Damaged or counterfeit money: What to do

samantha smith
By Samantha Smith

twenty pound notes

"THE money I've been given is seriously damaged and I suspect some of it is counterfeit. What are my rights?"

There's nothing worse than putting a pair of jeans in a heavy wash only to remember there's a £20 note in one of the pockets.

Except, maybe, going to pay for something and being informed that the note we've just handed over is worthless.

While there's hope for those who've mangled their cash, the news is far less bright for those who suspect they've come into possession of counterfeit notes.

Read on to see what can be done with damaged notes, or skip ahead to see what should be done with counterfeit money.

The dog ate it

Lots of us have used somewhat torn or dog eared notes to pay for a round of drinks or the weekend paper, and some of us will even have handled notes that have been sticky taped back together.

But getting out the sticky tape relies on having both parts of the note to hand - not always possible if they've been half eaten by the family pet, or mangled by the washing machine.

Once they've wrestled what's left of the notes back from the dog, owners of seriously damaged notes are reliant on the Bank of England's Mutilated Note service for reimbursement.

They deal with around 23,000 applications, totalling claims of £11 million, every year; most cases are dealt with in just a couple of days.

They request that all applicants download and complete an application form [pdf], which they should then send, with the remainder of the notes, to the Bank's offices in Leeds.

Applications in person aren't generally accepted. If posting the remnants isn't possible for some reason - they're too fragile or contaminated with something it's not permissible to send through the post - it's recommended that the applicant contact the Leeds office to find out how best to proceed.

Those filling in the form will need to provide the serial numbers of the notes that have been damaged, but also provide as much detail of what happened to the note, and where the rest of it is, as they can.

That's because the Bank don't want to pay out on the same note more than once. They say that "as a general rule, there should be physical evidence of at least half a banknote before payment can be made".

If this isn't the case, the explanation of what's happened to the larger part of the note could make all the difference between getting a refund or not; the Bank need to be convinced that the rest of the note isn't salvageable.

Anyone feeling sheepish that they have to explain how the majority of that once crisp £20 ended up inside their dog's stomach should take heart: the Bank also issues audit-based guidance for the "limited cases" in which there are little to no physical banknotes left to assess.

Counterfeit currency

In the first half of 2016 alone, 152,000 counterfeit notes with a face value of almost £3.3 million were removed from circulation. The vast majority - almost 85% - were fake £20s.

The Bank of England say that most fakes are removed from circulation after just one use, and that there are more than 3.5 billion genuine notes in circulation, worth more than £66 billion.

But if we're unlucky enough to end up with one of the dodgy notes, we've no right to get it replaced with genuine currency.

Retailers are within their rights to confiscate fake notes in order to pass them on to the police - although if a customer is given a note they suspect of being fake, they are equally entitled to refuse to accept it and instead be paid with a different note.

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So what if we've received a counterfeit note from a cash machine? Notes are supposed to be carefully checked before they're put into the machines, but anyone who suspects they've been issued with a dodgy note should report it immediately.

That means going into the bank or store where the cash machine is located and telling the staff. Having proof of the transaction will make getting a genuine note to replace the fraudulent one easier.

So if the note looks dodgy, don't put it away with the others. If the cash machine is inside a shop or bank, keep the dispensed notes in view and raise the issue straight away.

If that's not possible, there should be contact details for the owner of the ATM on the machine itself - so we should get in touch as soon as possible with as much detail about the transaction as we can.

If we can prove the fake note came from that machine, we should reasonably expect to be reimbursed.

But what if we don't spot the fake note until later?

All notes suspected of being counterfeit should be taken to the police. They'll issue the holder with a receipt before sending the suspect notes to the Bank of England for analysis.

If the notes turn out to be genuine, the holder will be fully reimbursed - but if not, tough.

And under the Forgeries and Counterfeit Act 1981, anyone who thinks they might have a forged note who tries to pass it on is committing an offence - so the onus really is on us not to accept anything suspicious in the first place.

Getting to know the money we handle is the safest bet. The Bank of England issue a leaflet [pdf] and an app for iOS and Android users, explaining what to look for.


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