Money makes the world go ’round. Unfortunately, some people choose to create money rather than earn it. As modern printing technologies grow more advanced, counterfeit money becomes harder to spot. And for gold or collectible coins, you might even have to rely on an expert to avoid ending up with fool’s gold.
Here are some tips to identify counterfeit and fake money. Learn these tricks to avoid scams and protect your money.
Learn the Identifying Features of US Currency
All Federal Reserve notes carry certain standard features that help identify them as genuine. Look for these items that signal a bill is genuine:
- All bills have raised printing, which gives genuine notes a specific texture.
- All notes are printed on paper that is one-fourth linen and three-fourths cotton, and that contains red and blue security fibers.
- The front sides of all bills have the Federal Reserve Bank seal on the left and the U.S. Treasury seal on the right.
- Most bills printed since Series 1996 have a combination of 11 letters and numbers — in a sequence of two letters, eight digits and one letter — appearing twice on the front of each note.
- Note that $1 and $2 bills still have the combination of 10 letters and numbers — in a sequence of one letter, eight digits and one letter — used through Series 1995 notes.
Additionally, the seals and portraits of counterfeit bills often lack sharp edges. While familiarizing yourself with these identifying features is only the first step in prevention, some counterfeiters are sloppy and forget to include them.
Look for Security Features Specific to Each Bill
Each U.S. bill carries its own set of identifying marks. For example, here are some security features embedded in the $100 bill:
- In the lower-right corner, the number “100” is printed with color-shifting ink, which changes from copper to green as you tilt the bill.
- Embedded in the inkwell to the right of Franklin’s portrait is a bell printed with color-shifting ink. It seems to appear and disappear as it changes from copper to green on a copper background.
- Woven directly into the center of the bill is a multi-feature, 3-D ribbon. As you tilt the bill, bells in the ribbon change into 100s. Move the bill in another direction, and the bells and 100s will move side to side or up and down.
- Hold the bill to the light, and a watermark of Benjamin Franklin’s face appears on the far right. This watermark is visible from both sides of the note.
Keep an eye out for these identifying markers. Hundred-dollar bills are prime targets for counterfeiters.
Buy Gold and Silver Coins Only From a Reputable Dealer
If you’re planning to invest in gold or silver coins, remember that coin scams come in many varieties. For example, some counterfeiters punch a coin out of a lesser metal, such as copper or zinc, and apply a fine layer of gold or silver to the top. To the untrained eye, the result looks like an authentic gold coin. Another scam involves putting fake coins into sealed coin holders, as if they have been graded and certified by a professional organization.
The best way to avoid these types of scams is to deal only with reputable dealers. While the coin dealer advertisements you see on TV might be compelling, it’s best to find a dealer from a professional industry organization. The American Numismatic Association and the Professional Numismatists Guild are both excellent sources of reputable dealers.
Additionally, you should verify that coins are legitimate by using a precise scale and measuring equipment. Coins have very specific dimensions and weights. If possible, measure and weigh your coins. If a counterfeiter is using a lesser metal as a base, the size of a fake gold coin might be slightly enlarged to get the correct weight.
Check for Common Flaws With Collectibles
Although some coins could make you a millionaire, watch out for common flaws before you buy. Flaws are often specific to particular coin types.
For example, here is a list of commonly spotted mistakes with the Morgan dollar, a popular silver dollar collectible minted between 1878 and 1904 (and again in 1921):
- Poorly struck numbers in the date due to the use of different fonts.
- Poorly struck letters on the reverse, especially the “r-i-b” found in “E Pluribus Unum.”
- Poorly aligned mint marks. Coin grading agencies have been advised to look out for mint marks — such as the “O” representing the New Orleans Mint — that are crooked or struck at an angle.
Other coin types generally have their own common flaws, as well. A coin guidebook — or reputable dealer — can help you identify which coins to avoid.
Research the History of Your Investment
Some fakes are easy to spot because they simply shouldn’t exist. For example, some counterfeiters have placed the “D” mint mark of the Denver Mint on fake Morgan dollars. The Denver Mint didn’t open until 1906, however, two years after the end of the original print run of the Morgan dollar. Thus, if you have a Morgan dollar with a “D” mint mark — unless it is dated 1921 — you have a fake.
In addition to the Denver Mint error, many counterfeit Morgan dollars bear the Carson City Mint “CC” mark in error. A common example is the 1895-CC, a year in which Carson City did not strike any dollars. Other erroneous date/mint mark mashups include:
- 1878-O (for the New Orleans Mint)
While this type of information is easy to find, counterfeiters know that the average person doesn’t carry it around. In the excitement to buy an attractive coin at a good price, buyers can sometimes overlook signs of fakes that should be obvious.
Beware of ‘Too Good to Be True’ Deals
The adage “it’s too good to be true” is applicable when it comes to currency and coinage transactions. Except for truly rare collectors’ items, most coins are bought and sold as bullion, which is priced based on the value of the metal. Since the price of gold or silver is easily tracked in the public market, most dealers price bullion coins in a very tight range around this rate. If you find a dealer offering a price well below market, you should be suspicious.
Of course, not all good prices are scams. If you’re dealing with a fair seller, you should be allowed to measure and weigh your purchase and get a second opinion from a dealer you trust. As with any purchase, check the return policy before buying a suspect coin, and get that return or buyback policy in writing.
Be Wary of Online Sellers
The easiest way for a counterfeiter to sneak fake currency past a buyer is to post it online. You can’t hold and examine money or coinage while on a computer, meaning it’s next to impossible to detect before delivery. By that time, a counterfeiter could have deleted an account and disappeared.
In the coin world, a number of counterfeit sellers come from China. According to CoinWeek, up to 90 percent of fake coins offered on eBay, for example, are from China. If you’re looking at a coin listed by a seller in China at a surprisingly low price, that should be another red flag.
Certain online sellers might be legitimate. For example, the U.S. Mint publishes a list of gold dealers you can generally consider to be reliable. Although the U.S. Mint does not specifically endorse sellers, it does verify that they are represented by the Better Business Bureau. Even with this vetting, you should read consumer reviews to confirm you aren’t working with a counterfeiter.
Gold — and money — have long held an attraction for human beings. As long as there is a desire for these commodities, there will be scam artists looking to capitalize on it. Take note of these tips and don’t allow yourself to fall prey to the lure of counterfeit bills or fake money that looks real.
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About the Author
John Schmoll, MBA, is a former stockbroker, mutual fund administrator and veteran of the financial services industry. Today he manages multiple personal finance sites and writes for many online publications. His work has been featured in Forbes, Fortune, U.S. News & World Report, Yahoo!Finance, CNBC and more.