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From: Sean Farrow[/O=MMS/OU=EXCHANGE ADMINISTRATIVE GROUP
(FYDIBOHF23SPDLT)/CN=RECIPIENTS/CN=SEAN.FARROWF90D5424-A655-488D-9010-
7DFABC0364FB]
Sent: Tue 30/12/2014 6:08:35 PM (UTC)
To: I Michael R
Subject: RE: Counterfeit notes
Mark
There is far too much here to go through. There is probably something like 12-20 pages of info within these sections. I
don’t know if there is PDF or Word document containing the same info OR whether this is the only medium used
(including storage).
Sean
From: Mark Underwood:
Sent: 30 December 2014 17:50
To: Michael R Haworth
Cc: Sean Farrow
Subject: RE: Counterfeit notes
Or alternatively...
Sean I realise this may be very tedious but if you were able to detail exactly what is written in each (4?) of the
sections where Counterfeits are mentioned on Horizon online that would probably be more useful
Le.
Question C - Branch to Branch remittances —
e Horizon online — F10 Back Office > F4 > F4 > F2 or F3
¢ How to send cash from a Core to an Outreach branch and vice versa
e Neither refers to checking of notes
Question F — Counterfeits in remittances —
e Horizon online — F10 Back Office > F4 > F2 > F4 > F3 (Pages 3 & 4)
e How to account for counterfeits when remitting back to the Cash Centre
Question E & F — Counterfeit instructions — day to day in branch
e Horizon online — F7 Retail > F2 > F1 > F4 (screen shot below shows the seven areas covered)
e Covers all aspects of identifying, treating, handling and remitting counterfeits in branch
Plastic Bank note envelopes — should all be clearly marked.
e Horizon online — F3 Banking & Financial services > F1 > F2 > F2 > F12
e Confirms how Santander customers should complete PBNE’s and therefore what the branch
should check — note — any counterfeits found in Santander PBNE’s are claimed from Santander
customers — the branch is not part of the process nor takes any liability.
Mark
From: Mark Underwood:-1
Sent: 30 December 2014 17:44
To: Michael R Haworth
Cc: Sean Farrow
Subject: RE: Counterfeit notes
Thanks Sean,
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Michael- are you able to supply me with Hi Res versions of the screen shots at the bottom of this email chain?
Many thanks
Mark
From: Sean Farrow
Sent: 30 December
To: Mark Underwos
Subject: RE: Counterfeit notes
Mark
That I don’t know. Suspect not. Michael Haworth may be able to point you in the right direction if you are looking for
better screen shots ect.
I haven’t copied him in on this, but he is our link into the rest of Network.
Sean
From: Mark Underwood}
Sent: 30 December 2014 17:30
To: Sean Farrow
Subject: RE: Counterfeit notes
Thanks Sean,
Sorry for my ignorance, would I be able to log on to Horizon myself to access the guides detailed below?
Mark
From: Sean Farrow
Sent: 30 December 2014 16:28
To: Mark Underwood
Cc: Belinda Crowe; Sandra Murray; Keith Rann
Subject: RE: Counterfeit notes
Mark
Based on our conversation and the “potential” for this to become public knowledge I have amended the original
email, striking through what should be deleted and adding in new shorter sentences in red.
I have also obtained the latest booklet produced by the Bank of England which we send to branches with our letter
which provides lots of useful tips about what to look out for when checking notes.
I have also re-written the ATM points from the email sent earlier today.
e — All cash for use in Branch ATM’s are provided to branches from the Cash Centres. No cash should be re-
circulated for ATM usewithin-the-branch;onh A-handedt. i be ireulated.
Ofthe £190M lculate that £50 is extra te the branch: tneeds which branches-wh
this £50Mal -£50M back centres.
«Se this will be branches who-f pl £100K inthe ATM but in-branch. h than they pay
+B. thi 5) d-withinthe AFM it has-te-b tback-t Ives.
o_Thi deli dcollect peuches-(at cost} and havete-p blat cost) withi
Supply-Chain-
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oH. MUST-do-this-t + Bankof England. i ts-of being inthe NCS-seh:
S S-
e¢ We must check all cash that leaves the cash centre for ATM use to ensure it is all counterfeit free and meets
the Bank of England’s exacting note standards.
Hopefully with the detail behind this you will have enough for the meeting on the 9°".
I can dial in at whatever time should you need anything on the day. Just send me the actual times as necessary.
Sean
From: Mark Underwood:
Sent: 29 December 2014 13:04
To: Sean Farrow
Cc: Belinda Crowe
Subject: RE: Counterfeit notes
Hi Sean, how does tomorrow suit? At say midday — do you have a number I can call you on as that may be the simplest
way?
Like you say it would be useful to better understand the process of passing back counterfeits to branch but also the 4
points made below as I am not au fait with cash centres or circulation schemes.
It is also important that anything we do provide, we are happy for it to be public knowledge. Although the report is
supposed to be confidential, it is likely it will be leaked. This in mind, we may need to revisit the info provided?
Speak tomorrow
Mark
From: Sean Farrow
Sent: 29 December 2014 10:53
To: Mark Underwood:
Subject: RE: Counterfeit notes
Mark
I actually work in Ipswich so we can do a call sometime this week to talk over this. When do you want to discuss this?
As for the 9" I have an appointment in Ipswich around lunchtime. But could dial into a meeting for this particular
session to answer any questions Second Sight may have.
With regards withholding any info, what I would say is for Second sight this is fine BUT it this is for them only.
Keith Rann’s-st FOLoring
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Sean
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From: Mark Underwood
Sent: 24 December 2014 16:29
To: Sean Farrow; Belinda Crowe
Cc: Keith Rann; Sandra Murray
Subject: RE: Counterfeit notes
Hi Sean,
This is very comprehensive and a great help — thank you for pulling it all together so quickly.
I am around every working day until 7 January so it would be great to talk through as you propose. I also note you are
in the office on the 9 January? Second Sight are coming in for a meeting to discuss the answers we have provided —
would you be able to attend to discuss issues surrounding counterfeit notes? I will send you an invitation
Also — is there anything in the below email trail you would not be happy to be included in our response (i.e. would
compromise our security)?
Many thanks
Mark
From: Sean Farrow
Sent: 24 December 2014 13:27
To: Belinda Crowe; Mark Underwood:
Cc: Keith Rann; Sandra Murray
Subject: Counterfeit notes
Belinda / Mark
Please can we discuss this as a) there is a lot here & b) crucially I'd like you to better understand our
approach to passing the few counterfeits back to branch. As this is designed to instigate a supportive
conversation that they either decide to or not to have with us. (I am in the office any time week
commencing the 29" Dec or the 5""/ 7" (am only) / 8" or 9" Jan)
For reference I have attached our current Counterfeit letter that is sent to branches plus an article from the
Daily Telegraph earlier this month which nicely and succinctly references our need to not disclose our
“security procedures” as referenced in your email.
We have answered the questions from the original email. Plus please see these additional sections to
provide:
e Context to our approach
e Process used in Supply Chain
der Taken out because it
contains information ona ‘third party bank - Santander
e Horizon processes as extracted from Horizon online
Note — there are many references to PBNE’s — these are Plastic bank note envelopes used to seal up
notes, any discrepancies within these packets remain the liability of the person making up the notes.
Context to our approach
e The majority of counterfeits get claimed from other partieseither ROL-or Santander-customers with
a small number going to Branches
The administration of counterfeits is time consuming in comparison to other discrepancies.
Where liability cannot be established Supply Chain takes the loss themselves
In essence we are the “Gatekeepers” for POL in the control of counterfeits, not the beneficiaries.
Please note - in the eyes of the law knowingly passing and handling a counterfeit note is a criminal
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offense.
Process used in Supply Chain
e Once a counterfeit is identified it is verified by a second person
e We then determine liability based on the PBNE information available to us
Horizon processes as extracted from Horizon online
There are three places within Horizon online that refers to counterfeits & one concerning Santander
PBNE’s
Question C — Branch to Branch remittances —
e Horizon online — F10 Back Office > F4 > F4 > F2 or F3
e How to send cash from a Core to an Outreach branch and vice versa
e Neither refers to checking of notes
Question F — Counterfeits in remittances —
e Horizon online — F10 Back Office > F4 > F2 > F4 > F3 (Pages 3 & 4)
e How to account for counterfeits when remitting back to the Cash Centre
Question E & F — Counterfeit instructions — day to day in branch
e Horizon online — F7 Retail > F2 > F1 > F4 (screen shot below shows the seven areas covered)
e Covers all aspects of identifying, treating, handling and remitting counterfeits in branch
Cash Mandting / Countertait banknotes, chee
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Plastic Bank note envelopes — should all be clearly marked.
e Horizon online — F3 Banking & Financial services > F1 > F2 > F2 > F12
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e Confirms how Santander customers should complete PBNE’s and therefore what the branch
should check — note — any counterfeits found in Santander PBNE’s are claimed from Santander
customers — the branch is not part of the process nor takes any liability.
Make-up of deposits (Page 1 of 3) ‘Med C2 OL ATVE
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Sean
Sean
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Farrow I Senior Accounting & Compliance Manager
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24 Dashwood Close, Ipswich, IP8 3SR
N/A
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From: Keith Rann
Sent: 19 December 2014 18:34
To: Sandra Murray; Sean Farrow
Subject: Fw: counterfeit notes
Importance: High
Both,
Please deal with this for me.
Regards
Keith
From: Belinda Crowe
Sent: Friday, December 19, 2014 05:37 PM
To: Keith Ran nc cnenananenennnnnennnnnennnnnennenesnenn
7 Subj counterfeit notes
Hi Keith
As part of the Mediation Scheme I have been asked to provide answers to the questions below. Could you please
either let me have the answers to those questions or point me in the direction of someone who can answer them.
I am afraid I have a very tight turnaround for the answers so grateful if someone would be able to provide the
information. It is likely that it will become public and I am conscious of the need to ensure security is not
compromised therefore that could affect the amount of detail you are able to provide.
You will see that one question has been struck through. This is not a question for you but is displayed in this way to
preserve the numbering.
Happy to discuss if helpful.
Best wishes
Belinda
Belinda Crowe
148 Old Street, LONDON, EC1V 9HQ.
From: Mark Underwood
Sent: 19 December 2014 16:47
To: Belinda Crowe
Subject: counterfeit notes
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Hi Belinda — as discussed please see below questions from SS in relation to
counterfeit notes
1. Transaction anomalies associated with CASH or STOCK Remittances 1.1.
Please provide full details of the following:
a) all procedures and controls in place to detect and prevent damaged or counterfeit notes being issued
to branches as REMs;
There are four key elements within the Cash Centre that ensure integrity of notes sent to branches, use of
high speed note counters which are calibrated daily to meet the Bank of England’s exacting note
standards. These machines are maintained by on-site engineers
eo _U: f High sp d-not wate {G&D-machin: } h-note-i: ray ked for all pi ib}
all procedures and controls in place to detect damaged or counterfeit notes in outward REMs sent
from a branch to a cash centre;
It has to be noted the presentation of cash within a remittance to a Cash Centre aids the identification and
ultimately the liability of counterfeits
e If cash is presented within PBNE’s and have the originating customers or branches details on
them liability can be assigned. During calls with branches many fail to ensure Santander
customers complete PBNE’s details correctly. In failing in this aspect, liability has to be assumed
as being branch cash.
e Any notes identified as a counterfeit are verified by a second person.
e The relevant PBNE is used to identify the source of the cash.
eo Within-theGash-Gentres. hy. Galibrated-desk-t p not t te id-the-id: tificati of-non-
olf unterfeit-this-is-th ified-b el A
c) all procedures and controls in place that prevent notes included in an outward REM from a branch
being sent to another branch as an inward REM without being counted or checked for damaged or
counterfeit notes;
Supply Chain does not physically control or transfer notes between branches. However the “Branch to
Branch remittances” process shown in the main email above highlights the Horizon online instructions.
da} Ip ve re trol. dt that st }: val REMS f¢ i TM: t th, J, it
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e) all procedures and controls used in branch to detect counterfeit notes;
Within the Methods of Payments section on Horizon online
f) the procedures to be followed in branch when a Subpostmaster detects counterfeit notes; and
There are two areas to reference here:
e Method of payments — 7 different scenarios covered when identified in branch
e Within Back Office — how to send counterfeits to the cash centre
g) who bears the loss associated with accepting counterfeit notes?
Whoever made up the PBNE or if loose cash the person making up the remittance. The majority of
counterfeits become the loss of POL unless the branch either has several counterfeits in a single rem, or a
number of counterfeits over a period of time or the quality of the counterfeit is so poor. And even then only
if they fail to call to discuss the matter when they receive our letter and Bank of England leaflet (see
attached)
«Where the source is identified:
Mark Underwood
Initial Complaint and Mediation Scheme
GRO