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13 May 2003

Fact Sheet: U.S. Secret Service on Currency Protection

(New note designs to protect U.S. dollar's integrity, it says) (1080)

A new design for the $20 bill unveiled May 13 will make the note
harder to counterfeit and easier to check for authenticity, says the
U.S. Secret Service, the agency in the Treasury Department responsible
for the enforcement of laws relating to counterfeiting of obligations
and securities of the United States. Following is a May 13 fact sheet
on the new note and agency's efforts to fight counterfeiting of the
U.S. currency:

(begin fact sheet)

Fact Sheet

Counterfeit Deterrence


The Federal Reserve System and the Department of the Treasury are
committed to continuous improvement in currency design and aggressive
law enforcement to protect the integrity of U.S. currency against
counterfeiting.

-- Currency counterfeiting has consistently been kept low for more
than 100 years.

-- Despite counterfeiters' increasing use of technology, advanced
counterfeit deterrence on the part of the authorities has kept
counterfeiting at low levels. Current estimates put the level of
counterfeit notes in circulation worldwide at between 0.01 and 0.02
percent, or about 1-2 notes in every 10,000.

-- The most recent money designs, which were introduced beginning in
1996, included improved security features to make counterfeiting more
difficult and to make it easier for financial institutions,
professional cash-handlers and the general public to check their U.S.
currency.

Easy-to-use security features help people check their U.S. money:

1. Watermark: a faint image, similar to the portrait, which is part of
the paper itself and is visible from both sides when held up to the
light.

2. Security thread: also visible from both sides when held up to the
light, this vertical strip of plastic is embedded in the paper and
spells out the denomination in tiny print.

3. Color-shifting ink: the numeral in the lower-right corner on the
face of the note, indicating its denomination, changes color when the
note is tilted. (The color shift is more dramatic on the new $20
notes, making it even easier for people to check their money.)

-- Because these features are difficult for counterfeiters to
reproduce well, they often do not try; they hope that cash-handlers
and the public will not check their money.

-- Through aggressive law enforcement, authorities seize the vast
majority of known counterfeit U.S. dollars before they are passed into
circulation. In 2002, authorities worldwide seized three counterfeit
notes for every counterfeit note passed into circulation.

-- The U.S. Secret Service is working closely with banks and law
enforcement agencies worldwide to help suppress counterfeiting
activities.

1. About 60 percent of the counterfeit notes detected being passed in
the U.S. in fiscal year 2002 originated outside the U.S.

2. The $100 is the most commonly counterfeited note abroad, while the
$20 note is the most commonly counterfeited domestically.

3. In fiscal year 2002, the U.S. Secret Service and international
authorities seized $130 million in counterfeit notes before they ever
made it into circulation, thus preventing those counterfeit notes from
being passed to victims. Another $44.3 million in counterfeit U.S.
currency that had been passed into circulation was detected and
removed worldwide. In these cases, innocent victims who received the
bogus bills suffered a loss.

4. In 2002, the U.S. Secret Service made 4,900 arrests for currency
counterfeiting activities. The conviction rate for counterfeiting
prosecutions is about 99 percent.

-- Public education, law enforcement, the changes to the currency in
the late 1990s and increased public awareness have all kept
counterfeiting of U.S. currency at a low level.

Counterfeiters are turning increasingly to digital methods, as
advances in technology make digital counterfeiting easier and cheaper.

-- While serious note counterfeiting was once exclusively practiced by
organized criminal groups using traditional printing methods that
require a high degree of skill, today increasingly deceptive
counterfeit notes are produced using basic home computer systems.

1. In 1995, less than 1 percent of counterfeit notes detected in the
U.S. was digitally produced.

2. By 2002, that number had grown to nearly 40 percent.(1) In 2002,
the U.S. Secret Service made 555 seizures of digital equipment, such
as personal computers, involved in currency counterfeiting.

3. Currency counterfeiting by traditional offset-printing operations
is more prevalent abroad, while digital counterfeiting is more
prevalent in the U.S.

To stay ahead of counterfeiters, the U.S. will be introducing new
designs every 7-10 years.

-- Enhancing the design of our money has become an ongoing process. As
soon as the latest $20 note design was introduced in 1998, the U.S.
government began working on future designs. The new $20 note design
will be issued in late 2003, with the new $50 and $100 following, in
2004 and 2005. (Redesign of the $10 and $5 notes is still under
consideration, but a redesign of the $2 and $1 notes is not planned.)

The new $20 notes will be safer, smarter and more secure: safer
because they're harder to fake and easier to check; smarter to stay
ahead of tech-savvy counterfeiters; more secure to protect the
integrity of U.S. currency.

-- The new $20 design retains three important security features that
were introduced in the 1990s and are easy for consumers and merchants
alike to check: watermark, security thread and color-shifting ink.

-- While consumers should not use color to check the authenticity of
their money, the addition of color makes it more burdensome for
potential currency counterfeiters because it adds complexity to the
note and thus makes counterfeiting more difficult.

Security features are more effective if the public knows about them.
To build that awareness, the U.S. government is undertaking a broad
public education program. It will help ensure people all over the
world know new currency designs are coming, and help them understand
and utilize the security features. Outreach will be targeted to
cash-handlers; merchants from Main Street storefronts to multinational
retailers; associations representing affected audiences, such as
small-business groups; and the media.

-- People who know how to use the security features can avoid getting
stuck with worthless counterfeit bills.

-- While only about one or two in 10,000 notes is a counterfeit, if
you get stuck with that rare fake, you will lose your hard-earned
money. Counterfeit bills cannot be turned in for genuine ones, and
knowingly passing along a counterfeit is illegal.

(1) U.S. Secret Service

(end fact sheet)

(Distributed by the Bureau of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)