The Recent Surge in Counterfeit Bills - Essay Example

? The Recent Surge in Counterfeit Bills Table of Contents Executive Summary Adverse effects of counterfeiting are undisputable. Many economies continue to suffer from such criminal offences. Counterfeiting continues to affect the economy, government, and ultimately the consumer. Economies continue to deteriorate whilst governments have for a long time experienced increased pressures thereby diverting resources and priorities in order to combat the problem. On the other hand, consumers continue to receive poor quality products in addition to loss of confidence on the same. Motivated by these facts, there have been concerns to come up with adequate and effective measures that help in combating counterfeiting activities in a bid to protect the economy, government, and consumers. Some of the ways identified in the following report that employed majorly the aspect of reassessing previous studies include use of international policing agencies, anti-counterfeiting associations, and applications of technology. Examples of technological applications used in fighting counterfeiting as identified in the following report include use of smart cards, biotechnology, chemical technologically developed inks, and use of optical technologies such as holograms. From the research, it is obvious that such actions and strategies have been fruitful in reducing the level of counterfeiting within American and other nations that have been adversely affected by the same criminal offences. In order to create an understanding of the aforementioned, the report has been divided into introduction, background information, purpose, scope, and methodology of the report. These sections have been very useful in providing a general overview of the topic as well as the method and scope use in carrying out the research. On the other hand, the problem and solution sections form the core basis of the study identifying impacts of counterfeiting and their possible solutions. The last section of the report includes conclusion and recommendations. Introduction Counterfeiting continues to be a serious menace within various sectors of the economy. It is a criminal offence to engage in counterfeiting products and money. United States of America continues to experience worsening of the economy due to increase counterfeits in either products or money (Haie-Fayle & Wolfgang, 2007). No one can deny that the problem of counterfeiting is an extraordinarily well defined one. Other than causing serious negative impacts on the economy of a nation, counterfeits reduce consumer confidence in respect to the products and money that they handle (August & Hwang, 2009). According to the studies conducted by Alcock, Chen, Hui, and Hodson (2003), rise in counterfeits provides Americans with adequate reasons to come up with effective measures of dealing with the problem. One such measure is the introduction of the Prioritizing Resources and Organization for Intellectual Property Act (PRO IP Act), anti-counterfeiting agencies, and employment of technologies that help in combating the same (Haie-Fayle & Wolfgang, 2007; August & Hwang, 2009). In addition, there are other technological measures and practices capable of assisting America and other global nations in combating the counterfeit crimes. Motivated by these facts, the following formal report outlines the ways through which existing/inexpensive technologies and practices can be employed in an effort to reduce the loss in consumer confidence that counterfeiting oftentimes induces. Even though the presented formal report will not have the effect of slowing or stopping counterfeiting, if implemented, it will have the effect of weakening the previously mentioned negative effects that counterfeiting wreaks on local businesses, individuals, and consumer confidence. In a bid to attain this objective, the following report provides background, purposes, scope, methodology, problem, solution, conclusions, and recommendations based on previous or secondary sources. Background Rise in counterfeiting continues to negatively impact on both state and local law enforcements. State and local law enforcements continue to have serious challenges in developing effective rules and regulations especially with respect to counterfeit bills. For instance, in December 2007, Rep John Conyers Jr, Rep Lamar S. Smith, and Rep Howard L. Berman introduced one of the counterfeiting bills in a bid to help in fighting the increased counterfeiting crimes (Haie-Fayle & Wolfgang, 2007). The practice of counterfeiting causes a great deal of harm to both the financial system as well as the trust upon which aforementioned system is built. Likewise, if the practice is left unchecked it can and will grow into a situation that can threaten the abilities of local firms and banks to make a profit due to the decreased trust with which they view the money that comes to their hands on a daily basis. On this basis, it is therefore necessary to have adequate measures other than the bills that will help in combating counterfeiting crimes within America and the global arena. Purpose, Scope, and Methodology Purpose of the Report It is undisputable that America and the global perspective continue to suffer from the hands of counterfeit perpetrators. Counterfeiting is a crime that causes serious harm to financial systems and dilution of trust or confidence on the consumers. Even though many reports have been developed in a bid to finding a lasting solution, there has been need for more studies. Therefore, the following report outlines the ways in which banks as well as other firms can institute a series of practices and procedures which can help ebb the tide of counterfeiting as it is currently being experienced in and around the area of Penn State University. The study will have the compound effect of being able to provide local business and banking with appropriate measures which can be implemented to protect against such fraud/counterfeiting, as well as providing a list of specific criterion which should be followed in order to minimize the occurrence an effects of such actions. Scope of the Report This report focuses beyond definitions of counterfeiting. The main aspect of this report will be to offer a reassessment and review of the multitude ways through which banks, firms, and individuals can work to increase their awareness of the issue as well as minimize the effects of false currency being passed off as legitimate currency within the market. Therefore, by reassessing the problem from the perspective of existing and unemployed technologies effective and low-cost solutions can easily be implemented to assist business owners from sustaining the economic hardship that counterfeiting often implies. However, before delving into the ways in which counterfeiting can be detected and stopped at the store/business level, it will be necessary to at least nominally discuss and define the issue at hand with respect to how it relates to the economy as a whole, not merely the areas in and around Penn State University. Methodology of the Report Attaining the above objective in respect to counterfeit problems will require a defined structure of methodology. Other than reassessment and reviews of existing strategies to combat the counterfeiting crimes, the report will analyze past and present anti-counterfeiting implements that have in many cases been “forgotten”, left untaught to new-hires, or no longer practiced in a meaningful way. Such aspects will provide an overview of dealing with the same. These include bill testing ink that can quickly show a determinate color if the bill is suspected of being counterfeit, employee judgment based on the texture and feel of the bill, suspicion based on the manner/behavior in which the customer might exhibit, or the fact that the customer might attempt to purchase a relatively small item with large bill(s). Furthermore, an exhaustive look into these methods will be analyzed by using information available through the US Secret Service as a way to determine which of these techniques experiences the highest rate of success as compared to the overall cost of implementation. In this way, the research will attempt to place a cost benefit analysis on the differing methods which can be employed to detect counterfeit bills as well as gain valuable background information with relation to the most successful methods of detection and the prevalence with which counterfeiting currently experiences as it relates to Pennsylvania and the rest of the United States. The final step of this research will be concentric around gaining information regarding the anti-counterfeiting measures that individual business owners have taken. This will be accomplished through interviewing Parx Casino president CEO Robert W. Green as well as other local store owners that include amongst others Staples office supplies and Conoco Phillips gas station. Though these last two retail outlets have not yet been hit by the recent increase in counterfeit bills, interviewing their managers will help to shed a light on how other currently non-effected stores in the region are treating the threat and what means they are employing to protect themselves against counterfeiting. Problem Introduction During the past month and a half there has been a rapid uptick in the number of fake bills being passed in and around Penn State University. This has been occurring at a variety of locations that do not seem to be related other than the fact that they are all places of business that handle cash on a daily basis (Haie-Fayle & Wolfgang, 2007). As such, the issue bears a tangential relation to business and economics due to the fact that retail establishments and individuals are required by law to remit counterfeit money to the requisite authorities without any reimbursement for the face value of the counterfeit bill they obtained as a result of legitimate service, good or other business activity. In this way, the economic loss forms a type of double loss that must be absorbed by the business entity in question. Likewise, although the economic impact of recent rise in counterfeit bills will not have the effect of crippling the local economy, the fact of the matter is that necessarily equates to a verifiable loss to both firms and consumers as confidence is shaken and a determinate amount of time is wasted by both parties in verifying whether or not bills are legitimate or not (Cooper & Gail, 2008). Impact on the Economy United States of American economy has continued to experience adverse impact of counterfeiting of bills. No one can doubt the fact that counterfeiting has had disastrous economic consequences on the American economic thus affecting significantly the operations of small businesses (Cooper & Gail, 2008). Counterfeiting leads to evasion of taxes as the persons concerned with the crime do not pay taxes besides the fact that they continue to make revenue out of such actions and activities. Other ways through which counterfeiting leads to evasion of taxes is the fact that most of the goods are smuggled into the economy and so there import duties are not paid. Based on the data and research carried out by Economic Co-operation and Development, the US economy and other global economies experience a loss of approximately 100,000 jobs. Such facts and figures have also been confirmed by the European Commission (Haie-Fayle & Wolfgang, 2007). Job losses are great blows to economies following the fact that economic growth and development are measured in respect to rate of unemployment. The higher the rate of unemployment the lower the economic growth and development and this has been a common scenario in American economy and other economies of the world that continues to experience high levels of counterfeiting. There are other serious consequences of counterfeiting with an economy. When more notes or bills are produced as counterfeits other than goods and products, the economy in question is likely to experience serious breakdown in the fiscal and monetary policies. Usually the fiscal and monetary policies are put in place with respect to the prevailing cash that flows within the economy. An increase in money in circulation is likely to influence or cause disturbances amongst the fiscal and monetary policies already put in place by the governments of the economies in questions such as the United States of America. Therefore, the increased levels of counterfeits within the economy continue to pose a great challenge and threat to the existing monetary and fiscal policies especially within the contemporary environment where there has been serious impact of financial and economic crises. Impact on the Consumer Counterfeiting continues to cause serious harm on both the consumers as well as nations. Economies are collapsing and consumers are losing their confidence based on the rise of counterfeits. The end or ultimate victim of counterfeit is consumer who on one hand receives inferior quality goods or products (Cooper & Gail, 2008). Counterfeiting also leads to higher prices given the safety concerns resulting from the economic impact of counterfeiting bills. As a result, the public at large continues to suffer from the impacts of counterfeits within American economy as well as the global economy at large (Lowe, 2006). Consumers continue to suffer from the fact that there have been increased incidences of counterfeiting within the economy as well as the global arena. There is no doubt that counterfeiting has caused serious adverse effects or impacts on the economy. Impact on the Government Lastly, counterfeiting affects the government of USA and any other nation that experiences counterfeiting activities significantly. One of the ways through which counterfeiting significantly affects the government is diversion of resources (Lowe, 2006). In such scenarios governments are forced to use resources that would otherwise be used in economic reconstruction and development to enforce laws relating to counterfeiting (Brooks & Gellman, 1993). Given that counterfeiting is criminal offence considered difficulty and complex to investigate, the governments spend much time in investigating counterfeits some of which end up being unsuccessful. Therefore, counterfeiting is a criminal offence that continues to provide serious challenges to governments. Solution Various solutions have been proposed in order to help combating counterfeiting is as criminal offence. For instance, there has been use of international policing agencies such as Interpol, which assist governments in tracking down criminal cases that relate to counterfeiting (Cooper & Gail, 2008). In addition, US governments and other nations strongly hit by counterfeit activities have continued to develop anti-counterfeiting associations that include Business Software Alliance, Global Anti-Counterfeiting Group, Comite Colbert, and International Federation of the Phonographic Industry amongst others. These associations are aimed at creating awareness on the impact of counterfeiting and the serious need to develop effective measures to combat the same (Lowe, 2006). Such associations continue to prove that they can be a lasting solution to problems associated with counterfeiting as a criminal offence. To a larger extent, technology, which is also considered as a catalyst in enhancing activities of counterfeits, has been associated with remarkable solutions on the same. There have been increased development and advancements of technologies in order to help in protecting and authenticating genuine products and bills within USA and other affected nations. For instance, the use of optical technologies known as holograms has been effective in monitoring, protecting, and authenticating various products within the global arena. To date, holograms are still being employed in ensuring that every good or product is protected and authenticated in order to reduce negative or adverse impacts associated with counterfeiting of products and bills. Another technological introduction used in ensuring that counterfeiting offences are minimized is use of smart cards as well as biotechnology. Smart card applications have been associated with minimizing counterfeiting of bills (Brooks & Gellman, 1993). Given that smart cards use known, registered, and authentic organizations, it has become very difficult to duplicate smart cards (Lowe, 2006). As a result, there have been increased protections in terms of counterfeiting of products within USA and other affected nations in the global arena (Cooper & Gail, 2008). Biotechnology on the other hand have enhanced in the development of specific monoclonal antibodies with the capacity of recognizing certain antigens or associated marker chemicals. The use of smart cards and biotechnology has so far enhanced protection within the economy in as far as the counterfeiting is concerned. Lastly, there has been use of chemical technologies that are also known as technological inks. For instance, the use of photochromic (light-reactive) and thermochromic (heat reactive) materials or inks in development or creation of specific products such as bills have substantially helped in ensuring that there is effective protection against fake or counterfeit products (Cooper & Gail, 2008). Most of the technologically developed inks are typically applied within product labels, which act as proofs that they are indeed very authentic (Brooks & Gellman, 1993). The advantage of using this method is that such inks are only readable via bar-code scanners and not by naked eyes. There is no doubt that greater strides have so far been made towards combating counterfeiting as a criminal offence. Conclusion From above conclusion, there is no doubt that counterfeiting continues to be a serious menace within various sectors of the economy given the fact that it is a criminal offence. Negative impacts of counterfeiting have pushed governments and various organizations into coming with effective strategies that promote protection of the products as well as the bills. Examples of ways identified in the report include use of international policing agencies, anti-counterfeiting associations, and applications of technology. Examples of technological applications used in fighting counterfeiting as identified in the following report include use of smart cards, biotechnology, chemical technologically developed inks, and use of optical technologies such as holograms. From the research, it is obvious that such actions and strategies have been fruitful in reducing the level of counterfeiting within American and other nations that have been adversely affected by the same criminal offences. Recommendations Amongst the above alternatives, the use of technology is preferred to other alternatives and therefore recommended. Specifically, the report recommends the use of technologically developed chemical inks in creating products and bills. The main reason for recommending the use of technologically developed chemical ink is the fact that they cannot be seen or read with naked eyes but rather bar-code scanners. As a result, this is likely to improve protection of products and bills within various economies and nations. References Alcock, L., Chen, P., Hui, M. C., Hodson, S., & al, e. (2003). Counterfeiting: Tricks and trends. Journal of Brand Management, 11(2), 133-136. August, B., & Hwang, D. (2009). The surprising reach of US anti-counterfeiting laws. The IP Litigator : Devoted to Intellectual Property Litigation and Enforcement, 15(6), 32-36. Brooks, R. E., & Gellman, G. E. (1993). Combating counterfeiting. Marketing Management, 2(3), 49-49 Cooper, S., & Gail, M. E. (2008). Eight ways to minimize the risk of counterfeiting. Intellectual Property & Technology Law Journal, 20(8), 15-17. Haie-Fayle, L. & Wolfgang, H. (2007). Counterfeiting and piracy: Fakes, facts and figures. Organisation for Economic Cooperation and Development.the OECD Observer, (262), 9-11. Lowe, P. (2006). Counterfeiting: Links to organised crime and terrorist funding. Journal of Financial Crime, 13(2), 255-257. Read More