JPMorgan Chase has filed lawsuits against several customers, alleging they exploited a temporary glitch to commit check fraud. The bank claims the customers deposited large checks through ATMs, withdrew funds immediately, and left the bank with significant losses once the checks were identified as counterfeit. The glitch, which briefly went viral on TikTok, reportedly allowed deposits to be accessible before they cleared, enabling the fraud.
In federal courts across Los Angeles, Houston, and Miami, JPMorgan filed four lawsuits targeting two individuals and two businesses for allegedly withdrawing more than $661,000 in total through fraudulent means. The largest case involves a Houston resident accused of owing over $290,000 after a masked individual deposited a $335,000 check into his account, which later bounced. The man allegedly withdrew nearly the entire amount over two days before the check was rejected on September 4.
According to JPMorgan, the defendants violated their deposit agreements by retaining funds they were not entitled to, and the bank is seeking full restitution plus other costs. JPMorgan representatives say they are committed to cooperating with law enforcement to address this matter, emphasizing the importance of maintaining trust in the banking system.
JPMorgan spokesperson Drew Pusateri commented, “Fraud is a crime that impacts everyone and undermines trust in the banking system.” The bank previously reported investigating thousands of potential check fraud cases after the glitch was discovered, and it continues to pursue legal action to deter future incidents.
Check fraud is considered a federal offense. Many banks, including Chase, allow customers to access part of their deposits while awaiting clearance, a process that was exploited in this instance. JPMorgan’s legal efforts underscore the bank’s stance against fraud and its intention to hold all responsible parties accountable.
