The amount of counterfeit cash in New Zealand is rising and the Reserve Bank says a declining familiarity with banknote security features is causing scammers to get away with using more fake notes.
Figures from the Reserve Bank’s latest annual report show the volume of counterfeit money in the country has risen by almost 300% in two years.
The Reserve Bank counts the number of counterfeits as ‘parts per million’ or PPM which is the number of counterfeits found per million of banknotes in circulation.
As of the end of March 2024, there was $8.6 billion in the hands of the public.
In the Reserve Bank’s 2024 annual report released last week, it said the number of counterfeit banknotes was approaching 14.34 PPM by the end of its June-2024 financial year.
That number had been higher earlier on in the June-2024 period, with the Reserve Bank seeing the number of counterfeits rising to a peak of 17.4 PPM – which is above the central bank’s tolerance threshold.
“While we did observe the number of counterfeits rise to a peak of 17.4 PPM, above tolerance threshold ranges, we responded through targeted and enhanced communications, stakeholder engagement and education,” the Reserve Bank wrote in its report.
“We have seen positive results with the number of counterfeit banknotes approaching 14.34 PPM as at 30 June 2024.”
The central bank said despite this, the number of counterfeits in the system at the end of June 2024 was still higher than the 9.22 PPM average observed during the June-2023 financial year.
That’s even higher than the 3.64 PPM average the Reserve Bank reported in 2022.
The Reserve Bank told interest.co.nz the $50 note accounts for around 80% of fake notes it sees.
It said the spike in counterfeit cash was due to fewer people using cash to pay for everyday things, with the reduction in cash transactions meaning people are less familiar with NZ banknotes.
“Ideally, we would not see any level of counterfeiting and while the fake notes the Reserve Bank sees are not sophisticated, scammers do take advantage of busy or under trained staff,” a spokesperson said.
“When these fake notes are accepted as payment, this results in an increase in the PPM of fake notes in circulation – despite these notes being easy to catch using the free tools and information available on our website.”
The Reserve Bank said counterfeiting in NZ is “relatively low” compared to other countries.
“We have a threshold for detected fake notes in circulation which was historically set at 10 PPM which is why we work with industry and retailers to ensure we support them to minimise the number of fake notes accepted into circulation,” the spokesperson said.
The Reserve Bank’s main concern around the increase in counterfeit cash is that some retailers aren’t training their staff to correctly check bank notes.
Retailers should be teaching their teams the ‘look-feel-tilt technique’ to check visible security features on banknotes, especially the shiny bird, the central bank said.
“Recent activity suggests that scammers are getting away with using more fake notes due to a declining familiarity with banknote security features,” the spokesperson said.
“The Reserve Bank continues to work with stakeholders in the retail and hospitality sector to increase awareness, education and training to help people feel confident in dealing with cash.”
10 Comments
The only people who are using cash these days are criminals, either drug money or work done under the table. There might be outliers like elderly and the like, but the legitimate uses of hard cash are dwindling. It would be far safer to remove large notes (at least) from circulation.
But that's because we have a somewhat dysfunctional non-cash payments system where, for instance, having EFTPOS capability costs hundreds per month and transaction fees eat meaningfully into revenues.
I find it hard to believe the vendors at farmers markets prefer cash, unless of course the whole setup is essentially tax evasion in action, which is a distinct possibility.
I use cash in various scenarios like buying second hand goods off other people. But that requires me to get cash out, give it to someone, who then puts it back in their account. If we had the frictionless phone-to-phone payment systems that some other countries have, those would supplant cash for all but the dodgy or paranoid.
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