Computer and software manufacturers are to be forced to introduce new security measures to make it impossible for their products to be used to copy banknotes.
The move, to be drafted into European Union legislation by the year end, follows a surge in counterfeit currency produced using laser printers, home scanners and graphics software. Imaging software and printers have become so powerful and affordable that production of fake banknotes has become a booming cottage industry.
Though counterfeiters are usually unable to source the specialist paper on which genuine banknotes are printed, many are being mixed in with genuine notes in high volume batches. The copies are often good enough to fool vending machines. By using a fake £20 note to purchase a £2 rail fare, the criminal can take away £18 in genuine change.
Although the Bank of England refuses to issue figures for the number of counterfeit notes in circulation and insists they represent a negligible fraction of notes issued, it also admits fakes are on the increase.
Anti-counterfeiting software developed by the Central Bank Counterfeit Deterrence Group, an organisation of 27 leading world banks including the Bank of England, has been distributed free of charge to computer and software manufacturers since the beginning of the year. At present use of the software is voluntary though several companies have incorporated it into their products.
The latest version of Adobe Photoshop, a popular graphics package, generates an error message if the user attempts to scan banknotes of main currencies. A number of printer manufactures have also incorporated the software so that only an inch or so of a banknote will reproduce, to be followed by the web address of a site displaying regulations governing the reproduction of money.
The software relies on features built into leading currencies. Latest banknotes contain a pattern of five tiny circles. On the £20 note, they're disguised as a musical notation, on the euro they appear in a constellation of stars; on the new $20 note, the pattern is hidden in the zeros of a background pattern. Imaging software or devices detect the pattern and refuse to deal with the image.
Certain colour copiers now come loaded with software that detects when a banknote has been placed on the glass, and refuses to make a copy or produces a blank sheet.
Researchers at Hewlett Packard are to introduce technology that would allow printers to detect colours similar to those used in currency. The printer will automatically alter the colour so that the difference between the final product and a genuine banknote will be easily detectable by the naked eye.
Adobe acted after it emerged that several counterfeiting gangs had used Photoshop to manipulate and enhance images. The security feature, which is not mentioned in any product documentation, has outraged users who say it could interfere with genuine artistic projects. There were also concerns that the software would automatically report duplication attempts to the software company or police via the internet.
A spokesman for the National Criminal Intelligence Service said criminals traditionally used offset lithographic printing for counterfeiting. 'Developments in electrostatic photocopying equipment, together with advances in computer and reprographic technology, have led to a rise in the proportion of counterfeit notes produced in a domestic environment. The use of this technology generally results in a lower quality counterfeit, although this varies according to the skill of the counterfeiter and the equipment and techniques used.'
Although some countries, most notably America, allow reproduction of banknotes for artistic purposes if they are either significantly larger or smaller than the real thing, in the UK it is a criminal offence to reproduce 'on any substance whatsoever, and whether or not on the correct scale', any part of any Bank of England banknote.