Do ATMs Check for Counterfeit Bills? What Happens
Discover how ATMs verify currency authenticity and the protocols for handling counterfeit bills in both dispensing and deposit scenarios.
Automated teller machines (ATMs) are equipped with advanced technology to detect fraudulent bills. This capability plays a significant role in maintaining the security and integrity of the financial system. It prevents the circulation of fake money and protects against financial losses for banks and their customers. ATMs ensure that dispensed currency is genuine and deposited funds are legitimate.
How ATMs Detect Counterfeit Bills
ATMs employ sophisticated technologies to verify banknote authenticity. They utilize magnetic ink recognition, scanning for magnetic properties in genuine currency. Counterfeiters often struggle to accurately replicate these magnetic features.
Beyond magnetic detection, ATMs also use ultraviolet (UV) light to identify security threads and other features visible under UV light. Infrared (IR) sensors analyze patterns that respond to infrared light. Additionally, ATMs measure the physical dimensions, such as size and thickness, of each bill. Advanced sensors analyze colors, patterns, and watermarks through image recognition and spectral analysis. If a bill fails these inspections, it is flagged as suspicious.
What Happens if an ATM Dispenses a Counterfeit Bill
Receiving a counterfeit bill from an ATM is rare due to extensive detection measures. The U.S. Federal Reserve estimates the chance of getting a counterfeit bill from an American ATM to be approximately 0.01%.
If you suspect an ATM dispensed a counterfeit bill, handle the situation carefully. Keep the suspected bill, noting the ATM’s location, date, and time of the transaction. Immediately contact your bank or financial institution to report the incident. The bank will investigate by reviewing transaction logs, ATM camera footage, and examining the bill to verify its authenticity.
How ATMs Handle Suspected Counterfeit Deposits
When a bill is deposited into an ATM, the machine verifies its authenticity. If a bill is flagged as suspected counterfeit, the ATM rejects it, holds it, or does not credit the amount to the user’s account. The ATM provides a receipt indicating any discrepancies or the number of bills retained.
Once held by the ATM as suspected counterfeit, a bill cannot be returned to the depositor. This immediate retention prevents further circulation of fraudulent currency. The ATM’s internal systems log the event, associating the bill with transaction details.
Reporting Suspected Counterfeit Deposits
After an ATM has identified and retained a suspected counterfeit bill, the depositor must take specific procedural actions. The immediate step involves contacting your bank or financial institution to report the incident. You should provide detailed information about the deposit, including the date, time, ATM location, and the amount of the deposit, along with the transaction receipt.
The bank will investigate the suspected counterfeit bill. Financial institutions are required to confiscate counterfeit currency and forward it to the U.S. Secret Service for verification and investigation. It is important to understand that accounts are generally not credited for counterfeit bills, and there is no reimbursement for fake currency. The individual who deposited the bill will bear the financial loss.