JPMorgan Chase, the largest bank in the United States, has taken legal action against several customers for cheque fraud. This move comes after a temporary technical glitch went viral on TikTok and users used this as an opportunity to exploit the banking system.
JPMorgan Chase & Co. is an American multinational financial services firm headquartered in New York City and incorporated in Delaware. It is the largest bank in the United States and the world’s largest bank by market capitalization
The Glitch Explained
In late August, a technical issue enabled customers to deposit large cheques into ATMs and immediately withdraw funds before the cheques cleared. This loophole allowed users to access money that was not yet available, leading to numerous fraudulent transactions.
On Monday, JPMorgan Chase filed four lawsuits in federal courts in Los Angeles, Houston, and Miami. The bank accuses two individuals and two businesses of illegally retaining more than $661,000 after depositing cheques that were later identified as counterfeit or forged.
Notable Case
In one significant case, a man from Houston is alleged to owe Chase $290,939.47. He withdrew most of a $335,000 cheque over two days after it was deposited by a masked individual on August 29. This cheque was rejected by the bank on September 4.
Bank’s Response
JPMorgan Chase, headquartered in New York, is pursuing these cases vigorously and is cooperating with law enforcement to ensure accountability. The Wall Street Journal previously reported that the bank is investigating thousands of potential check fraud incidents.
Statement from JPMorgan
Drew Pusateri, a spokesperson for JPMorgan Chase, highlighted the impact of fraud on the banking system, stating, “Fraud is a crime that impacts everyone and undermines trust in the banking system.” He added that check fraud is a federal crime, noting that many banks, including Chase, allow customers to access some value of their checks before they clear.
This situation serves as a reminder of the vulnerabilities in the banking system and the importance of safeguarding against fraudulent activities.
