Can ATMs Detect Fake Money?

If you are wondering can ATMs detect fake money? well, there is no end to ATM scams that happen all over the world. One such fraud is depositing counterfeit money into an ATM. 

Although, most of the time, the ATM can detect fake money using its electronic eyes and spill it out at once, sometimes it might fail. ATMs have a particular scanning method to detect money, which might also detect fake money. 

So, let us now look at how exactly an ATM detects money.

Can ATMs detect fake money? Know All about it 

An ATM detects money using its “electronic eyes” that analyze the cash to ensure it is printed with magnetic ink. Moreover, an ATM can scan money bills to check if they match the authentic bills’ specifications. The following are the security features that an ATM looks for in a banknote:

Can ATMs detect fake money

Security Thread

All money bills are fitted with a unique security thread for each denomination which can easily be detected when placed under blue light.

3D Security Ribbon

A blue 3D security ribbon is also woven into some banknotes, which can be used to identify authenticity.


Every banknote comes with a unique image visible from either side when the money is held under light.

Paper Quality

Authentic money bills are made from paper which is a blend of cotton and linen.

Color Fibres

Genuine banknotes are embedded with red and blue fibers with a specific texture easily detected.


Authentic bills have a distinctive texture that is easy to determine with a closer examination.


Genuine banknotes use high-quality printing with higher readability, extreme details, and sharp lines without any irregularities or the lines wavering in color, clarity, or thickness.

Read: Can Counterfeit Money Be Traced? Know-How

What happens when you deposit fake money into an ATM?  

Counterfeiting money is illegal, and depositing fake money into ATMs is an even bigger crime. You will be charged for passing counterfeit notes and may even go to jail once the authorities discover the fake bills and trace them back to you. 

However, if it happens by mistake, as if you didn’t genuinely know that the money you are depositing is counterfeit, you might be spared the humiliation of being arrested.

However, once the bank detects that the deposited money is fake, you will lose the value of the money.

But you are a fraud if you know that the money bills are counterfeit, yet you try depositing the fake money into an ATM.

And once you are tagged as a fraud trying to pass counterfeit money as real, you will have to face the consequence. You might end up in jail for as long as 15 to 20 years if they find that you are actually in charge of manufacturing counterfeit notes. 

Else, if you are just someone who is knowingly depositing fake money into an ATM, then you might be let off with a fine, but that wouldn’t be less than $5000. 

Depositing fake money into an ATM is a crime that should never be committed if you don’t want to land yourself in trouble with the higher authorities of the bank as well as the police departments.

Once caught, you will never be able to escape the consequences.

What should I do if I receive fake money from an ATM? 

There is no way to escape the penalty if you try to spend your counterfeit money pretending it to be a genuine one.

So, the best thing to do when you receive fake money from an ATM is to report it to the local Police Station or the Secret Service.

Else, you can simply go to the bank and report it to the Treasury Department, and they will take care of the rest from there.

So, if you doubt that you might have received a counterfeit note from an ATM, try to obtain a transaction receipt. If you can’t access the receipt, then try to remember the date and time of the transaction. 

It will allow you to have the evidence to prove your innocence later. Most importantly, if you happen to realize that you have received a fake note while you are still inside the ATM, then hold up the note at the CCTV camera and report it for stronger evidence in your favor. 

And while you are waiting to report the case of the counterfeit money to a higher authority, store it away in a box, separate from genuine cash.

You might as well write your initials and the date and time of the transaction on the white margin of the bill. 

But whatever you do, you should not try to transfer your loss to another by trying to pass your fake money as real.

If the bank refuses to replace the counterfeit bill, you will have to accept it as your loss, hand it over to the higher authorities, and just forget about it.

But you most definitely shouldn’t risk breaking any counterfeit laws. Once caught, you will have to face serious consequences.

Read: Best Money Detector Machines: Reviews and Buying Guide

Can a cash deposit machine detect fake notes? 

Cash deposit machines most definitely can detect fake notes. They have sensors to scan and analyze the money bills that get deposited. It analyses the messages based on texture, watermark, print, paper, color fibers, and most importantly, the security thread and ribbon. 

The machine will immediately spill it out if it finds that the bill doesn’t match the security features of an authentic banknote.

If a cash deposit machine detects too many fake notes deposited by a single person, it holds those back in a separate chamber. It then issues an intimation slip to the depositor.

The bank officials will easily identify the depositor of the fake notes via the information stored in the Cash Deposit Machine. 

Once the bank detects the fake money deposited in the CDM and identifies the depositor, they are liable to confiscate and charge the amount to the customer’s account while also contacting the Police and the Secret Service departments. 

The higher authorities would take upon the case from there. Hence, there is no way that a Fraud can escape after depositing fake money into a CDM.

Will a bank replace a counterfeit bill if it is received from an ATM? 

A bank can decide to replace a counterfeit note at their discretion, but the probability of that happening is very low. Once you have withdrawn your money from an ATM, the Bank is unlikely to take responsibility for the ATM bill issued.

A bank has no way to determine whether the note came from their ATM, especially if you don’t have evidence of the CCTV camera.

So, the ultimate decision of the bank on whether it will swap your bill is handled on a case-by-case basis. It usually depends on the relationship of the customer with the bank. It is likely to consider a regular customer who has a variety of services and products with the bank. 

Otherwise, the bank won’t compensate you for any fake notes that you might have received from an ATM. You would just have to report the bill and accept that as your loss through no fault of yours.


So, if we summarize the answer of “Can ATMs detect fake money”, It would be that technological advancements give ATMs the advantage of detecting fake money. Hence, there is no way that fraud would deposit fake cash and escape the prying eyes of higher authorities. 

So, never deposit counterfeit notes into the ATM. And if you are on the receiving end, ensure that you report it to the authorities to avoid facing the consequences.

Avatar for Jaren Helms

Jaren worked for over a decade in the industry as a Package Handler. He started his career with FedEx but he later also worked with companies like USPS and Deutsche Post.

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