JPMorgan is suing customers for check fraud after exploiting a viral ATM flaw

JPMorgan Chase launched a series of lawsuits on Monday against customers the company accused of exploiting a technical glitch that went viral on TikTok to extract thousands of dollars.

The glitch that occurred in late August allowed customers to deposit large checks at ATMs and immediately withdraw money before the checks cleared, even if the checks later bounced.

The nation’s largest bank filed complaints in Houston, Miami and two in Los Angeles accusing two individuals and two companies of illegally holding more than $661,000.

In the largest case, JPMorgan said a Houston man still owes $290,939.47 after withdrawing most of a $335,000 check over two days that a masked man deposited into his account on Aug. 29. The bank said the check was dishonored on September 4.

The defendants did not respond, accept or could not immediately be reached by messages seeking comment on Monday.

Civil lawsuits do not exclude or end the possibility of bringing any criminal charges.

All four lawsuits accuse the defendants of violating their deposit agreements, and demand the return of improperly withdrawn funds as well as other costs.

New York-based JPMorgan said it is pursuing cases and cooperating with law enforcement to ensure people are held accountable.

“Fraud is a crime that affects everyone and undermines confidence in the banking system,” JPMorgan spokesman Drew Pusateri said in a statement.

Check fraud is a federal crime. Many banks including JPMorgan allow customers access to some of the value of their checks until the checks clear.

Last month, the Wall Street Journal reported that the bank was investigating thousands of potential check fraud incidents.

Paper checks are no longer accepted in most European countries. For example, the United Kingdom and the Netherlands abrogated these agreements two decades ago.

However, it remains a popular payment method in the United States, despite the increasing use of digital technology such as ApplePay.

The checks led to $26.6 billion in losses globally last year, according to Nasdaq’s Global Financial Crimes Report.