How Common Is Counterfeit Money? Spotting and Reporting Fakes

Counterfeit money refers to currency produced without legal government sanction, often to imitate genuine currency and deceive recipients. This fraudulent activity undermines a nation’s financial system, leading to economic disruptions, reduced value of real money, and direct financial losses. Understanding how to identify and report fake bills is important for individuals and businesses, helping to maintain trust in currency and protect against financial losses.

Prevalence and Trends of Counterfeit Money

The landscape of counterfeit currency is constantly evolving, with law enforcement agencies actively working to combat its circulation. The United States Secret Service, responsible for investigating counterfeiting, works to track and seize fake currency.

While precise annual seizure figures fluctuate, estimates suggest the total stock of counterfeits in circulation within the United States is relatively low. One estimate indicates it might be around $15 million, representing approximately one counterfeit note for every 80,000 genuine notes.

Within the United States, the $20 bill is often cited as the most commonly counterfeited denomination, likely due to its frequent use in everyday transactions. Outside the U.S., the $100 bill is more frequently targeted by counterfeiters, reflecting its higher value and international appeal. Higher-denomination notes, including $20, $50, and $100 bills, are generally the primary focus for counterfeiters due to potential for greater illicit gains.

Counterfeiters continuously refine their methods, shifting from traditional printing presses to sophisticated digital techniques. These include high-resolution printers, specialized inks, and advanced technologies like 3D printing and AI-driven design tools to create convincing replicas. Some counterfeiters also employ “bill bleaching,” removing ink from lower-denomination bills like $1 notes to re-print them with higher denominations on genuine paper. Despite these evolving methods, the overall volume of counterfeit currency remains a small fraction compared to the trillions of dollars in legitimate U.S. currency circulating globally, which was approximately $2.3 to $2.4 trillion as of late 2024 and early 2025.

Recognizing Counterfeit Currency

Identifying genuine U.S. currency involves a simple yet effective “feel, look, tilt” approach, focusing on several security features integrated into the banknotes. The paper itself offers the first clue; genuine U.S. currency is composed of a blend of 25% linen and 75% cotton, giving it a distinctive texture that feels slightly rough due to the raised printing process. Small, randomly dispersed red and blue security fibers are also embedded throughout the paper, which are not merely printed on the surface.

When looking at a bill, several visual elements can confirm its authenticity. Holding the note to a light source should reveal an embedded security thread running vertically through the bill. This thread is positioned differently for each denomination and is imprinted with text, such as “USA TWENTY” or “USA 100,” along with a small flag, visible from both sides of the note. Under ultraviolet (UV) light, this thread will glow a specific color unique to its denomination; for example, the thread in a $20 bill glows green, while that in a $100 bill glows pink.

Another feature visible when held to light is the watermark, a faint image typically located to the right of the portrait. This watermark often replicates the portrait on the bill and is visible from both the front and back. Additionally, genuine bills feature crisp, sharp printing, particularly in fine details like the borders and the Federal Reserve and Treasury seals, where the saw-tooth points should be clear and well-defined. Microprinting, or tiny text, can be found in various locations, such as “THE UNITED STATES OF AMERICA” on Benjamin Franklin’s collar on the $100 bill, which often requires magnification to see clearly. The serial numbers on a real bill should also be evenly spaced and printed with high-quality ink.

Finally, tilting the bill reveals dynamic security features. The numeral in the lower right corner of denominations $10 and higher, such as the “20” on a $20 bill or the “100” on a $100 bill, is printed with color-shifting ink that changes from copper to green when the note is tilted. On the $100 bill, a specialized 3-D security ribbon is woven into the paper, featuring images of bells and “100”s that move from side to side and up and down as the bill is tilted. The “Bell in the Inkwell” on the $100 note also exhibits a color-shifting effect, appearing and disappearing within the copper inkwell as the note is tilted.

Action After Encountering Counterfeit Money

If you suspect you have received a counterfeit bill, specific steps should be taken to handle the situation responsibly and assist law enforcement. Do not re-circulate the suspected counterfeit currency, as knowingly passing a fake bill is illegal and carries significant penalties. Instead, handle the bill as little as possible to preserve any potential evidence, such as fingerprints, and place it in an envelope or other protective covering.

Immediately note the circumstances of how the bill was received, including the date, time, location, and from whom it was obtained. If possible and without putting yourself at risk, observe and remember any identifying details about the person who passed the bill, such as their physical description or any vehicle information, like a license plate number. This information can be valuable for investigators.

The next step is to report the suspected counterfeit currency to the appropriate authorities. Individuals should contact their local police department or the nearest U.S. Secret Service field office. Banks can also assist in the process, as they are equipped to identify counterfeit currency and will forward suspected notes to the Secret Service. The suspected bill should only be surrendered to a police officer or a U.S. Secret Service agent. Reporting these incidents helps authorities track counterfeiting trends, investigate criminal operations, and remove fake money from circulation, thereby protecting the broader financial system.