JPMorgan Chase sues customers for exploiting viral ‘infinite money glitch’

JPMorgan Chase, the most important U.S. bank by assets, has filed lawsuits against customers who allegedly took advantage of a technical glitch to withdraw large amounts of funds from ATMs before the deposited checks bounced.

The lawsuits, which were filed in no less than three federal courts on October 28, are directed at individuals who allegedly withdrew essentially the most significant ones amounts under the so-called “infinite money bug,” a program that gained popularity on social media platforms similar to TikTok in late August.

The most notable case involves a Houston man who JPMorgan says owes $290,939.47 after an unidentified accomplice deposited a fraudulent check totaling $335,000 at an ATM.

“On August 29, 2024, a masked man deposited a check into Defendant Chase’s bank account in the amount of $335,000,” JPMorgan said within the Texas lawsuit. “After depositing the check, the defendant began withdrawing most of his ill-gotten funds.”

JPMorgan reportedly investigated hundreds of cases involving various sums within the wake of the virus glitch. While the bank didn’t disclose the full financial impact, its investigation highlighted the continuing challenge of check fraud, a world problem that caused $26.6 billion in losses last 12 months alone, in keeping with Nasdaq’s Global Financial Crime Report. While using paper checks has declined, JPMorgan’s “infinite financial glitch” episode shows how social media can increase vulnerabilities in financial institutions.

The glitch was reportedly fixed a number of days after it was discovered, allowing customers to bypass the standard waiting period that banks impose for checks to clear. Under normal circumstances, only a portion of the check value is on the market for immediate withdrawal, with the rest available only after the check clears, which can take several days.

In addition to the Texas case, JPMorgan has filed additional lawsuits in Miami and California involving clients accused of paying out amounts starting from $80,000 to $141,000. Most of the cases involve smaller sums, in keeping with people accustomed to the bank’s internal investigation, although JPMorgan prioritized cases with larger amounts and those who could have ties to organized crime groups.

Court documents show that JPMorgan’s security team contacted people suspected of committing fraud, asking for the return of fraudulent checks under the terms of the bank’s deposit agreement. The bank’s lawsuits seek refunds, interest, overdraft fees and, in some cases, punitive damages. The financial institution can be looking for damages for legal costs related to remediation.

These civil cases mark the start of a broader legal campaign by the bank against people it accuses of fraudulently obtaining funds through the ATM loophole. In addition to the civil cases, JPMorgan is reportedly turning over cases to law enforcement agencies across the country, paving the best way for potential criminal charges. According to sources accustomed to the bank’s approach, this strategy signals that JPMorgan will actively pursue criminals, specializing in cases indicating possible links to organized fraud groups.

“Fraud is a crime that impacts everyone and undermines confidence in the banking system,” Drew Pusateri, a spokesman for JPMorgan, said in an announcement to CNBC. “We are investigating these matters and actively working with law enforcement to ensure that if anyone commits fraud against Chase and its customers, they are held accountable.”

The lawsuits reflect JPMorgan’s commitment to recuperate funds lost to ATM fraud and function a warning to discourage similar schemes. The bank’s proactive stance also reflects growing awareness of how social media can facilitate the rapid exploitation of monetary vulnerabilities, highlighting the evolving bank security landscape.