JPMorgan Chase said Monday that TikTok users who jumped on the get-rich-quick trend are breaking the law.
Taking advantage of a temporary glitch in Chase’s ATM system, customers were able to deposit bounced checks and then quickly withdraw the funds before the checks were bounced.
Video posted to social media It showed people waiting in line at a Chase store. He was also seen in videos purportedly waiting to withdraw money he had just “deposited” into a banking app using fraudulent cheques, as well as celebrating with stacks of fraudulently obtained cash.
“We are aware of this incident and have already addressed it,” a Chase spokesperson told Banking Dive. “Regardless of what you may have seen online, depositing a fraudulent check and withdrawing funds from your account is fraud, plain and simple.”
A spokesperson declined to comment on what caused the glitch, or to say how many customers or how much money had been exploited.
Dan Orley, a Cornell University law professor who specializes in financial regulation, The original Twitter user X said: So-called check kiting has been around since the invention of checks.
People who tried to take advantage of the glitch were hit with seven-day holds and negative balances, the company said. New York Post.
“If they have withdrawn money from the bank, then under banking law it is clear that fraud has occurred and they should get their money back,” Mark Gassner, an associate professor of financial practice at Rutgers University, said of the customers who participated in the fraud, in a conversation with Banking Dive. “Then the bank goes after them and takes them to court.” [It’s] “This is a criminal offence and can result in jail time and fines. Those who do this deserve trouble.”
Gassner said Chase expects losses from the glitch to be negligible.
“Certainly, some people may escape without ever finding it. [from whom] “It’s like trying to squeeze blood out of a rock. They don’t have blood. You can’t squeeze blood out of them,” he said. “But this won’t be a huge loss. Rather, it’s a huge embarrassment for the people who run the banks. This is an embarrassment for everybody, but it won’t have any bearing or impact on the health of the banking industry because it’s not big enough.”
In recent years, the use of cheques has declined sharply, Federal Reserve SystemCheck fraud has followed a different trajectory, increasing 385% nationwide since the COVID-19 pandemic. Ministry of Finance The numbers show.
Chase’s glitch was temporary, but this type of fraud — writing out a check and cashing it before it’s determined to be fraudulent — is not uncommon. A Michigan man said: Imprisonment for 8 years or more Last year, a California man was arrested in a separate case of check fraud. Imprisonment for six years or more.
A Chase spokesman declined to comment on the potential impact to people who tried to take advantage of the now-fixed glitch.
