The Chase Bank logo above an ATM, photographed in Manhattan.
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JPMorgan Chase Prosecutions have begun against customers suspected of using ATM machines to steal thousands of dollars technical glitch This allows them to withdraw funds before the check bounces.
The bank filed lawsuits in at least three federal courts on Monday targeting some of the people who withdrew the maximum amount during the so-called unlimited funds glitch. viral On TikTok and other social media platform Late August.
One case in Houston involved a man who owed JPMorgan $290,939.47 after an unidentified accomplice deposited a fake check worth $335,000 at an ATM, according to JPMorgan.
“On August 29, 2024, a masked man deposited a check in the amount of $335,000 into the defendant’s Chase Bank account,” the bank said in the Texas filing. “After the check was deposited , the defendant began to withdraw most of the ill-gotten gains.”
JPMorgan Chase & Co., the largest U.S. bank by assets, is investigating thousands of cases that may be related to the “infinite funds failure” but has not disclosed the scope of related losses. Although the use of paper checks has declined as digital payment methods have become more popular, they remain a major avenue for fraud, leading to $26.6 billion According to Nasdaq’s Global Financial Crime Report, global losses were high last year.
The Infinite Funds failure incident highlights the risk that social media can amplify vulnerabilities discovered by financial institutions. video It started circulating at the end of August to show people celebrate A large amount of cash was withdrawn from a Chase ATM shortly after the bad check was deposited.
Typically, banks will only provide a fraction of the check’s value until it clears, which can take a few days. JPMorgan Chase said the vulnerability was closed days after it was discovered.
Miami and California
Other lawsuits filed Monday include court in Miami and the Central District of California, involving cases in which JPMorgan Chase says customers owe the bank about $80,000 to $141,000.
Most of the cases the bank is reviewing are much smaller, according to people familiar with the matter who spoke on condition of anonymity.
JPMorgan Chase said that in each case, its security team had contacted the alleged fraudsters, but the forged checks had not been repaid, violating the deposit agreements that customers signed when they created their accounts at the bank.
JPMorgan is seeking the return of the stolen funds, as well as interest and overdraft fees, attorneys’ fees and, in some cases, punitive damages, the complaint said.
Criminal case?
The lawsuits may be just the beginning of a wave of lawsuits aimed at forcing customers to repay their debts and making a broader signal that the bank will not tolerate fraud, people familiar with the matter said. They said JPMorgan prioritized cases with larger amounts and signs of possible links to organized crime.
The civil case is separate from the potential criminal investigation; JPMorgan Chase said it is also referring the case to law enforcement officials across the country.
“Fraud is a crime that affects everyone and undermines trust in the banking system,” JPMorgan spokesman Drew Pusateri said in a statement to CNBC. “We are pursuing these cases. and actively working with law enforcement to ensure that if anyone commits fraud against Chase and its customers, they are held accountable.”
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