JPMorgan Sues Customers Over Viral ATM Check Fraud, Alleging $661K in Illicit Withdrawals

JPMorgan Chase has launched lawsuits against four customers, alleging they exploited a viral ATM glitch to withdraw $661,000 in fraudulent funds. The malfunction allowed checks to be deposited and withdrawn before clearing, with some checks later marked as counterfeit. Chase seeks to reclaim the misappropriated funds.

Chase Pursues Legal Action in $661K Check Fraud Cases Following Major ATM Glitch

JPMorgan Chase, the largest bank in the United States, has initiated legal proceedings against its customers for check fraud. According to Reuters, the bank accuses them of illegally withdrawing funds by exploiting a transient technical malfunction that gained widespread attention on TikTok.

In late August, a glitch permitted customers to deposit substantial checks in ATMs and withdraw funds promptly before the checks could clear, even if the checks subsequently bounced.

On October 28, Chase filed four lawsuits in federal courts in Los Angeles, Houston, and Miami. The lawsuits accuse two individuals and two businesses of illegally retaining over $661,000 after the deposited checks were designated counterfeit or forged.

Chase reported that a Houston man is still in debt of $290,939.47 after withdrawing most of a $335,000 check that a masked man deposited in his account on August 29. This was the most significant case. According to Chase, the check was declined on September 4.

JPMorgan Targets Suspected Fraud in Lawsuits, Reinforcing Security Amid Check Forgery Surge

On October 28, the defendants either declined to respond, refused to accept, or could not be promptly contacted for comment.

The defendants are accused of violating their deposit agreements in all four lawsuits. They are seeking to return funds that were unlawfully withdrawn and other costs.

JPMorgan, headquartered in New York, stated that it actively investigates cases and collaborates with law enforcement to guarantee that individuals are held accountable.

The Wall Street Journal reported last month that the bank was investigating thousands of potential instances of check forgery.

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

Check falsification is a federal offense. Customers are permitted to access a portion of the value of their checks until numerous financial institutions, such as Chase, clear them.