot fake money
Given the heartbreak that comes with receiving fake money from an ATM, you may want to pay it forward and learn how to learn the difference between fake money vs. real money to avoid taking bogus bills in other transactions (such as getting change from a retail store).
You may have seen clerks and cashiers occasionally scratch at a bill you’ve given them with a pen meant to detect counterfeit bills, but the Federal Reserve claims these tools aren’t always accurate.
Fortunately, each denomination of paper money contains security features you can spot to help you determine if the bill in your hand is genuine, so long as you know what you are looking for. The $100 bill for instance contains:
- A security thread (visible when holding the bill to the light) immediately to the left of Ben Franklin’s head with “100” and “USA” alternating in a line.
- A 3D security ribbon woven into the bill down its center. When you rotate the bill side to side, you should see “100”s move up and down. When you tilt the bill back and forth, these “100”s will move side to side.
- A color-shifting image of the Liberty Bell in the copper inkwell at the bottom of the bill, visible when holding the money to the light and tilting it up and down.
- A faint watermark portrait of Ben Franklin on the right side of the bill, which should be visible when holding the bill to the light.
- A “100” on the bottom-right corner of the bill that should change color when tilting the bill back and forth under the light.
A more detailed breakdown of each denomination’s security features can be found at the website for the U.S. Currency Education Program, a federal government entity charged with educating users of U.S. currency about the ins and outs of paper money.