SOPHISTICATED HOME INKJET PRINTERS STIR COUNTERFEIT CONCERNS

Breaking banking industry’s traditional stony silence on security problems, De La Rue, world leader in printing bank notes and value documents, now is warning that inkjets are creating new breed of “digifeiter”. De La Rue should know: Company has been printing money since 1724 and makes notes for 150 currencies including Europe’s relatively new Euro.

Warning came after De La Rue bought out its main customer, Bank of England’s 300-year-old printing operation, earlier this year. “This is very sensitive subject but we thought it was time to say something and make people think,” said De La Rue’s John Winchcombe. In paper being sent to banks and govts. around world, De La Rue warns bluntly: “There appears to be little appreciation of the nature of the problem -- and even less sense of urgency. The world’s central banks are now having to deal with an increasing number of counterfeit banknotes, generated by color inkjet printers,” company said. “The number of people willing to take the risk has increased significantly. The age of the would-be counterfeiters is relatively young.”

Commercial copiers work on xerographic laser principle, with multiple drums and colored inks, and have been available for about 25 years. They cost tens of thousands of dollars, and since mid-1980s their makers voluntarily have built in character recognition software that detects fine detail of security marks to prevent copying currency or other valuable documents. Most commercial copy shops refuse to let customers even try.

Meanwhile, inkjet printers sell for very low prices or are given away with PCs, with profits coming from expensive ink cartridges that must be replenished. Among 4 major manufacturers that compete in market -- Canon, Epson, Hewlett-Packard and IBM spin-off Lexmark -- latest push is on “all-in-one” machines that combine color printer, copier, scanner and fax. Fierce rivalry has now driven cost below $150. Resolution is very high, at least 4,800 dots per in. (dpi), with each dot formed from droplets as small as 3 picoliters (3-trillionths of liter) of ink. Anyone now can copy anything accurately in privacy of home, at press of one button, and without need to use PC. “The banks, treasuries and police should be requiring printer manufacturers to act responsibility,” De La Rue urges in paper it circulated.

U.K.’s National Criminal Intelligence Service seemed unaware of recent developments. “Low-cost copiers do not have high enough quality, so you are looking at machines costing ?10,000,” spokesman Edward Venning said. “But I have seen the most absurd copies passed off -- with the Queen’s head on a cartoon character,” he told us. “Although bedroom printing is not a way to make large quantities of notes, it has the advantage that you don’t need litho plates. The evidence can be hidden on a CD- ROM.”

Bank of England was even less concerned. “We are confident our security measures, like watermarks and strips, stay ahead of such developments,” spokeswoman said. “Absolutely. People can read our leaflets or go to our Web site and learn how to recognize forgeries.”

Computer company Software 2000 has been working with De La Rue on new “antidigifeiting” system that prevents home printers and copiers from reproducing notes or secure documents (International patent WO 02/39719.) “Driver” software, which all PCs need to connect with printer, contains coded instructions to look for telltale signs of security detail, serial numbering and bank note size, and refuses to print. Fuzzy logic intelligently allows only low-quality, monochrome copies of suspect images. “The same system would work in a combined printer and copier,” De La Rue’s Winchcombe said. “But first the manufacturers have to agree to put it in. And so far none do”.

Printer/copier makers concede that’s so. “We do not currently have any software that will recognize or stop this duplication,” Epson in U.K. responded to our query. “Should we identify a suitable method to build in such security measures we will do so.” Hewlett-Packard in U.K. said: “Our consumer all- in-one products do not have built-in security protection to prevent the copying of bank notes, and at present [H-P] does not have any plans to introduce this technology.” Jack Morris, Lexmark technical director in U.S., told us: “Every so often the government agencies turn up on our doorstep and ask what we can do to stop people copying currency. They would like some kind of hard algorithm that recognizes bank notes. But so far we have not been able to implement this”.

De La Rue insists “antidigifeiting” methods are available, said Mark Cricket, company’s bank note security specialist. “These low-cost devices have completely changed the nature of counterfeiting. The traditional idea of a skilled man with a green visor hanging up notes to dry has gone. It’s more important now than ever before for people to be on their guard. Look and feel is still a very powerful tool. The technology to stop it is available. The challenge is to get manufacturers to adopt it. But where is the benefit for them? It’s a highly competitive market. As far as the customer is concerned, security degrades performance.”