ATM cash deposit verification

Question

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)?

Answer 1

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.

Answer 2

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.

Answer 3

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.