JPMorgan Chase has begun suing people who exploit the “permanent cash crisis”—or check fraud—this summer.
In August, posts began circulating on social media showing users how to exploit the “bug” by inserting fake checks into bank ATMs to get large amounts, and withdrawing some of that cash before the check bounces. The now closed loophole is expanding rapidly, with social media users cashing in on the trend and flaunting their success for all to see.
Chase is now pleading guilty to several lawsuits, CNBC reports, including one in the U.S. District Court for the Southern District of Texas. “On August 29, 2024, a masked man deposited a check into Defendant’s Chase bank account in the amount of $335,000,” the bank said in the Texas filing. “After the check was deposited, the Defendant began withdrawing most of the ill-gotten gains.” The check was rejected because it was fraudulent, but the bank discovered that the man owed JPMorgan $290,939.47.
Additional charges were also filed in Miami and the Central District of California, where the defendant allegedly cashed two fraudulent checks totaling $116,063.55. While the checks were eventually returned, Chase says he owed the bank $90,794.02 and failed to pay the amount of the overdraft and dues. Those who are involved in this practice are now showing their worst accounts on the internet and talking about the lawyer.
Chase is seeking the return of the stolen funds with interest and overdraft fees. This is in addition to attorneys’ fees and, in some cases, punitive damages, according to the complaints.
“Chase takes its responsibility to fight fraud seriously and prioritizes protecting the company and its customers and making the banking system safer,” the bank said in Monday’s filing. “Part of that job is holding people accountable when they commit fraud against Chase and its customers. Simply put, bank fraud is a crime.”
“Fraud is a crime that affects everyone and undermines trust in banks,” said a Chase spokesman. “We are pursuing these cases and working with law enforcement to ensure that if someone commits fraud against Chase and its customers, they will be held accountable.”
Investigate fraud results in approximately $26.6 billion in losses annually, according to Nasdaq’s Global Financial Crime Report. By 2023, 80% of check fraud will occur in the Americas.
