Some shops and ATMs in Hong Kong started to refuse HK$1,000 (US$130) banknotes after police found several counterfeit notes and arrested suspects

HK shops refusing HK$1,000 notes during holiday scare

Staff Reporter

2013-12-30

Some shops and ATMs in Hong Kong started to refuse HK$1,000 (US$130) banknotes after police found several counterfeit notes and arrested suspects, reports the Hong Kong-based South China Morning Post.The police arrested a woman who had attempted to deposit 10 fake notes at a Wing Lung Bank branch in North Point. The bank staff found in total seven fake HSBC notes and three fake Bank of China (BOC) notes, all designed after 2003 bills.

Similar notes were seized by police earlier this week.

The scare comes with the approaching Chinese New Year, worrying restaurants and shops that crucial profits will be undermined during the holiday business boom. They have urged authorities to solve the problem, and some have proactively started to refuse HK$1,000 notes until concrete action is taken.

Authorities said the concern is “unnecessary.” The executive director of the Hong Kong Monetary Authority’s management department, Howard Lee, called the public is “overly worried.” Lee said the scale of the problems is far below that of 2007, and the 2003 edition HK$1,000 notes issued by HSBC and BOC are being gradually phased out.

Chief inspector Cheung Ka-wai of the Police Intelligence and Support Division said 191 fake banknotes have been detected this year, much lower than last year’s 943.

Take note of confidence crisis

Mary Ma

Monday, December 30, 2013

Being in a financial center, it’s hardly surprising that Hongkongers tend to panic whenever counterfeit money surfaces.

Over the past week, fake HK$1,000 banknotes started turning up here and in Macau. Although the banks and police assure us that the number of counterfeits comprises only a minute fraction of the notes in circulation, it’s still a cause for alarm – especially among the elderly who tend to stash their money under their mattresses rather than in banks.

Therefore, it wasn’t the least bit surprising to see scores of elderly queuing outside banks, waiting to change their HK$1,000 bills into smaller denominations.

This boils down to confidence. Though their concern is understandable, it’s really unnecessary, for we should have confidence in our police, and because the number of fake notes that have surfaced so far isn’t large.

But what’s worrisome is some people may not be able to recognize the fakes, and so could be arrested for on – which would be rather messy and troublesome.

So, it’s important for police and the Monetary Authority to tackle the confidence crisis at an early stage. True, they did remind people to be on the alert, but why not confront the issue in a more transparent way by telling the public just how bad it is, and the steps being taken to track down the source of the notes?

By being more transparent, police can dispel any notion that our authorities are less efficient than their Macau counterparts, who stole the limelight by announcing details of their seizure. They were also the first to publicize the fact the counterfeits were not only from the Bank of China’s 2003 series, but also from Hongkong and Shanghai Bank.

The syndicates chose the Christmas and New Year period to circulate the fake banknotes, in the hope they would go unnoticed during the holiday shopping and gambling sprees.

Since Hong Kong and Macau discovered the counterfeits at about the same time, it shows the law enforcers of both SARs have acted promptly. It also proves the mechanism to prevent the flow of fake notes is effective.

So don’t be surprised if more bogus bills surface. The authorities should order a recall of the 2003 series as soon as possible in order to restore public confidence.

Of immediate concern is whether the syndicates have found a way to print counterfeits of the 2010 banknote series – along with their anti-counterfeiting features – as well as banknotes issued by Standard Chartered Bank.

If the counterfeits are limited to the 2003 series of HSBC and Bank of China, then the problem won’t be that serious.

The number of fake banknotes found in Hong Kong is considered minuscule when compared to Western nations.

According to police figures, only 1.4 out of one million banknotes in Hong Kong are fake, versus 28 out of one million in Canada, 34 of one million in the euro zone, and 247 out of one million in the United Kingdom.

Given these statistics, there’s little reason to panic.