Bamboozled: Costly lesson about counterfeits

William Hagman needed to transfer money from one account to another.

He did it the old-fashioned way.

The retired history teacher from Morris Plains went to the TD Bank branch in Denville in February.

He withdraw $2,500 from his savings account, and he said the teller gave him the money in $50 and $100 dollar bills.

“Before leaving the bank I counted the money to guarantee that I had in fact received the correct amount of money,” said Hagman, 68.

His next stop was the Denville branch of Bank of America, where he planned to deposit the funds. He said he filled out the deposit slip and approached the teller.

“[The teller] took the cash and the deposit slip and proceeded to process the cash in an automated counter,” Hagman said. “She turned to me and notified me that one of the $100 bills was counterfeit. I was shocked.”

Hagman and the teller filled out a form for the Secret Service about the counterfeit bill, then he said he headed straight back to TD Bank. This was less than 30 minutes after the initial transaction at TD, he said.

He said he approached the original clerk and explained what happened, and he said the clerk remembered the transaction.

The two were joined by a supervisor.

“She acknowledged that TD Bank had accidentally passed a counterfeit $100 bill to me,” Hagman said. “Perhaps showing great naivety on my part, I asked her to authorize a replacement bill.”

Hagman said the supervisor was full of apologies, but she said bank policy wouldn’t permit it. When a customer leaves the branch with cash, the cash becomes property of the customer, Hagman said he was told.

A conversation about recognizing counterfeit bills followed. Hagman said he asked why he should be expected to spot a fake bill when a trained bank teller could or did not.

“I asked why a bank customer, me in this case, should have to serve as this bank’s ‘quality control officer,’” he said.

The supervisor again apologized, but the conversation ended.

Hagman said unlike other readers who contact Bamboozled, he’s not looking for restitution.

“Unless I am completely ignorant and naive, I feel like I have been duped, but I don’t want the money back,” he said. “I consider the $100 to be a donation to educating your readers.”

Great idea, we thought, so we asked around.

Counterfeit bills aren’t common, but they are out there.

The Secret Service said of the $700 billion of U.S. currency in circulation, a mere 1/100th of one percent is counterfeit. It said while banks are required to turn in counterfeit bills, banks can set their own policies when a customer discovers one.

PNC Bank’s policy is similar to TD’s.

“We have no way of knowing where the bill came from once the customer leaves the branch,” a PNC spokesman said.

Bank of America, too.

“When a customer leaves a banking center after receiving cash, there is no way for us to track those bills,” a spokesman said.

But a Chase spokesman said the bank takes these situations on a case-by-case basis.

“The bank takes to necessary steps to see if the customer received the bill in error and if they find that is the case, they’ll exchange the bill,” a spokesman said.

We asked TD Bank to confirm that Hagman was given the correct policy from the branch.

“We can’t comment on the incident due to privacy laws, or the specific policies and procedures we have in place to prevent counterfeiting,” spokeswoman Judy Rusk said.

Whatever policy a bank decides to institute, it’s the bank’s choice, said Doug Johnson, a spokesman for the American Bankers Association.

“A lot of times you’ll see if there’s a longstanding customer, the bank will take the counterfeit bill back and reimburse the customer,” he said.

You should ask your bank its policy on counterfeit bills so you’re not surprised if you find yourself in a position like Hagman’s.

If your bank takes these issues on a case-by-case basis, you’ll have a better shot of having a fake bill replaced if workers at your branch know you personally. But in these days of electronic transfers and ATM deposits, lots of people never enter a branch to talk to a real person.

You can avoid the issue entirely if you conduct electronic transactions, Johnson said. If you don’t bank online, another option is to get a bank check instead of cash.

Banks do have security protocols and equipment to detect counterfeit bills, but it’s possible for a bill to get through. Tellers are also trained to spot fakes, but they’re only human and mistakes happen.

Your untrained eyes might not spot them, either, but you can give yourself a crash course. Learn about the security features of real bills at the web site of the Secret Service (, which said it takes all cases of counterfeiting very seriously.

Arming yourself is a better option than relying on your bank.

“It’s a reasonable assumption to think a bank has scanned the money for potential counterfeits, but mistakes do happen,” Johnson said. “It’s an unfortunate circumstance.”

Unfortunate indeed, but is it fair for a customer to lose money because a bank missed a counterfeit bill? Banks can’t verify what has happened to a bill once it’s left the branch – a huckster certainly could swap the real thing for a fake in the parking lot, then return to ask for a real bill. And if a bank gives a customer a replacement bill, the bank has to eat the cost.

A smarter crook would try to try to pass a bad bill at a store, where perhaps the clerks aren’t trained in spotting counterfeit bills. But to try at a bank? Not as likely.

And sure, even a retired history teacher could try to hoodwink a bank with a counterfeit $100 bill, but we don’t think that’s what happened here.

“The thing I’m most disturbed about is that TD took in that bill and they let it go out, and I’m supposed to know it’s counterfeit,” Hagman said. “Bank of America ran it through the automatic counting machine and they picked it up immediately. Why didn’t TD Bank have that same technology?”