JPMorgan begins suing clients over ‘infinite money problem’

JPMorgan Chase began suing customers who allegedly stole thousands of dollars from ATMs by taking advantage of a technical glitch that allowed them to withdraw funds before a check bounced.

The bank filed lawsuits in at least three federal courts on Monday, targeting some of the people who withdrew the highest amounts in the so-called infinite money glitch that went viral on TikTok and other social media platforms. social media at the end of August.

A Houston case involves a man who owes JPMorgan $290,939.47 after an unidentified accomplice deposited a counterfeit check for $335,000 at an ATM, according to the bank.

“On August 29, 2024, a masked man deposited a check into the defendant’s Chase bank account in the amount of $335,000,” the bank said in the Texas filing. “After the check was deposited, Defendant began withdrawing the vast majority of the ill-gotten funds.”

JPMorgan, the largest U.S. bank by assets, is investigating thousands of possible cases related to the “infinite financial problem,” but has not revealed the scale of associated losses. Despite the decline in the use of paper checks as digital payment methods gain popularity, they remain a major means of fraud, leading to losses of $26.6 billion worldwide last year, according to Global Nasdaq Financial Crime Report.

The Infinite Money Problems episode highlights the risk that social media could amplify vulnerabilities discovered in a financial institution. Videos began circulating in late August showing people celebrating withdrawing wads of cash from Chase ATMs shortly after bad checks were deposited.

Normally, banks only make a fraction of the value of a check available until it clears, which takes several days. JPMorgan claims to have closed the loophole within days of its discovery.

The other suits filed Monday are in courts including Miami and the Central District of California, and involve cases in which JPMorgan claims its clients owe the bank amounts ranging from about $80,000 to $141,000 .

Most of the cases the bank is examining involve much lower amounts, according to people with knowledge of the situation who declined to be identified regarding the internal investigation.

In each case, JPMorgan says its security team contacted the suspected fraudster, but the fraudster was not reimbursed for the fake checks, in violation of the deposit agreement that clients sign when creating deposits. an account with the bank.

JPMorgan is seeking restitution of the stolen funds with interest and overdraft fees, as well as attorney’s fees and, in some cases, punitive damages, according to the complaints.

The suits are likely just the start of a wave of litigation designed to force customers to repay their debts and send a broad signal that the bank will not tolerate fraud, according to people close to it. JPMorgan prioritized cases with large amounts and indications of possible links to organized crime, they said.

Civil cases are separate from any criminal investigations; JPMorgan says it has also submitted cases to law enforcement officials across the country.

“Fraud is a crime that affects everyone and undermines confidence in the banking system,” JPMorgan spokesperson Drew Pusateri said in a statement to CNBC. “We are pursuing these cases and actively cooperating with law enforcement to ensure that if anyone commits fraud against Chase and its customers, they will be held accountable.”