In a bold legal move, JPMorgan Chase is suing customers it claims exploited a fleeting glitch that went viral on TikTok, allegedly allowing users to withdraw hefty sums before their checks cleared. This glitch, which emerged briefly in late August, reportedly let customers deposit large checks at ATMs and immediately access funds, even if those checks later turned out to be counterfeit or invalid.
On Monday, the bank filed lawsuits in federal courts across Los Angeles, Houston, and Miami, targeting two individuals and two businesses accused of collectively retaining more than $661,000 from deposits flagged as fraudulent. In the most substantial case, a man from Houston is said to have withdrawn nearly $291,000 from his account over two days after a masked individual deposited a $335,000 check on August 29—a check Chase later rejected.
The lawsuits allege the defendants broke their deposit agreements and demand that they return the funds alongside additional costs. JPMorgan, headquartered in New York, is working closely with authorities to hold those responsible accountable, signaling its commitment to curbing fraud. According to the bank, fraud not only costs financial institutions but also erodes public trust in the system.
Last month, the Wall Street Journal noted JPMorgan was already investigating thousands of potential check fraud incidents stemming from similar loopholes.
