Put an end to money trouble

As long as there has been money, someone, somewhere has been trying to copy it. Even in the 5th century BC, forgers were plating up copies of Lydian coins, which is why the practice has sometimes been called the second oldest profession in the world.

Bringing things up to date, court reports from 2013 show counterfeit cases prosecuted include those brought by the Serious Organised Crime Agency involving £1.3m-worth of fake notes, and another from West Midlands Police and the City of London Police, with in the region of £340,000-worth of fake notes taken out of circulation.

Overall, about 680,000 banknotes with a face value of £11.5m were taken out of circulation last year. Of these, most (416,000) were twenties, reflecting the fact that with 1,792,000,000 notes in circulation, the £20 is by far the most prevalent denomination. Tenners come in second in the fake stakes with 244,000 counterfeits out of 723 million genuine notes, and fivers trail behind with a mere 5,000 fake notes out of 310 million genuine ones.

As Bank of England chief cashier Victoria Cleland is quick to point out, the forgeries are a small proportion of the three billion genuine banknotes with a face value of more than £55bn that are in circulation. “Only a tiny fraction of 1% banknotes are counterfeit,” she asserts. However, she says she understands the impact that this can have on a business. “Although it’s a small percentage, we are very aware that it’s an extremely important issue for businesses.”

The issue for businesses is that, once accepted, the notes are worthless and retailers who accept them are not entitled to any compensation.

Cleland says that one of the Bank of England’s key roles is to maintain confidence in the currency, and that fighting counterfeiters is part of that mission.

Loss prevention manager for AF Blakemore Mark Stevenson says that while fake notes are not a major issue for the group, staff are continually trained to be vigilant. “My stores are vigilant so maybe that’s why I am not a target,” he says.

Where fake notes are passed they tend to be £20s and a register is kept to inform stores if regular notes turn up. If a fake is successfully passed to the store, staff are retrained and, if necessary, disciplined.

Fake-detecting technology

Most retailers will use or be familiar with the UV lamps and pens. A good UV lamp should emit light at about 365 nanometres to check the ultraviolet features on all the notes, according to the BoE. LED devices tend to emit light that is greater than this and is therefore not recommended by the BoE.

When it comes to pens, make sure they are looked after as old and dirty pens can be unreliable. Also some fake notes are treated in a way so as to give the same reaction as a genuine note. Therefore, when checking notes, it’s as important to rely on several look and feel tests as it is on the fake-detecting technology you may have.

Cleland says that vigilance is everything. “We would encourage people to make a habit of looking at two or three different features to check for counterfeiting, not just one, and to be vigilant. The most important thing is to check the note before it is placed in the till because once you’ve formerly accepted it it’s not worth anything.”

She says that many forgeries don’t stand up to close scrutiny. “Some forgeries are very good, but a lot aren’t when you look at them closely. They can be easily identified using our educational materials. I go into shops and a lot of people don’t check the notes.”

More help in the fight against the counterfeiters is on its way in 2016 with the introduction of the polymer note. Polymer, made from polypropylene, is a thin plastic film which is coated in layers of special ink to carry the design features of banknotes. The new notes will be smaller than existing currency and feature transparent panels. This and other features make notes much harder to forge as to produce a high-quality counterfeit polymer banknote requires a high level of expertise and is a slow, expensive process.

Another plus is the longevity of polymer notes. Typically, banknotes last for between three and four years; certain denominations such as the £5 have shorter lifespans than say £50s because of the nature of their use. And, as a bonus, the notes are incredibly tough, which should improve the state of bank notes going through your tills. Last year £12.5m-worth of claims were received by the Bank of England for torn, chewed, washed, contaminated or fire- and flood-damaged notes.

The first new polymer note will be the smallest, the £5, featuring Sir Winston Churchill, as it has the lowest volume circulation. The idea is to help customers and businesses get used to the idea and to make sure systems (in particular ATM machines) are in place before the major rollout.

The following year a polymer £10 featuring Jane Austen will appear. A decision on the £20 and the £50 will follow.

England is the 26th country to issue polymer notes, following Canada, Fiji, New Zealand and Australia, which developed the first. Various countries have had differing experiences, with countries that have involved the business community faring better. Says Cleland: “In Canada (where polymer notes were introduced in 2011) it was a quick and efficient process because they had the systems in place to start, which is the key. Where there have been difficulties has been where the cash-handling technology has not been ready. We have been working with business to make sure this doesn’t happen here.”

While Scotland still hasn’t made a decision to adopt the polymer note, Scottish retailers will be the first in Great Britain to experience handling them when, in March next year, Clydesdale Bank will introduce two million £5 limited-edition polymer notes to coincide with the 125th anniversary of the opening of the Forth Bridge.

In fact, Scottish retailers may see polymer notes this year when RBS issues the £5 Ryder Cup commemorative polymer note to ticket-holders of the golf event. These are legal tender, but will be more likely be kept as keepsakes.

Cleland says that businesses need to embrace the change. “It’s important to show people there is a lot to look forward to with the new notes. The experience in many countries has been a significant fall in counterfeiting since their introduction.”

To help business and public alike, the BoE will be adding to the wealth of educational material available on its website with information on the polymer note prior to its introduction. In the meantime, retailers can download the Take a Closer Look brochure at www.bankofengland.co.uk and via the Bank of England Banknotes app.