JPMorgan Chase sues customers who took advantage of viral ‘glitch’

Court documents show JPMorgan Chase is taking legal action against customers who took advantage of a viral technical glitch that the bank says led to check fraud.

Faultdiscovered and promoted by TikTok users in late August, it allowed customers to deposit large checks at ATMs and instantly withdraw funds before they cleared.

The error gave customers access to thousands of dollars they didn’t actually have, and on Monday, Chase filed four nearly identical lawsuits against customers who collectively withheld more than $660,000 from the program.

In Texas, a bank is suing Timipah Ikemi after a masked man allegedly deposited a fake $335,000 check into its ATM account. Ikemi immediately began withdrawing the ill-gotten funds and, according to the bank, he did so retained $290,939.49 of that deposit.

In California, Micah Reed was allegedly charged owes the bank $90,794.02 after depositing two fraudulent checks into his account at an ATM and withdrawing most of the deposited money before the check bounced.

And in Florida, two companies called Riskboss Musiq and In and Out Appliances allegedly owe a debt to the bank $141,295.84 AND $138,680.91accordingly upon failure to return funds disbursed as a result of fraudulent check deposits.

The defendants could not be reached by phone Bloomberg’s Law Or Reuters.

A Chase spokesman last month said the bank had been informed of the “glitch” and that “(r)egardless of what you see online, submitting a fraudulent check and withdrawing funds from your account is fraud, plain and simple.”

Mark Guthner, an associate professor of financial practice at Rutgers University, told Banking Dive at the time that “if they took money from the bank, banking law clearly states that they have committed fraud and must pay the money back. Then the bank will have to chase people down and take them to court.”

“(It) is an offense punishable by imprisonment and fines. The people who did this are in trouble,” Guthner said.

In court documents, Chase lawyers wrote that the bank “takes pride in its efforts to protect its customers from fraudsters, particularly in an environment where bank fraud and wire fraud are increasingly common.”

“While fraud methods have evolved over time, the primary purpose of exploitation and deception remains unchanged,” the lawsuit said.