There is change coming to banks and financial institutions alike and some customers are not going to be pleased. Bank of America and many others have announced that, starting from this month onwards, they will be following the directive passed on by the government and will stop accepting damaged bills, especially those of lower currencies like the one-dollar bill.
The guideline will not just affect financial institutions, retailers will also be involved eventually in the efforts to remove these types of currency from the market. In fact, some of the larger retailers like Target or Walmart have already started implementing the measure to begin getting their customers adjusted to this new way of operating.
Bills that are considered damaged are those that show signs of wear, are torn, have cuts, look discolored, or are exposed to moisture. The list of specific damage that customers should be looking for when trying to use one of these bills is:
- Significant tears or rips.
- Missing corners or cut-outs.
- Permanent stains from ink, grease, or other substances.
- Partial burns.
- Bills worn to the point of not being easily recognizable.
If any of these cases apply, you will not be able to use the bill and will have to go to your financial institution in order to exchange it for a newer legal tender. And make sure to go during operation hours, as the ATM will also reject these bills, and they will have to be handled by a teller. In case where the bill is too damaged, the bank will not take it and you will have to go to specific branches or a federal government location that deals in damaged bills.
The reason for this new rule regarding damaged bills
The main reason for this change in accepting damaged legal tender is the growing concern about counterfeiting of coins and bills, which causes significant financial losses every year. The process will start with the one dollar bill as it is the most commonly used and thus the most prone to damage (even though its cotton and linen blend makes it more durable), but eventually the process will involve the rest of the bills that are in circulation. The aim is to not have any damaged bills in circulation.
Since counterfeiters target low value bills that are in circulation, the damaged bills are more likely to be fake than the newer ones that contain all the updated security measures. Through this process of elimination, new currency will be printed with the latest security updates adding to the difficulty to reproduce in a fraudulent manner.
How to exchange damaged bills in the bank
If you have a damaged bill in your possession, exchanging it is pretty simple for now. Banks or credit unions will usually handle this during business hours and will swap it for a new one, as long as more than half of the bill is still there and they can confirm it is real. Remember, ATMs will not be able to accept these bills so you will have to find a branch and approach a teller. If the damage is more severe, like if it has been burned, soaked, or torn apart, the Bureau of Engraving and Printing (BEP) will need to step in. They offer a free replacement service, but you will need to send them the bill along with a form that explains how it got damaged and what pieces you have left to ensure that no fraud is being committed in the replacement of the bill.
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For cases where the bill seems tampered with or damaged in a sketchy way, the Secret Service might get involved to investigate possible fraud, but this will be the more rare cases, as most bills get damaged because of normal wear and tear.
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