Most people can instinctively spot a counterfeit bank note in a fraction of a second, according to a new study.

The Bank of England says that while less than 0.0023 per cent of banknotes are fakes, forgery is still a major issue. More than 58,000 such notes were removed from circulation in early 2021, for example, with a face value of £1.5million.

Use of physical cash is on the decline, hastened by the pandemic, but there are still more than four billion genuine notes in circulation.

Identifying them is a priority for both vendors, banks and customers and there are various telltale indicators: discolouration, a lack of security features, misshapen faces etc.

Prof Jane Raymond, Emeritus Professor in the School of Psychology at the University of Birmingham, led a study to investigate what happens in a person’s brain when scrutinising counterfeit notes.

She found that in the majority of people’s minds there is instant acknowledgement that something is amiss when given fake currency, and this occurs in a fraction of a second.

Staring at it for longer has no impact on detection, and Prof Raymond said many people ignore their gut and convince themselves they are real, despite well-founded suspicions.

“There’s not a whole lot of difference between looking at [a fake bank note] for two seconds and looking at it for half a second,” she told The Telegraph.

“What happens is that people get a signal in their brain that picks up that this is different from all the other banknotes that the brain has ever seen and it sort of causes a hiccup.

“When you see a banknote that’s supposed to look genuine and something’s a little off, your brain kind of goes ‘huh?’

“You would see [the brain hiccup] in everybody, I think it’s the way the brain works.”

Twenty-three people were shown real notes and then short video clips (a third of a second) of either genuine banknotes or forgeries, half were £20 notes, and half £50.

The Bank of England, which part funded the study, provided the researchers with counterfeit notes which had been recovered from general circulation, so were convincing replicas that had slipped through various stages of quality control and had signs of significant use.

“Counterfeit exemplars varied modestly from each other. Differences between counterfeit and genuine included general image resolution, contrast, and hue, as well as specific differences in the appearance of security features,” the researchers write in their study, published in Scientific Reports.

“Primary obvious security features were a foil hologram stripe (£20) and green micro-optic security stripe (£50).”

Brain hiccup

Scalp electrodes were used to analyse the brainwaves of study participants while they inspected cash and this gave the research team a live view of brain activity.

The instinctive “hiccup” was followed by more complex thought processes as a person began to dissect the note’s appearance.

However, while people had a gut instinct that something was wrong, their brain then initiated various other thinking processes, and often tricked itself into overriding its own concerns.

“We show that the brain is able to pick up that difference immediately, but it doesn’t always act,” Prof Raymond said.

“Early on, the brain picks up the signal, and then after about a half a second, all these other processes kick in and sometimes people will say no, that’s not really a counterfeit, even though it was.

“In a way we’re all experts at handling cash, or at least maybe prior to the pandemic we were.

“We all kind of know what cash is supposed to look like. It’s just that we don’t always listen to those gut instincts.”

Sarah John, Chief Cashier of the Bank of England, told The Telegraph: “While counterfeit notes are very rare, it’s important people know how to check for a genuine note.

“All of our polymer banknotes can be checked by looking for two key security features: a hologram which changes image; and see-through windows.”

Several central banks, including the Bank of England, are working to understand how people recognise fake notes, and this will help inform the design of the next generation of currency.