Is the pen mightier than the counterfeiters? With fraudulent banknotes continuing to be in circulation all over the world, a simple technology could prove to be a first and easy line of defense.

South Korean police recently seized almost 10,000 fake US$100 bills brought in from China, and known as "supernotes" for their high quality. They arrested four people who were caught trying to sell the notes for $50 each. In Tuscaloosa, Alabama, investigators of the Police Department's Financial Crime Unit arrested two individuals who they believe are part of a larger operation that's printing and circulating bogus bills in the Tuscaloosa area. In Canada, the Bank of Canada, the Royal Canadian Mounted Police, the Sûreté du Québec, and the Service de Police de la Ville de Montréal have been warning the public that counterfeit $100 notes of the latest bank note series (featuring a metallic stripe) have been circulating in the Greater Montréal Area.

While there are several solutions available for detecting counterfeit banknotes – including LED/audio indication of note authenticity, RFID banknote protection systems, currency-authenticating workstations that can detect high security printing features in various lighting –one of the simplest and most cost-effective solutions is a counterfeit banknote detection pen. These pens can detect fraudulent Swiss francs, euros, and US banknotes among others.

An article in howstuffworks.com explains the method more thoroughly. For example, the latest $20 bills from the U.S. Bureau of Engraving and Printing contains a host of security features designed to make counterfeiting more difficult, including: the "20" in the lower right corner written in color-change ink, a security strip embedded in the paper to the left of Andrew Jackson that is visible when held up to the light, micro-writing, a watermark and very closely spaced lines that are harder to reproduce. But in spite of this, the counterfeit detector pen solves one of the biggest counterfeiting threats today. Here's why:

• Instead of utilizing expensive presses and special inks and papers to create exact duplicates of the bills, today's counterfeiters usually use color copiers and color printers try to create only passable facsimiles of a bill, and not an exact copy – a close-enough version of the real thing that people won't notice anything if they give the bill a passing glance.
• Counterfeit detector pens contain an iodine solution that reacts with the starch in wood-based paper to create a black stain. While genuine banknotes are printed on cotton fiber-based paper which does not contain the starches that react to iodine, counterfeiters usually copy or print onto normal, wood-based paper.
• When the iodine solution is applied to the fiber-based paper used in real bills, no discoloration occurs (the mark may be yellowish or clear). The pen only detects bills printed on normal copier paper instead of the fine papers used by the U.S. Treasury.

Dri Mark's Smart Money counterfeit detector pen w/ adhesive holder and coil – counterfeit detection plus convenience

Effective on all US currencies, Dri Mark's counterfeit detector pen is an inexpensive tool for detecting bad bills and deterring counterfeiters from passing phony currency in the first place. A re-useable holder and coil add even more convenience, because once the pen needs to be replaced, one can simply pull the pen out of the rubber holder and insert a new pen.

iTestCash.com sells a counterfeit detector pen with an ultraviolet light

It detects counterfeit currency, credit cards, driver licenses, secure and chemically altered checks, cashiers checks, passports, visas and many other important documents. Its UV light will reveal security features hidden in bills, checks and other security protected documents.

The UK's Crime Prevention Products offers the Chaperone® Counterfeit Detection Pen checks authenticity of bank notes via color change to paper.

Like other similar products, simply making a small, swift line on each £20 note with the Chaperone® Counterfeit Detection Pen will immediately show whether further inspection is necessary. If the note is genuine, the mark left by the pen will be light in color but if the pen leaves a dark or black mark, the probability is that the note is a forgery.

While critics suggest that the effectiveness of counterfeit detector pens is lower than what their manufacturers claim and the US Secret Service does not include such pens in its guidelines for detecting fake US currency, according to former Secret Agent Larry Goddard is on record as saying, "Protecting yourself against these thieves should be at the top of your priority list. [The] counterfeit detector pen is a quick and easy first line of defense.