RCMP in Iqaluit are warning residents to watch out for counterfeit $20 bills after some Iqaluit banks reported the fake money to police earlier this week.

Sgt. Yvonne Niego says the fakes look like the older, paper bills. They are slightly smaller than the real bills and are roughly cut. When you hold them up to the light, you won't see the hidden image of the Queen. 

"If you accidentally come across some in your wallet and try to use them or deposit them in the bank, you may be short some money. Someone else may have profited," said RCMP Sgt. Yvonne Niego. 

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The Bank of Canada designed the new polymer $20 banknote with security features to deter counterfeiters. Counterfeit $20 bills that turned up in Iqaluit this week look like the older, paper bills, say RCMP. (Bank of Canada)

Police say when you brush your fingers across a legitimate bill, you can feel the raised ink. 

But police say it would be fairly easy to be fooled by the counterfeit bills if you're in a dark place, such as a cab or a restaurant.

"We urge residents to report any potential counterfit bills prior to making it to the bank," she said. "Money changes hands everyday, quite a bit. So by the time it gets to the banks, there's almost no way to trace where it came from."

Police are advising people to check the security features of bills they suspect may be counterfeit before accepting them as payment. If you have accepted a bill you suspect may be counterfeit, turn it in to the police.