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Central bank targets 'funny money'[/size]
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Counterfeiting problem has exploded in Canada since 2001[/size]
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Country one of world's worst for circulation of bogus bills[/size]
Nov. 20, 2006. 05:14 AM
DEAN BEEBY
CANADIAN PRESS
[size=12]OTTAWA—The Bank of Canada expects "dangerous levels" of currency counterfeiting to continue for up to three more years.
Since 2001, counterfeiting has exploded in Canada, breaking historical records and making the country one of the worst in the world for the circulation of funny money.
Internal documents obtained under the Access to Information Act show counterfeiting has for years exceeded a little-known benchmark used by the central bank to signal when the problem has reached "dangerous levels."
The current threshold is 120 phony bills for every million banknotes in circulation, or 120 parts per million (ppm).
The benchmark, originally set at 100 in 1988, was raised to 120 in recent years just as the proliferation of inexpensive, high-tech copying equipment made Canadian bills a ripe target for counterfeiters.
"All denominations except the $5 (bill) continued to be above our historical threshold of 120 counterfeits detected per million genuine notes in circulation," says an internal report from December 2005.
"This threshold is now considered high by Canadian standards and is well above the level of concern used in other countries."
In 2004, the worst counterfeiting year in Canadian history, there were 470 phony bills for every million genuine notes circulating.
The number declined to 326 in 2005 as the bank introduced new bills with security features that were tougher to fake and as it stepped up education programs among retailers.
This year so far, the central bank has wrestled the number down to 277, still more than twice the benchmark as the currency remained well in the danger zone. The drop in counterfeit bills is a trend many retailers are seeing in Toronto, as many have not seen or felt a bad bill recently.
Robert Lazar, assistant manager of the Shell gas station on Spadina Ave., said he hasn't seen a counterfeit bill in almost two years.
He's been at this location since 1999 and said the problem was "horrible" a few years ago, adding the station could lose several hundred dollars a year to bad bills.
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`This threshold is now considered high by Canadian standards ... above ... other countries'
Internal report, December 2005
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He attributes the decline of counterfeit bills to the newer security features on bills and greater awareness of those who work at the cash register since ultraviolet lights and charts are readily available to attendants.
Like other small business owners, Kevin Jang of Market Convenience on Eglinton Ave. W. said he could see and feel the difference in the texture of the paper in counterfeit bills. "When I close my eyes, I can tell which one is a fake bill," said Jang, who has owned the store for five years. "These days, I can't find them anymore."
Central banks around the world, fearful of undermining faith in their currencies, are typically coy about revealing actual counterfeit levels and precisely what thresholds they use to determine when counterfeiting problems are getting out of hand.
The information is rarely made public, making international comparisons almost impossible.
However, the Bank of Canada surveyed 15 central banks last year, including those in Australia, the United States and China, to provide it with a global perspective on its own funny-money problem.
The detailed findings were censored in a release under the access law, but the bank acknowledges Canada has one of the worst counterfeiting problems in the world.
"We are relatively high compared with other countries," said Monica Lamoureux, a spokeswoman for the bank based in Mississauga.
The central bank last week completed a major overhaul of Canada's currency with the introduction of a new $5 banknote, featuring security features designed to thwart counterfeiters.
The Bank of Canada is hoping the new banknotes, along with efforts to educate retailers and more aggressive prosecution of counterfeiters, will pare the number of phony notes to tolerable levels.
"We still use the PPM as a measure of performance, and we have set a goal of bringing counterfeit levels down to below 100 PPM by 2009," Lamoureux said in an interview.
The new, unpublicized target was set this summer as part of the central bank's medium-term plan.
With files from Tim Lai[/size]
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