There are provided a sheet paper identification device and method capable of preventing use of the device in an abnormal state by preventing erroneous identification caused by dust attached to an interior of a pickup section, detecting the abnormal state in the pickup section due to the dust, and notifying it outside. When a sheet paper is inserted from a sheet paper insert section (3), the sheet paper is fed by a sheet paper feed section (4). An image pickup section (7) images the interior of the image pickup section (7) before the sheet paper is fed to the image pickup section (7) so as to acquire image data without any sheet paper so as to acquire image data having the sheet paper. A dust detection section (8) calculates the position and the area of the image indicating dust of the image data having no sheet paper. When the image data having the sheet paper has an image of the same area at the same position as the image indicating the dust, the image is identified as an image indicating the dust attached to the interior of the image pickup section (7) in the image data including the sheet paper. If the dust identified is other than a predetermined one, an abnormal state of the image pickup section (7) is notified to a control section (2).