Two 1994 pound coins, one fake, one real.

[randomness]

Counterfeit British one pound coins have been a problem for a number of years.


From an article in Significance Magazine.
In all the years I visited the UK I'd never found a fake pound coin. I was either lucky or insufficiently attentive, possibly both. A couple of weeks ago I finally got a coin that I recognized as fake. I thought I'd take a few side-by-side photos of this particular counterfeit next to a pound coin of the same date I believe is real.

In the images below the counterfeit is on the left and genuine coin is on the right. Click on an image to enlarge it.


Obverse (front)
There is a slight color difference, but more or less within normal variation for pound coins.


Reverse (back)
I tried to preserve the rotation of each coin as I turned it over. The fake coin is slightly out of alignment, but not to an obvious extent.

Two photos of the edge:




The reeding (graining) on the edge is fainter and uneven on the fake. The inscription is also crudely lettered compared to the real coin. Worse yet, it is the wrong motto. On a real 1994 pound coin, the edge should read "NEMO ME IMPUNE LACESSIT". Instead, it reads "DECUS ET TUTAMEN", which has been used in other years, but not in 1994.

Both coins make a similar dull thud when dropped onto a table, as pound coins do.

I have not weighed the two pounds but there is no discernable difference in heft when held.

The BBC says many fakes work in vending machines.

mrreid.org provides a convenient link to a WolframAlpha calculation of the current metal value of a pound coin. Currently, that calculation estimates that the face value of the pound is about twenty times the metal value. That large difference is evidently enough to attract counterfeiters.

Comments

[cerebralpaladin.livejournal.com]

Really neat! (I mean, the underlying problem isn't, but...) How did you identify the difference? The motto clinches it, but you're a more fastidious man than I if you check the mottoes on the coins.

[r-ness.livejournal.com]

Well, I do confess to a level of OCD that seems reasonably common in coin collectors. :)

However, I didn't catch this until the transaction was over and was examining my change for interesting coins. Part of that examination includes the edge, which is when I spotted the coin.

The coin passed immediate post-transaction inspection though, as I failed to reject it when I got it. For a circulating counterfeit that's probably good enough for the counterfeiters' purposes.

[digitalemur.livejournal.com]

Where did you take the edge photos? I'm guessing that was the bathroom counter.

Nice background on the face images!

[achinhibitor.livejournal.com]

It's intriguing that it's actually worth the trouble to make fake one pound coins. Three percent of circulating coins being fake is pretty high. I wonder if the same is true of two euro coins?

[r-ness.livejournal.com]

Two euro coins are bi-metallic, which makes them more difficult to counterfeit, but there are still counterfeits. I've only found this accounting of coins removed from circulation so the numbers aren't comparable, but euro coin counterfeiting appears to be much less of a problem.

[cerebralpaladin.livejournal.com]

One of the articles you linked has an interesting speculation that British coin counterfeiting may have sharply increased following the introduction of the Euro, because some of the pre-Euro currencies were really easy to counterfeit (some were not) and that the Euro coins are harder to counterfeit. The theory is that counterfeiters may have responded to the change by moving over to counterfeiting Euros.

[r-ness.livejournal.com]

That makes sense. Also, switching over to the Euro gave authorities a chance for a complete redesign of circulating money. Withdrawing all existing coinage and banknotes isn't something countries generally do because of the disruption it causes.

One of the things banknote issuing authorities are now trying to get people used to is that note series will be periodically changed so that security upgrades can be incorporated. With coins, this is harder because coins last so much longer than banknotes, even ones made of polymer.

There's one other problem for the American authorities in this regard. United States policy is that all paper money issued since 1861 is still valid for redemption in current money. (Obviously promises to redeem for gold or silver have been broken.)

This means that it is theoretically possible to counterfeit old-pattern notes that lack security features. In practice notes of older designs attract enough attention that people give them more scrutiny.

There are good reasons to retain this policy, but it's still a security hole.

[achinhibitor.livejournal.com]

Yeah, the problem is that a lot of US currency is held and used outside of the US, which makes it hard to get the word out about design changes. http://economix.blogs.nytimes.com/2013/04/09/americas-most-profitable-export-is-cash/

[r-ness.livejournal.com]

While it's not the only problem, it is a big problem. Every time there's a change to US paper money the US Treasury spends millions of dollars advertising the change around the world to reassure people that the old bills will still be valid.

Trouble is, they can't keep the exchange houses in places like Russia from charging extra for new bills and refusing to take old ones. It doesn't much matter if you can redeem the old bills anytime you want in the United States if you can't get a visa to go there to do it.

[eyelessgame.livejournal.com]

That's actually an interesting argument for the US not to make or popularize a dollar coin, since, as near as I can tell, 3D printing is soon going to make (is in the process of making) counterfeiting a coin easier than counterfeiting a bill (with its embedded fibers and translucent strips).

[cerebralpaladin.livejournal.com]

Note that low-denomination bills do not several of the anti-counterfeiting measures, because they're not cost-effective when included in low-value bills, counterfeiting of low-value bills is rare, and low-value bills are commonly used as the base material to counterfeit high-value bills, so it's useful to not include some of the anti-counterfeiting measures in e.g. $1 bills to make it easier to identify fake $20 bills.

Personally, I'm inclined to view an increasingly cash-less society as the best solution to the problem of increasing ease of counterfeiting.

[r-ness.livejournal.com]

True enough. In fact, I touched on that in an earlier post.

[contrariety.livejournal.com]

This seems like another reason to go with paper money for moderate to large denominations.*

Although I do love the feel of pound coins; they are like the one coin that I feel strongly positive about.

(*I'm assuming that paper is harder to counterfeit - all those special tricksy things you can add to it that require special machines and materials - but maybe I'm wrong.)

[r-ness.livejournal.com]

Paper money is harder to counterfeit, mainly because a great deal of effort has been devoted to security features for documents. Polymer money is even harder to counterfeit. That, and the fact that it lasts longer in circulation have convinced a whole host of issuing authorities to switch to polymer.

That having been said, I've seen examples of counterfeit polymer notes on display. They look pretty convincing.

Coins can also have security features added to them. The new Canadian $1 and $2 coins are a good example.

One of the problems with anti-counterfeiting features on coins is that they need to last a long time through quite a lot of wear over decades and still work, long after a paper or even polymer note has been retired and destroyed. The other is that people pay even less attention to coinage than they do to banknotes.

[contrariety.livejournal.com]

Right, that's what I was thinking - with no security features, I bet paper is much easier to counterfeit. But you can throw all sorts of stuff in it, whereas a coin is (mostly) just a coin. Anything is counterfeitable with enough time and resources, but I imagine that just like cars, if you make it hard enough, the crooks will go spend their energy on someone else's?

The Canadian coins are nifty, though! (But I bet those features significantly raise the cost of creating them.)

Does anybody counterfeit quarters, do you know? Or is it below the "worth it" line?

[r-ness.livejournal.com]

Does anybody counterfeit quarters, do you know? Or is it below the "worth it" line?

I did actually know a guy in high school who showed me a bag of copper slugs the size of quarters. But those were blank. They wouldn't fool anything but a rather unsophisticated machine.

One characteristic of American dimes, quarters, half dollars, and dollar coins is that they are actually a sandwich of two layers of cupro-nickel surrounding a core of copper. It's a fairly simple measure that both makes the coin harder to counterfeit and lowers its metal value.

Vending machines check for the characteristics of this sandwich, which aren't the same as either component.

A problem with the pound coin is that it is a consistent metal alloy, which is easy to fake. The alloy is also cheap, which makes the profit margin high whether it's for the Mint or for a counterfeiter. No US coin nowadays except the nickel is now a single alloy through and through. Even the penny is copper-coated zinc.

[digitalemur.livejournal.com]

When I was little there were slugs from the round punch-outs in some heavy electrical panel boxes, that would fool soda machines. I think they were vaguely quarter-sized. I had a few; I think my dad heard about it from a friend who was a blast furnace control systems engineer.

[cerebralpaladin.livejournal.com]

Yeah, I knew of people who would use similar techniques to cheat video game machines (back when coin op video games were a big deal).

[r-ness.livejournal.com]

Anything is counterfeitable with enough time and resources, but I imagine that just like cars, if you make it hard enough, the crooks will go spend their energy on someone else's?

Right. "You don't need to run faster than the bear..."

[r-ness.livejournal.com]

I found this article from 1999 in the Hartford Courant about fake quarters turning up in Connecticut shoreline towns.

[frotz.livejournal.com]

Quarters are interesting in that much of their utility (for me at least!) comes via coin-operated devices. Just making one that will pass with a machine seems generally sufficient and much easier.

FWIW, two drachma coins are astonishingly close to quarters, close enough to fool most machines.

[r-ness.livejournal.com]

Yeah, there are actually a whole host of non-US coins that used to work in many machines. I'm told cigarette machines were particularly bad at rejecting them. The vending machine industry has gradually caught up, though. Hardly any of these coins will work in a modern machine.* Older parking meters would usually take any disk of the right diameter.

Back in the day there were coin dealers offering coins by the pound, the vast majority of which were quarter-sized and vaguely the same weight. One dealer in Connecticut told me his source was vending machine operators. If you went to his shop, you could pick through the bags and just buy the coins you wanted at the same price, which was a labor-intensive but fun thing to do on a weekend afternoon.

He also had a supply of transit tokens, sold by the pound. Most of these were no longer valid even back then but I did pick up quite a few I was able to use in transit systems, as well as many interesting tokens from long-defunct transit operators.

He retired long ago. I bought one last bag of coins from him by driving over to his house in the suburbs to pick it up in order to save the rather high postage charge, but that was it. Not long after that I stopped seeing his classified ads.

*Notable exceptions: the current coins of the Panamanian balboa up to 1/2 balboa, which are made to the "same weight, dimensions, and composition" as American coinage. Since the balboa can also be exchanged for dollars at par--they even use US dollars for their notes--this is essentially irrelevant for fraud purposes. I did get a Panamanian 1/4 balboa in change at one point, I think.

[stolen-tea.livejournal.com]

Nifty!

[r-ness.livejournal.com]

Glad you thought so!

[jendaviswilson.livejournal.com]

I find it hard to imagine 3d metal printing is going to be worth it for many years to come. The last best method I've used (couple years back) was a steel powder laser-sintered and then taken out and put in an oven where the gaps were filled by molten bronze. Then the final product needs to be finished and polished, all labor-intensive. The resolution limitations, machine cost, materials and labor are still crazy high. It will happen eventually, but a simple casting mold has got to be a lot less capital for a while yet.

I am also a terrible predictor of technology.

[r-ness.livejournal.com]

You're certainly right here:

The resolution limitations, machine cost, materials and labor are still crazy high.

But you're also right when you say this:

It will happen eventually

I mean no criticism of your predictive abilities when I say this, but I feel pretty sure that in the lifetime of circulating coinage, the 3D printing technology will catch up. But this is more a prediction in terms of the longevity of coins than anything else.

American coinage regularly lasts more than 50 years. It's certainly possible that before 3D printing catches up, metal coinage will be withdrawn from circulation or otherwise obsolete, but that implies changes in an American society which has historically been very resistant to changes in its coins.

So the problem is one that minting authorities have to plan for on a fairly long timeline.

but a simple casting mold has got to be a lot less capital for a while yet.

Many of the fakes appear to use techniques similar to those used for real coinage--possibly because castings don't look good enough to pass--which raises the counterfeiting cost, at least for initial outlay.

[r-ness.livejournal.com]

If we find anything amiss, I'll let you know.

Please do, thanks!