JPMorgan is suing customers for check fraud related to a viral error

JPMorgan Chase, the largest U.S. bank, has begun suing customers for check fraud, claiming they improperly withdrew money by illegally exploiting a temporary technical glitch that went viral on TikTok.

The glitch in late August allowed customers to deposit large checks at ATMs and immediately withdraw funds before the checks could be cashed, even if the checks were later cashed.

Chase filed four lawsuits Monday in federal courts in Los Angeles, Houston and Miami, accusing two individuals and two companies of illegally withholding more than $661,000 after checks they deposited were deemed forged or counterfeit.

In the largest case, Chase said, a Houston man still owes $290,939.47 after withdrawing most of a $335,000 check in two days that a masked man deposited into his account on Aug. 29 had paid in. Chase said the check was declined on Sept. 4.

The defendants did not respond Monday, did not accept the request or could not immediately be reached with messages seeking comment.

All four lawsuits accuse the defendants of violating their deposit agreements and demand reimbursement of the improperly withdrawn funds and other costs.

New York-based JPMorgan said it was following the cases and cooperating with law enforcement to ensure people were held accountable.

Last month, the Wall Street Journal said the bank was investigating thousands of possible incidents of check fraud.

“Fraud is a crime that affects everyone and undermines trust in the banking system,” JPMorgan spokesman Drew Pusateri said in a statement.

Check fraud is a federal crime. Many banks, including Chase, give customers access to a portion of the value of their checks until the checks clear.

Topics
Lawsuit fraud