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When I deposit cash with a bank employee, they look at it and I have never heard of the amount later getting changed due to mistake or counterfeits.

If I deposit cash with an ATM which reads the bills one at a time, however, is the transaction more likely to later get changed? I'm hesitant to use my bank's recommended no-fee ATM, but there are no branches within 100 miles of me.

Maybe I'm paranoid, but I imagine getting an adjustment in one week saying that the deposit was actually $100 less due to discovery of one bill being a counterfeit. Does that ever happen? Are ATMs as good as "bank teller" humans at detecting counterfeits (maybe I should actually be more worried about an adjustment occurring for a branch transaction)? If the ATM accepts the bill, am I safe even if the bank then discovers that it is counterfeit (assume that I am not doing the counterfeiting and just somehow received one bad bill)?

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  • What are you asking "am I safe" from?
    – RonJohn
    Feb 27 '20 at 22:47
  • "Am I safe?" = "Is my deposit already guaranteed by the bank?"
    – bobuhito
    Feb 27 '20 at 22:50
  • what would you intend to do if you discovered a counterfeit bill yourself?
    – Michael
    Feb 28 '20 at 0:24
  • I inspect the bills when I get them, so I would refuse it.
    – bobuhito
    Feb 28 '20 at 0:28
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ATMs are good at somewhat identifying that the pieces of paper you put in are somewhat like the local currency. I don't believe that they have tech to 100% identify counterfeits (some of current counterfeits even fool experts).

In any case, the ATM doesn't make the final decision. When your deposit is processed (maybe the next day or maybe in a couple of days), it is a teller who will look at the money and identify any counterfeits.

The rules in the USA are that if you deposit counterfeits, it is your loss, not the banks. So it would be deducted from your account and you WILL have a conversation with law enforcement about you got that money.

Keep in mind that counterfeit money is exceeding rare (at least in the US). I was a banker for 10 years and I never heard of anyone who came across a counterfeit. And personally, I have no friends or acquaintances who have claimed to have gotten a counterfeit.

Also, if you went inside the bank and tried to deposit a counterfeit bill, you would have the same problem. The bill will be taken from you and you would get to have a chat with law enforcement. So there is no real disadvantage in using the ATM.

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  • OK, sounds reasonable. In case of a dishonest teller, it would be better for me to watch them in person (e.g., to prevent them from switching one of my bills with their own counterfeit one), so I feel like there's some advantage to my making a deposit at the bank...wouldn't you agree?
    – bobuhito
    Feb 28 '20 at 0:28
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    @bobuhito "I feel like there's some advantage to my making a deposit at the bank...wouldn't you agree?" No. You're being a bit paranoid.
    – RonJohn
    Feb 28 '20 at 13:48
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    e.g., to prevent them from switching one of my bills... that is just not going to happen. Think of it this way: If you wanted to steal a pen, would you work your way up through the Secret Service, then while on duty in the White House, break into the Oval Office and take one off the President's desk? Probably not. You'd just skip all that nonsense and swipe a pen from some random person. Similarly, a person who wants to pass counterfeit currency has many options that are vastly more likely to succeed than becoming a teller and swapping bills when a customer makes a deposit.
    – dwizum
    Feb 28 '20 at 14:11
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You asked,

If I deposit cash with an ATM which reads the bills one at a time, however, is the transaction more likely to later get changed?

Ultimately, for a variety of reasons, the answer to this is no. There is not a statistically significant difference in counterfeit detection between ATM deposits and over the counter deposits at branches. I'm saying this based on having access to a large set of benchmarking data from US-based financial institutions, including data on fraud detection.

In other words, if your concern is purely about getting caught when depositing counterfeit money, there is no difference between your chances of getting caught when depositing at a branch versus via an ATM.

In fact, to take that one step further, if your ultimate concern is "I don't want to get caught trying to deposit counterfeit currency" then your best focus is on making sure you never receive counterfeit currency in the first place. In other words, don't worry about your chances of getting caught when trying to deposit the bills - instead, focus on screening any currency that's handed to you when you receive bills.

And, on that note, to continue the reference to actual hard data, more counterfeit bills are caught at origin (i.e. the person first trying to insert them into circulation is caught) than from others handling the bills down the line (i.e. an innocent third party getting caught trying to deposit a counterfeit $20 that they didn't know was counterfeit). The notable exception is counterfeiters who target person to person transactions as a way to circulate the bills (i.e. they pay you $100 in fake twenties to purchase a TV you listed on Craigslist). The easiest way to protect yourself from that is to conduct all person to person transactions with unknown parties right at a bank, so you can immediately, in the presence of the buyer, deposit the cash. If a buyer won't agree to that, well then - you need to find a new buyer.

Counterfeit currency is a tiny fraction of fraud, so if your larger concern is getting caught in fraud, it's probably not the best place to focus.

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  • I'm not aware of any counterfeits, so "getting caught" is not my concern. It's more about my being present during counting and able to speak to a person (just in case a mistake is made by the teller or the ATM). I've already admitted in my question that this is mainly paranoia. But, believe most people have the same paranoia. For example, I'd like to do an experiment where a bank has a long 10-minute line and customers are told that the ATMs can accept cash immediately...how many cash depositors would still choose to wait in line?
    – bobuhito
    Feb 29 '20 at 10:36
  • @bobuhito a portion of my job is using data to predict Bank customer behaviors in exactly that kind of situation - my employer uses the outputs from my team to determine things like when to promote ATM usage to people waiting in line. If you're interested I'd be happy to go into depth some time in chat.
    – dwizum
    Mar 1 '20 at 0:21
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I have encountered multiple instances within the last year where an amount deposited with a human clerk, as well as with an ATM, was corrected afterwards, to the benefit of the customer.
This seems to show that there is a recounting going on, and that the bank does not 'silently keep the extra'. Of course, that would probably also happen in the other direction, but that's only fair.

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