What happens when the bank retains a counterfeit note from your deposit

What the bank does with a suspect note

Your bank cannot hand the note back to you: anyone handling cash professionally must take suspect notes out of circulation and pass them on, and the final decision on authenticity rests with the Bank of England, not with the cashier or the branch. What you get in return is a receipt — the document proving you handed over that note and for what value.

From the counter the note travels on to be examined: suspect notes go to the National Crime Agency and, where they are counterfeit, on to the Bank of England for further examination. If you find a suspect note yourself rather than at a deposit, the route is a police station first: the police complete an NCO-1 form and give you a receipt with an incident number, and if they tell you the note is not needed for a criminal investigation you can then take it to your bank as a suspect counterfeit.

Do you get the money back?

Only if the note proves genuine — then you are reimbursed its full face value. If it is confirmed counterfeit there is no reimbursement of any kind: the Bank of England cannot reimburse counterfeit notes, because a counterfeit has no value and nobody stands behind it. No claim against the bank changes that.

For a business the loss is double, and it is worth being clear about this before arguing at the branch: you lose the face value of the note and the goods or service already handed over. The bank is not liable for that loss — it is simply doing what the law requires by withdrawing the note — so pressing the branch leads nowhere.

Does paying one in get you into trouble?

Paying in a counterfeit note you believed to be genuine is not an offence, and the retention at the branch does not start any case against you. What the Forgery and Counterfeiting Act 1981 makes an offence is passing on a note you know or believe to be counterfeit: the dividing line is knowledge, and taking the note to a bank is the opposite of concealing it.

Do co-operate with the details you are asked for — when and where the note reached you — because that is the information police and the Bank of England use to trace where counterfeits enter circulation. What you must never do is ask for the note back to pass it on: from the moment you doubt it, handing it in is the only lawful option.

What to keep, and how to claim

The retention receipt is the centrepiece of the whole process: without it you cannot evidence either the handover or the amount. Check it before you leave the branch, and keep alongside it everything that pins down where the note came from:

• The receipt from the bank or the police, with the note's serial number and denomination.
• Your paying-in slip, so it is clear which deposit the retained note came from.
• The incident number, if a police station took the note in first.
• If you are a business, the till receipt or invoice for the sale that brought the note in, and the time of the transaction.
• CCTV footage of that moment, if you have it and it has not yet been overwritten.

Going back to whoever gave you the note

If you know where the note came from, you can ask that person for the money with the receipt in hand: someone who hands over a counterfeit note, even in good faith, has not paid what was owed. In practice this works with a supplier, a tenant or a named regular customer; with someone who paid at the till and walked out, there is nobody to pursue.

Where the deception looks deliberate — several notes from the same series, a small purchase to get change, a payment that repeats — report it to the police with the receipt and the transaction details. If the sum is large and the person is identifiable but refuses to pay, recovering the money is a civil matter and worth taking to a solicitor.

How to stop it happening again

The only way never to go through this process is to check the note at the moment of payment rather than at the bank: an automatic detector checks each note in under a second and rejects it before it reaches the till, while the customer is still in front of you and can pay another way. At the counter a counterfeit is ten seconds of mild awkwardness; in tomorrow's deposit it is a settled loss.

Look for a machine tested by the European Central Bank, which publishes test results against genuine counterfeits, and for one that decides automatically: the call should not depend on an employee reading a mark or a shade of light. Detectalia has manufactured and serviced its own detectors since 2003, with a 4-year warranty when you buy at detectalia.com.