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Money and Finance

Counterfeit Money

What is it?

Counterfeit money is fake money that people try to use as real money. People called forgers try to make fake money that looks exactly like real money. Then they use the fake money to buy things.

Why is it so bad?

Making counterfeit money is like stealing. In some ways it is even worse than stealing because everyone pays a price when others use counterfeit money. Counterfeit money reduces the value of real money by increasing the prices of goods. It also causes people to lose confidence in real money.

Committing forgery of money is a serious crime in the United States. People caught forging money can be fined and sent to prison for up to 15 years. In other countries the punishment is even worse. In China people can be executed for producing or smuggling counterfeit money.

Is this something new?

Counterfeiting money has been around since money was first invented. One of the first methods of counterfeiting was when people would "clip" off the edges of coins to get metal in order to make new forged coins.

Preventing Counterfeiting

Today, a lot of technology goes into making money that is difficult to counterfeit. Some of these measures include special paper, special ink, multiple colors, holograms, and watermarks. They also use special printing techniques that are not easily faked.

How to Detect Counterfeit Money

The best way to tell if a bill is counterfeit is to compare it to a genuine bill and look for differences. Look at the clearness of the portrait, the seals, the border, and the serial number. The lines should be clear and unbroken, not blurry.

You can also examine the paper. It should have tiny red and blue fibers embedded inside it. It also should have the distinctive feel of real money. Compare how the real bill feels with the suspect bill.

What do I do if I get some counterfeit money?

If you think you have some counterfeit money, the first thing to do is DON'T USE IT. If you use the money you could get into big trouble, especially if it is discovered that you thought the money might be counterfeit.

Next, you should call the police or the local U.S. Secret Service Office. Don't do anything that might put yourself in danger. The U.S. Department of the Treasury asks that you don't handle the bill. Put it in an envelope or plastic bag. This will protect any evidence they may need. Then hand the counterfeit money over to a Secret Service Special Agent.

Note: Unfortunately, you will probably not get your money back. The government does not reimburse people for counterfeit money. It may be that your home owner's insurance covers it, however.

Do people still try to counterfeit money?

Yes. Lots of people still try to counterfeit money. Each year the U.S. Secret Service arrests thousands of people for counterfeiting and seizes millions of dollars in counterfeit money. Most of this fake money was made outside the United States.

Interesting Facts About Counterfeit Money

Learn More about Money and Finance:

Personal Finance

Filling out a Check
Managing a Checkbook
How to Save
Credit Cards
How a Mortgage Works
How Interest Works
Insurance Basics
Identity Theft

About Money

History of Money
How Coins are Made
How Paper Money is Made
Counterfeit Money
United States Currency
World Currencies
Money Math

Counting Money
Making Change
Basic Money Math
Money Word Problems: Addition and Subtraction
Money Word Problems: Multiplication and Addition
Money Word Problems: Interest and Percent


How Banks Work
How the Stock Market Works
Supply and Demand
Supply and Demand Examples
Economic Cycle
Adam Smith
How Taxes Work
Glossary and Terms

Note: This information is not to be used for individual legal, tax, or investment advice. You should always contact a professional financial or tax advisor before making financial decisions.

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