Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.
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 happen to receive fake money from an ATM, consider yourself both very special and probably out of luck. Special because the odds of you actually getting fake currency from an ATM are infinitesimally small, and probably out of luck because there’s very little chance you’ll be able to trade in the fake bills for the real McCoy.
It’s hard to exchange fake money for real cash
Getting counterfeit money from an ATM, particularly if the ATM is from a reputable bank and not a graffiti-covered disaster in a shady alley, can cause justified outrage. After all, that $100 you just got has been deducted from your account, and as far as the bank’s concerned the money’s been withdrawn and is now your problem.
Marching up to a bank teller and waving the fake money in his 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.”
Don’t expect the government to be any better at reimbursing you for the fake money you’ve received. In its instructions on how to return a counterfeit bill to the proper authorities, 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 to the rescue?
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 counterfeit money from an ATM, you may want to pay it forward and learn how to spot fake 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:
Hold the note to light to see an embedded thread running vertically to the left of the portrait. The thread is imprinted with the letters USA and the numeral 100 in an alternating pattern and is visible from both sides of the note. The thread glows pink when illuminated by ultraviolet light.
3-D Security Ribbon
Tilt the note back and forth while focusing on the blue ribbon. You will see the bells change to 100s as they move. When you tilt the note back and forth, the bells and 100s move side to side. If you tilt it side to side, they move up and down. The ribbon is woven into the paper, not printed on it.
Bell in the Inkwell
Tilt the note to see the color-shifting bell in the copper inkwell change from copper to green, an effect which makes the bell seem to appear and disappear within the inkwell.
Hold the note to light and look for a faint image of Benjamin Franklin in the blank space to the right of the portrait. The image is visible from both sides of the note.
Tilt the note to see the numeral 100 in the lower right corner of the front of the note shift from copper to green.
- 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 3-D 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.
- On the right side of the bill a faint watermark portrait of Ben Franklin should be visible when holding the bill to the light.
- The “100” on the bottom right corner of the bill should change color when tilting back and forth under the light.
A more detailed breakdown of each denomination 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.
What happens if you pass the buck?
Suppose for a second you lack any sort of moral compass or conscience—what’s the worst that could happen if you just try and spend that $20 you know is counterfeit? The answer is up to 15 years in prison and as much as a $15,000 fine, according to the law.
Instead, 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 against confronting whomever 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 and delay the passer if possible
- Observe as many details of what the passer (and any of his or her friends) look like and even write down their license plate should the opportunity present itself
- Contact the local police or local Secret Service office
- 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 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
If that sounds like a pain… well, it is. But while you lose money, you gain the satisfaction of getting to play Elliot Ness for a day.