In response to an ATM glitch that allowed users to withdraw funds from uncleared checks, JPMorgan Chase has filed lawsuits against several customers for alleged check fraud. The technical error, which briefly went viral on TikTok, reportedly enabled customers to deposit large checks and immediately access funds before the bank could verify the check’s legitimacy.
JPMorgan filed four lawsuits on Monday across federal courts in Los Angeles, Houston, and Miami, accusing two individuals and two businesses of withdrawing over $661,000 in total by taking advantage of this glitch. The largest case involves a Houston resident who reportedly withdrew nearly $291,000 after a $335,000 check was deposited into his account by an unidentified man on August 29. When the check was later deemed counterfeit, the bank said it suffered substantial losses.
The bank alleges that each defendant violated their deposit agreements by unlawfully retaining funds, and JPMorgan is seeking the return of the money plus related costs. The lawsuits are part of a larger investigation into check fraud incidents, which JPMorgan said it had been closely monitoring since September.
JPMorgan spokesperson Drew Pusateri stated, “Fraud is a crime that impacts everyone and undermines trust in the banking system.” The bank has been cooperating with law enforcement to prevent future incidents and hold those accountable who may have knowingly exploited the system.
Check fraud is classified as a federal crime. While banks, including Chase, typically allow partial access to check deposits before full clearance, this policy was exploited in this case. JPMorgan’s recent lawsuits demonstrate the bank’s commitment to addressing fraud and preventing further abuses of banking processes.
