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Are counterfeit pound coins actually an issue? The only real security measure they're known for is patterns / text around the rim which dates back to the days w

by corin_ 13y ago

Are counterfeit pound coins actually an issue? The only real security measure they're known for is patterns / text around the rim which dates back to the days when the metal was valuable enough for people to cut slivers off to melt down while keeping the coin roughly circular. I find it hard to believe that anyone with the inclination to break the law in such a big way, and the resources to do it, would chose pound coins as the thing to counterfeit. I could be completely wrong..? Edit: Of course I presume I must be wrong by the fact that this coin is being introduced, I guess my question is how wrong am I - how is making fake coins worth the effort?

shakethemonkey 13y ago
Perhaps a more pressing issue is the similarity of any particular coin's characteristics with the wide variety of foreign coins available (numismatic birthday attack)
- memsom 13y ago
  That used to be more of a problem. prior to the Royal mint resizing the 5, 10 and 50 pence coins, the 10 and 50 were exactly the same size as other international coins of a much lower face value. The Kenyan 1 and 2 Shilling comes to mind. A friend at University from Kenya used to use those coins to phone home in payphones. I don't know the specific exchange rate at the time, but they were worth pennies in Sterling from what I remember. The Irish coins, worth less than UK Sterling, also had similar sizes and some of the Australian and New Zealand too. Usually the coins were small face value, but even so, it was possible to pass them off.
  - objclxt 13y ago
    Now it works the other way round (the 10 pence is pretty much the same size as a US quarter). Not much of a saving (25¢ is around 15p), but I used to use them from time to time in college while I was doing my laundry.
dan1234 13y ago
It's thought that around 3% of the 1.5bn coins in circulation are fakes, with 2 million being removed each year. Source http://www.bbc.co.uk/news/uk-politics-26632863 http://www.bbc.co.uk/news/uk-politics-26632863
GunlogAlm 13y ago
Yes, it's a big issue here. From the Royal Mint: The Royal Mint regularly conducts surveys to estimate the level of counterfeit £1 coins in the UK. A survey undertaken in November 2013 found that the rate of counterfeit UK £1 coins in circulation at the time had risen from 2.74% to 3.04%. http://www.royalmint.com/discover/uk-coins/counterfeit-one-pound-coins http://www.royalmint.com/discover/uk-coins/counterfeit-one-p... And: The move comes amid concerns about the 30-year old coin's vulnerability to counterfeiting, with an estimated 45 million forgeries in circulation. http://www.bbc.co.uk/news/uk-politics-26632863 http://www.bbc.co.uk/news/uk-politics-26632863
- danieltillett 13y ago
  Are really 3% of all 1 pound coins counterfeit or is this just a case of Gresham's law http://en.wikipedia.org/wiki/Gresham's_law http://en.wikipedia.org/wiki/Gresham's_law
  - quasque 13y ago
    Gresham's law doesn't apply as it's ~3% of £1 coins in circulation, not of all.
  - bbosh 13y ago
    Yes, I did an experiment tracking which coins I had were fake. I found 10 out of 200.
- viraptor 13y ago
  Ok, so there's a claim I don't understand: ""One in 30 pound coins is counterfeit, and that costs businesses and the taxpayer millions each year," Mr Osborne continued." - but if they take ~2M of them out of circulation every year (which I assume means only a bit more are added), that means we effectively cancel (using £2.2 trillion M4 money supply in 2010) 0.00009% inflation. Since the current inflation is at ~2%, this should not even register. I mean, for others it doesn't matter who produces the new money to regulate inflation (apart from the problem of someone gaining <£2M from it, but if that's spread between many parties... who cares?). 35M 1£ coins were minted in 2013 anyway - I get an impression that the cost to businesses and the taxpayers would be lower if they just subtracted the predictions of fakes from the next year's minting. Happy to be proven wrong of course (I couldn't find an official estimate of number of coins lost every year, it would be interesting to look at that too) (sources: m3 supply data http://www.tradingeconomics.com/united-kingdom/money-supply-m3 http://www.tradingeconomics.com/united-kingdom/money-supply-..., inflation http://www.tradingeconomics.com/united-kingdom/inflation-cpi http://www.tradingeconomics.com/united-kingdom/inflation-cpi, minted quantities http://www.royalmint.com/discover/uk-coins/circulation-coin-mintage-figures/two-pounds-to-20p-issued http://www.royalmint.com/discover/uk-coins/circulation-coin-...)
Kliment 13y ago
The article linked in the article says 1 in each 30 pound coins are counterfeit.
rm445 13y ago
I have seen fake pound coins in the wild. My brother who does electronics work on fruit machines (low-stakes gambling terminals) has said he sees them all the time. I couldn't tell you whether defrauding such machines is the 'killer app' to drive coin counterfeiting on a large scale. The UK has millions of betting machines with small payouts (e.g. £50) but a smaller number with larger payouts, concentrated in betting shops, casinos etc.
adrianhoward 13y ago
Yes - they are an issue. Currently about 1 in 30 pound coins in circulation are counterfeit - so that's about £45 million in circulation (source http://www.theguardian.com/news/datablog/2014/mar/19/five-things-you-wanted-to-know-about-pound-coins-but-were-too-afraid-to-ask http://www.theguardian.com/news/datablog/2014/mar/19/five-th...). I suspect generating them is less effort that many people think. This guy http://www.dailymail.co.uk/news/article-502292/Counterfeiter-jailed-making-14-million-fake-1-coins.html http://www.dailymail.co.uk/news/article-502292/Counterfeiter... - was convicted of creating 14 million fake £1 coins and the technical side was basically a one man operation.
- glomph 13y ago
  That is still a pretty small amount given the other amounts of money being discussed in the budget.
lotsofmangos 13y ago
They exist, and generally they don't bounce the same if you drop them.
memsom 13y ago
I have a pot that I throw my change in to - there's £27 in £1 coins, and one is either fake or has turned a very dubious colour. Some fakes are amazingly real looking, some are so fake looking I find it amazing anyone actually believed it was real. I always seem to get them in small shops, pubs and take aways. Usually from independent traders who deal mostly with cash. I guess this is because the fraudsters can get away with passing them off more easily to those kinds of businesses?
- lifeisstillgood 13y ago
  To be quite honest I think we all ignore fake pound coins. Yes the obvious ones are obvious but they simply stay in circulation - you are going to use it soon and that person will pass it on too. I think one pound is below the "worth bothering about" level, which probably makes it an ideal counterfeit target
Theodores 13y ago
If you have the 'right' connections you can buy counterfeit pound coins, e.g. £60 - £80 buys you 100 of them. The price of the fakes varies, the ones that weigh the correct amount come at a premium as you can just put them in to vending machines and get useful stuff in return. The ones that don't work that way are obviously harder to spend, particularly if the colour is not quite as shiny as the proper ones. With those you really do run the risk of getting caught, particularly if you tried to pay for £50 of grocery shopping in pound coins that happened to be extra heavy, nearer black in colour than shiny gold and all from the same year... There is a whole other economy out there - think drugs - where fake coins are just another thing to sell/launder. People that buy drugs with a view to selling them in order to make the money needed to pay for their own habit are well placed to 'shift' fake coins and notes. They are not going to snitch either, this is because most people that buy drugs have just the one supplier, perhaps with someone else they can call on in emergency drought situations. To grass on their dealer is just not going to happen - they would lose their supply, possibly get nicked themselves and create lots of enemies in their scene. If fake coins get passed on through that same supply route then nobody is going to tell. The thing with the coins is that they only have to be passed off once from the 'black' economy to regular-commerce-land whereas the Royal Mint has to make coins that circulate for decades. For the counterfeiters it is easy to get the Queen's head stamped on there with some ridges around the edge, getting the weight and colour finish right has cost implications, hence this is not necessarily done to high-class forgery standards. I do wonder what the police would view as more serious - selling class 'A' drugs or laundering fake currency. I suspect the latter. Nonetheless, I hope that you now see how counterfeit coins have a route to market, why they don't actually have to be that good and how it is that so many exist without anyone being able to say where they come from.
rcxdude 13y ago
I've come across about 5 of them: I mainly discover them by vending machines rejecting them. They circulate around small businesses which deal mainly in cash very easily.

by corin_ 13y ago

shakethemonkey 13y ago

Perhaps a more pressing issue is the similarity of any particular coin's characteristics with the wide variety of foreign coins available (numismatic birthday attack)

memsom 13y ago
That used to be more of a problem. prior to the Royal mint resizing the 5, 10 and 50 pence coins, the 10 and 50 were exactly the same size as other international coins of a much lower face value. The Kenyan 1 and 2 Shilling comes to mind. A friend at University from Kenya used to use those coins to phone home in payphones. I don't know the specific exchange rate at the time, but they were worth pennies in Sterling from what I remember. The Irish coins, worth less than UK Sterling, also had similar sizes and some of the Australian and New Zealand too. Usually the coins were small face value, but even so, it was possible to pass them off.
- objclxt 13y ago
  Now it works the other way round (the 10 pence is pretty much the same size as a US quarter). Not much of a saving (25¢ is around 15p), but I used to use them from time to time in college while I was doing my laundry.

dan1234 13y ago

It's thought that around 3% of the 1.5bn coins in circulation are fakes, with 2 million being removed each year. Source http://www.bbc.co.uk/news/uk-politics-26632863 http://www.bbc.co.uk/news/uk-politics-26632863

GunlogAlm 13y ago

Yes, it's a big issue here. From the Royal Mint: The Royal Mint regularly conducts surveys to estimate the level of counterfeit £1 coins in the UK. A survey undertaken in November 2013 found that the rate of counterfeit UK £1 coins in circulation at the time had risen from 2.74% to 3.04%. http://www.royalmint.com/discover/uk-coins/counterfeit-one-pound-coins http://www.royalmint.com/discover/uk-coins/counterfeit-one-p... And: The move comes amid concerns about the 30-year old coin's vulnerability to counterfeiting, with an estimated 45 million forgeries in circulation. http://www.bbc.co.uk/news/uk-politics-26632863 http://www.bbc.co.uk/news/uk-politics-26632863

danieltillett 13y ago
Are really 3% of all 1 pound coins counterfeit or is this just a case of Gresham's law http://en.wikipedia.org/wiki/Gresham's_law http://en.wikipedia.org/wiki/Gresham's_law
- quasque 13y ago
  Gresham's law doesn't apply as it's ~3% of £1 coins in circulation, not of all.
- bbosh 13y ago
  Yes, I did an experiment tracking which coins I had were fake. I found 10 out of 200.
viraptor 13y ago
Ok, so there's a claim I don't understand: ""One in 30 pound coins is counterfeit, and that costs businesses and the taxpayer millions each year," Mr Osborne continued." - but if they take ~2M of them out of circulation every year (which I assume means only a bit more are added), that means we effectively cancel (using £2.2 trillion M4 money supply in 2010) 0.00009% inflation. Since the current inflation is at ~2%, this should not even register. I mean, for others it doesn't matter who produces the new money to regulate inflation (apart from the problem of someone gaining <£2M from it, but if that's spread between many parties... who cares?). 35M 1£ coins were minted in 2013 anyway - I get an impression that the cost to businesses and the taxpayers would be lower if they just subtracted the predictions of fakes from the next year's minting. Happy to be proven wrong of course (I couldn't find an official estimate of number of coins lost every year, it would be interesting to look at that too) (sources: m3 supply data http://www.tradingeconomics.com/united-kingdom/money-supply-m3 http://www.tradingeconomics.com/united-kingdom/money-supply-..., inflation http://www.tradingeconomics.com/united-kingdom/inflation-cpi http://www.tradingeconomics.com/united-kingdom/inflation-cpi, minted quantities http://www.royalmint.com/discover/uk-coins/circulation-coin-mintage-figures/two-pounds-to-20p-issued http://www.royalmint.com/discover/uk-coins/circulation-coin-...)

Kliment 13y ago

The article linked in the article says 1 in each 30 pound coins are counterfeit.

rm445 13y ago

I have seen fake pound coins in the wild. My brother who does electronics work on fruit machines (low-stakes gambling terminals) has said he sees them all the time. I couldn't tell you whether defrauding such machines is the 'killer app' to drive coin counterfeiting on a large scale. The UK has millions of betting machines with small payouts (e.g. £50) but a smaller number with larger payouts, concentrated in betting shops, casinos etc.

adrianhoward 13y ago

Yes - they are an issue. Currently about 1 in 30 pound coins in circulation are counterfeit - so that's about £45 million in circulation (source http://www.theguardian.com/news/datablog/2014/mar/19/five-things-you-wanted-to-know-about-pound-coins-but-were-too-afraid-to-ask http://www.theguardian.com/news/datablog/2014/mar/19/five-th...). I suspect generating them is less effort that many people think. This guy http://www.dailymail.co.uk/news/article-502292/Counterfeiter-jailed-making-14-million-fake-1-coins.html http://www.dailymail.co.uk/news/article-502292/Counterfeiter... - was convicted of creating 14 million fake £1 coins and the technical side was basically a one man operation.

glomph 13y ago
That is still a pretty small amount given the other amounts of money being discussed in the budget.

lotsofmangos 13y ago

They exist, and generally they don't bounce the same if you drop them.

memsom 13y ago

I have a pot that I throw my change in to - there's £27 in £1 coins, and one is either fake or has turned a very dubious colour. Some fakes are amazingly real looking, some are so fake looking I find it amazing anyone actually believed it was real. I always seem to get them in small shops, pubs and take aways. Usually from independent traders who deal mostly with cash. I guess this is because the fraudsters can get away with passing them off more easily to those kinds of businesses?

lifeisstillgood 13y ago
To be quite honest I think we all ignore fake pound coins. Yes the obvious ones are obvious but they simply stay in circulation - you are going to use it soon and that person will pass it on too. I think one pound is below the "worth bothering about" level, which probably makes it an ideal counterfeit target

Theodores 13y ago

If you have the 'right' connections you can buy counterfeit pound coins, e.g. £60 - £80 buys you 100 of them. The price of the fakes varies, the ones that weigh the correct amount come at a premium as you can just put them in to vending machines and get useful stuff in return. The ones that don't work that way are obviously harder to spend, particularly if the colour is not quite as shiny as the proper ones. With those you really do run the risk of getting caught, particularly if you tried to pay for £50 of grocery shopping in pound coins that happened to be extra heavy, nearer black in colour than shiny gold and all from the same year... There is a whole other economy out there - think drugs - where fake coins are just another thing to sell/launder. People that buy drugs with a view to selling them in order to make the money needed to pay for their own habit are well placed to 'shift' fake coins and notes. They are not going to snitch either, this is because most people that buy drugs have just the one supplier, perhaps with someone else they can call on in emergency drought situations. To grass on their dealer is just not going to happen - they would lose their supply, possibly get nicked themselves and create lots of enemies in their scene. If fake coins get passed on through that same supply route then nobody is going to tell. The thing with the coins is that they only have to be passed off once from the 'black' economy to regular-commerce-land whereas the Royal Mint has to make coins that circulate for decades. For the counterfeiters it is easy to get the Queen's head stamped on there with some ridges around the edge, getting the weight and colour finish right has cost implications, hence this is not necessarily done to high-class forgery standards. I do wonder what the police would view as more serious - selling class 'A' drugs or laundering fake currency. I suspect the latter. Nonetheless, I hope that you now see how counterfeit coins have a route to market, why they don't actually have to be that good and how it is that so many exist without anyone being able to say where they come from.

rcxdude 13y ago

I've come across about 5 of them: I mainly discover them by vending machines rejecting them. They circulate around small businesses which deal mainly in cash very easily.