Counterfeit Bank of England banknotes
The Bank is responsible for providing banknotes that the public can use with confidence that they are genuine. As part of this objective, the Bank monitors the incidence of counterfeit Bank of England banknotes by recording the number of counterfeits removed from circulation. During calendar year 2008 the number of counterfeit Bank of England banknotes taken out of circulation was around 686,000. The vast majority of counterfeits are discovered by the banking system when they are separated from genuine banknotes during the sorting process. They are also taken out of circulation when the public or retailers hand them into the police or banks. Compared with the average number of genuine banknotes in circulation, of over 2.3 billion notes, the incidence of counterfeiting remains very low, as can be seen from the following table. It is important to note that the number of counterfeits in circulation at any particular time is much lower than the annual total for counterfeits discovered, because they are typically removed from circulation quickly, often after a single use.
Counterfeit and Genuine Bank of England Banknotes in 2008 (numbers of notes)
Denomination |
Counterfeit
banknotes taken out of circulation (rounded to nearest 1000) |
Genuine
banknotes in circulation (averaged for the year rounded to nearest 1mn) |
||
£5 |
3,000 |
254,000,000 |
||
£10 |
5,000 |
619,000,000 |
||
£20 |
675,000 |
1,314,000,000 |
||
£50 |
3,000 |
157,000,000 |
||
Total |
686,000 |
2,344,000,000 |
The face value of the counterfeits removed from circulation in 2008 was £13.7mn.
Data for 2008 includes all counterfeits of Bank of England banknotes discovered in 2008 and received by the Bank of England by 30 April 2009. The Bank of England sometimes receives counterfeit banknotes several months after they are found because, for example, the police may retain them as evidence. Consequently the final annual figures are subject to some further, upwards revision.
Chart 1
Click on image to enlarge
Data table for Chart 1:
Chart 2
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Data table for Chart 2:
The incidence of counterfeiting tends to be associated with three factors:
- the value of the note, in the sense that counterfeiters have more incentive to seek to counterfeit and pass higher value notes;
- the scale of issuance of a note denomination (and whether it is regarded as a transactional note, rather than a store of value), so that the £20 has the largest circulation in the UK while the £50 has a relatively small circulation and is likely to come under closer scrutiny by banknote users;
- the type of criminals engaged in counterfeiting activity. The UK has a higher incidence of serious organised crime involved in counterfeiting on a national basis which can lead to high volumes of a few types of counterfeit, compared to other countries, where counterfeiting is carried out on a more localised regional basis.
The Bank combats counterfeiting in four ways.
First, Bank of England banknotes are designed to be difficult and time consuming to copy by both traditional and computer-based printing methods. The security features that the notes carry, including raised print and feel of the paper, watermarks, holograms and fluorescent inks, provide a series of hurdles for the would-be counterfeiter. In addition, the designs are very intricate with varying patterns and fine lines. The Bank works closely with De La Rue, the printer of Bank of England banknotes, to ensure that the banknotes issued are of a uniformly high quality. The Bank continues to research and develop enhanced security features which may be suitable for future designs.
Second, the Bank provides a range of education and training materials about Bank of England banknotes to help cash users check that their banknotes are genuine. Information is available on the Bank’s website, in leaflets and posters, in a short film guide and on a computer-based training package aimed at professional cash handlers. It is in the interest of retailers and businesses to make sure that their staff are trained to check for genuine notes as criminals may target those places where checking is poor or does not take place. The Bank also conducts public perception surveys about the quality of banknotes in circulation and about the incidence of counterfeits.
Third, the Bank works closely with law enforcement agencies investigating counterfeit banknotes. It is clear that the larger operations to produce counterfeit Bank of England banknotes tend to be associated with organised crime and so are often related to other forms of serious crime such as the distribution of illegal drugs and firearms. Last year just three counterfeit types accounted for around 88% of all counterfeits discovered. Staff in the Bank provide forensic expertise on counterfeiting methods and expert witness statements for court cases. The Bank is grateful for the assistance provided by the police authorities, in particular West Midlands Police, Lancashire Constabulary, Durham Constabulary, South Yorkshire Police, Metropolitan Police, Cheshire Constabulary, Avon and Somerset Constabulary, Merseyside Police, City of London Police and the Serious Organised Crime Agency (SOCA) who last year made a number of arrests and seized equipment as part of several anti-counterfeiting operations. It is important that counterfeiters are stopped as soon as possible.
Fourth, the Bank works with the manufacturers of automatic banknote processing machines. We ensure that they have access to the latest library of counterfeits for testing purposes to ensure that their machines do not give value for a counterfeit note.
The final chart shows the total number of counterfeits taken out of circulation together with those found by the police before they had entered circulation , where this was in quantities of 1000 notes or more, termed ‘bulk seizures’.
Chart 3
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Data table for Chart 3:
Major Police Cases involving Bank of England Banknotes
This section gives some details of recent major cases in the last 3 years. The Forgery and Counterfeiting Act 1981 is the primary piece of legislation used to bring about successful convictions in the courts. The maximum sentence under this Act is ten years imprisonment. The Proceeds of Crime Act 2002 is also used by the prosecution authorities to carry out financial investigations on convicted individuals in order to confiscate assets which comprise the proceeds of crime. In addition, they can also apply to the court for a Serious Crime Prevention Order (SCPO) under the Serious Crime Act 2007. A SCPO could, for example, prohibit an individual from buying, owning or using equipment or materials that could be used to manufacture counterfeit currency. Breach of a SCPO is a criminal offence, punishable by a maximum sentence of five years imprisonment. An order of this nature was successfully used for the first time in 2008 in relation to a currency counterfeiter.
Table of recent Major Cases.
A further trial is expected later this year in connection with police action in the West Midlands area, following arrests made in September 2008 and March 2009.
In addition to the major cases listed above law enforcement agencies arrest individuals throughout the year who are caught in possession of counterfeit currency or who are responsible for the distribution and passing of counterfeit banknotes, irrespective of the quantities involved. During the calendar year 2008 the Bank provided Expert Witness statements for 708 separate incidents of this nature for court use compared with 303 in 2007.
Information regarding the production, distribution or passing of counterfeit notes should be reported to local police or anonymously to Crimestoppers on 0800 555 111. If your information leads to arrest and charge, you may be eligible for a cash reward. More information can be found at www.crimestoppers-uk.org
