JPMorgan Chase is suing customers who exploited viral ‘glitch’

JPMorgan Chase is taking legal action against customers who took advantage of a viral technical glitch that the bank says resulted in check fraud, according to court documents.

The glitchwhich was discovered and promoted by TikTok users in late August, allowed customers to deposit large checks into ATMs and immediately withdraw money before the checks cleared.

The mistake gave customers access to thousands of dollars they didn’t actually have — and on Monday, Chase filed four nearly identical lawsuits against customers who withheld a total of more than $660,000 from the scheme.

In Texas, the bank is suing Timipah Ikemi after a masked man deposited a fraudulent check for $335,000 into his account at an ATM in late August. Ikemi immediately began withdrawing the ill-gotten money and, according to the bank, did so withheld $290,939.49 from that deposit.

In California, the defendant is said to have been Micah Reed owes the bank $90,794.02 after depositing two fraudulent checks into his account at an ATM and withdrawing much of the deposited money before the check bounced.

And in Florida, two companies called Riskboss Musiq and In and Out Appliances are said to have debts to the bank $141,295.84 And $138,680.91respectively, after failing to return funds withdrawn from fraudulent check deposits.

The suspects could not be reached Bloomberg Law or Reuters.

A Chase spokesperson said last month that the bank had been made aware of the “glitch” and that “(r)egardless of what you see online, depositing a fraudulent check and withdrawing the money from your account is fraud, clear and simple.”

Mark Guthner, an associate professor of financial practice at Rutgers University, told Banking Dive at the time that “if they took the money out of the bank, banking law is pretty clear that they committed fraud and they have to give the money back. Then it is up to the bank to track down the people and take them to court.”

“(It is) a criminal offence, subject to possible imprisonment and a fine. The people who did this are in trouble,” Guthner said.

In court documents, Chase’s attorneys wrote that the bank “is proud of its efforts to protect its customers from fraudsters, especially in an environment where bank fraud and wire fraud are on the rise.”

“While the fraud methods have evolved over time, the core intent to exploit and deceive remains unchanged,” the lawsuits say.