In today’s SD classic column on magnetic stripes on currency it mentions that counterfeiting was becoming a problem. Is this still an issue? Is it becoming better or worse?
The wikipedia article claims that it is thought about 1 in 10000 U.S. notes is counterfeit, which sounds pretty good to me. Compare to an estimated 3% for British 1 pound coins, which are I think considered fairly easy to counterfeit, while still being actually worth it.
The most well known type of U.S. counterfeit bill is probably the Superdollar, which are evidently very high quality fakes usually coming out of East Asia or Russia. We don’t know for sure where they’re coming from, but North Korea is a common suspect.
I think this would be a great column for Cecil to follow-up, so I’m going to call it to his attention. Whether he’ll act on it (and when) is anybody’s guess, of course.
Interesting to note Cecil cited Frank Abagnale, nine years before his story inspired the 2002 Leonardo DeCaprio movie, Catch Me If You Can
I don’t know how much of an issue it is, but isn’t the use of paper notes for anything these days plummeting precipitously as to make this not only a virtual non-issue, but an actual one?
I haven’t used cash to buy anything in well over a year, and I am sure it is not just me. In fact, I don’t even carry cash around with me anymore.
This is my thought, too. Since the time of the column, the number of “common” uses of cash has dropped a great deal, to the point where anyone who spends more than $100 with actual currency on western soil is clearly looking for anonymity, which makes them automatically suspect. Fake bills would mostly have to circulate outside the mainstream economy (e.g. areas with underdeveloped banking systems) and could only filter into the mainstream at a very low rate.
I’m assuming most of the counterfeit bills are used outside the US. My understanding is that in non-western countries the USD is the standard black-market currency, which is a boon for the US economy. USD’s leave the country (usually in trade for goods and/or services) and then are passed back and forth outside the US, in effect giving the US economy a free loan until the bills are returned.
In some countries over here, it’s virtually impossible to exchange US$100 bills. Even the banks will refuse them for fear of counterfeits. Doesn’t seem to be a problem in Thailand though.
Wow, I hope not. Hard to believe that people are looking at me with suspicion when I buy an expensive pair of shoes at Nordstrom using cash. I have no need or desire for anonymity; I just find it much easier to manage my budget on a cash only (except for internet purchases) basis. Not sure if it matters that I never use $100s – my payments are almost exclusively in $20s, since that’s what I get from the ATM.
Many low-income people still use cash. They either can’t afford monthly banking fees or can’t afford to keep a minimum balance in their accounts.
I still see a fair number of people paying for groceries with cash. There might be some trades that still do a mostly cash business.
I had problems with my ATM card at one point, so I would go into the bank to get cash. They automatically tried to give me 100s and 50s and I had to tell them to break it down to 20s. Lots of places just won’t take bills of that size any more and it’s not worth the hassle.
SpoilerVirgin, it’s not so much the use of cash that’s an issue. It’s that peeling off of a huge roll of 100s will set off mental alarms.
There’s an upscale mall near me where the ATM gives out $100 bills.
I was in Ecuador for a few days last year. They don’t even bother with their own money, anymore; the US$ is their legal currency.
A lot of counterfeiters have switched from cash which is difficult, bulky, and can get you in trouble if you pass it off to stealing credit card and bank information. It’s way more profitable and easier to handle.
Target just had over 40 MILLION accounts stolen from it – probably directly from its Point of Sales terminals. Apparently the thieves are asking for $100 per number. That’s 4 billion dollars in profit.
I just read in Electronista that thieves drained bank ATMs by putting malware on USB drives. Really? The thieves drilled a hole in the ATM to expose the USB port, then downloaded the software onto the ATM. They then plugged up the hole to prevent detection.
The ring had couriers go around to the various machines and put in a 12 digit code to start the malware. This would display the number of the various bills in the machine. The courier would then call the ring, report the number of the various bills, and get a 12 digit code to put into the machine to drain all of the currency.
The thieves did this because they didn’t trust their couriers with all that cash. This way, the thieves knew how much each courier was suppose to bring back. I would hate to be that courier who dropped a bill on the way back to the office.
Reminds me when I worked with the military. I was not allowed to take my phone in because it had a camera, and I might take a picture of the computer screen and get information I wasn’t suppose to have.
However, they had no such policy against USB thumb drives. They did plug up empty USB ports as protection against a USB drive. However, I could unplug the mouse and stick the USB drive in that port. You can easily operate a Windows PC without a mouse.
Not that, as a loyal American citizen, I would have ever done such a thing, so there’s no need to come over to my house at 2AM and drag me away. Did I mention how much I love my country?
When we were in the US a couple of years ago, we paid for a lot of stuff that came to more than $100 in cash. No one batted an eye. And I was a little surprised too at how easy it is nowadays to surpass $100.
My Dad (RIP) used to carry two wallets, one that contained ~$500 (1 or 2 $100s, the rest in smaller increments) and another ‘money clip’ style that always had $2000-3000 in $100s. He hated using credit cards and a debit card was out of the question.If something cost more than what he had in his pocket, he would write a check.
He once closed two (quite large) accounts at a bank because they insisted on asking him for his ID, every time he came in. His stance was, “As much money as I have in their bank, they need to remember who the hell, I am.” 
Suffice it to say, he was kind of ‘old fashioned’. 
FWIW, I frequently have a pocketful ($500-1000) of $100s, as I prefer paying in cash and have never had a problem using them. YMMV
Granted, there are some businesses that won’t accept them and require a smaller bill. 
I try to/usually have at least $100 in smaller bills to deal with that, when the situation occurs.
Working in a retail establishment I’d say the number of people who are truly cashless in that sense equal the number of people who are still strictly cash-only. Maybe some folks regard the cash-only crowd as some sort of shady criminal class but I find it hard to believe that of a little old person hunched over a walker with two hearing aids and a hand tremor. Maybe they’re a great actor with a good disguise, but…
More common is someone who uses cash for purchases under a certain amount and plastic for anything above it. The dividing line between the two ranges from $5 (many small merchants have that or $10 as a minimum for a card due to fees charged to the merchant by the card services) to about $20. So the vast majority of people we see carry between $10 and $50 in cash but not more than that. I think that will continue to be the norm for quite some time.
There was a debate over here last year about phasing out cheques, and many people suggested that cash would go the same way. It seems that cheques will still be around until 2018, provided that an alternative system is available by then. Most supermarkets don’t accept them any more, anyway. The BOE has recently announced that our ‘paper’ currency will be replaced by plastic film in 2016.
The main problem I can see, is how to pay the small mobile trader for his services. The tree surgeon wants £150, the Decorator wants £250, and so on. The garage that services my car stopped accepting credit cards recently due to high charges. He still takes cash or cheques though.
The obvious solution, it seems to me, is for me to be able to do a direct bank-to-bank transfer using a smartphone. The security might be a worry though.
There is also the problem that not everyone has a smart phone.
At the customer service desk as the supermarket a couple weeks ago there was a guy buying a money order. The clerk told him it would be something like $1030. He pulled out a money clip. My eyes rolled thinking about how long it would take for the clerk to check each $20 bill. But he used a bunch of $100 bills. The clerk did several inspections (hold it up to overhead lights, then under a black-lighty looking thing). Not very long.
At some places I get the special currency pen check each time I use a twenty. While those don’t catch all counterfeiters, it discourages most people from trying and any that passes the test is likely to sail thru the store’s bank so they aren’t likely to take the loss even if it is fake.
Walking around with over a grand on me all the time would cause a nervous condition. (Remember when we used to say “cause an ulcer” in such contexts?)
As to the OP, for all the worry about how the US notes are not as sophisticated as others, they seem to manage well. The big hangup for the Fed is the $100 note, it’s the first to get any tweak. At the opposite end the $1 note still retains the pre-1995, so I suppose they’re thinking, who’s going to waste time on perfecting something that won’t even buy one beer any more.
As to use of denominations, twice in the past year I have come across regular streetside bank ATMs in the US that dispensed 50-dollar notes (locations: Miami, Baltimore). This caused me to :rolleyes: because of the hassle you encounter with many small merchants when you show up with a 50 or a 100.