by JPMorgan Chase launched a series of lawsuits Monday against clients accused of exploiting a technical glitch that went viral on TikTok to withdraw thousands of dollars.
The problem that occurred in late August allowed customers to deposit large checks into ATMs and withdraw funds immediately before the checks could clear, even if they later bounced.
The nation’s largest lender filed complaints in Houston, Miami and two in Los Angeles, accusing two individuals and two companies of illegally keeping 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 that a masked man deposited into his account in two days on August 29. The bank said the check bounced on September 4.
The defendants did not immediately respond, accept or be reached for messages seeking comment Monday.
Civil proceedings do not exclude or terminate the possibility of criminal proceedings.
All four lawsuits accuse the defendants of violating their deposit agreements and seek restitution of improperly withdrawn funds as well as other fees.
New York-based JPMorgan said it was pursuing these cases and cooperating with law enforcement to ensure people were held accountable.
“Fraud is a crime that affects everyone and undermines confidence in the banking system,” JPMorgan spokesperson Drew Pusateri said in a statement.
Check fraud is a federal crime. Many banks, including JPMorgan, allow customers to access a portion of the value of their checks until the checks clear.
Last month, the Wall Street Journal reported that the bank was investigating thousands of possible check fraud incidents.
Paper checks are no longer accepted in most European countries. For example, the United Kingdom and the Netherlands abandoned them twenty years ago.
Yet they remain a popular payment method in the United States, despite the growing use of digital technologies like ApplePay.
The controls led to global losses of $26.6 billion last year, according to Nasdaq’s Global Financial Crime Report.
