Skip to content

Who Loses on Counterfeit Cash

Question: 
If a business brings in a cash deposit to our bank and we find counterfeit money in the deposit, they must take the loss, correct?
Answer: 

Answer by Andy Zavoina:
You have a legal requirement to take the bills. Only if you do so in error do you replace them.

31 CFR Section 100.18 Counterfeit notes to be marked; ‘‘redemption’’ of notes wrongfully so marked.

The Act of June 30, 1876 (19 Stat. 4; 31 U.S.C. 424), provides that all U.S. Officers charged with the receipt or disbursement of public moneys, and all officers of national banks, shall stamp or write in plain letters the word ‘‘counterfeit,’’ ‘‘altered,’’ or ‘‘worthless’’ upon all fraudulent notes issued in the form of, and intended to circulate as money, which shall be presented at their places of business; and if such officers shall wrongfully stamp any genuine note of the United States, or of the national bank, they shall, upon presentation, ‘‘redeem’’ such notes at the face amount thereof.

Section 100.19 Disposition of counterfeit notes and coins. All counterfeit notes and coin found in remittances are cancelled and delivered to the U.S. Secret Service of the Department of the Treasury or to the nearest local office of that Service, a receipt for the same being forwarded to the sender. Communications with respect thereto should be addressed to the Director, U.S. Secret Service, Departmentof the Treasury, Washington, DC 20223.

Answer: 

Answer by Dana Turner:
You do have the legal obligation to remove the counterfeit currency from circulation. If there's any way that you can positively trace the counterfeit to a customer -- either at the time of deposit or later -- I suggest that you debit the customer's account. Retail customers are notorious for hiding counterfeits in the middle of a stack of otherwise good bills so that you will take the loss. Why should you pay for their negligence?

First published on BankersOnline.com 6/7/04

First published on 06/07/2004

Filed under: 
Filed under security as: 

Banker Store View All

From training, policies, forms, and publications, to office products and occasional gifts, it’s available here:

Banker Store

hot right now

image description

Looking for effective, convenient training on a particular subject?

BOL Learning Connect offers more than 200 courses ON-DEMAND or on CD ROM from AML to Reg Z and every topic in between.

Search Topics