JPMorgan Chase Suing Customers for Check Fraud

By Jonathan Stempel

NEW YORK (Reuters) – JPMorgan Chase (NYSE:JPM), the largest U.S. bank, has begun suing customers for check fraud, citing that they misused a temporary technical glitch that gained attention on TikTok.

The glitch, which occurred in late August, enabled customers to deposit large checks in ATMs and withdraw funds immediately before those checks cleared, even if they later bounced.

Chase filed four lawsuits on Monday in federal courts located in Los Angeles, Houston, and Miami, accusing two individuals and two businesses of illegally keeping over $661,000 after the checks they deposited were found to be counterfeit or forged.

In the most significant case, Chase claims a Houston man owes $290,939.47 after withdrawing most of a $335,000 check that a masked individual deposited into his account on August 29. The check was rejected on September 4.

The defendants have not responded, and efforts to reach them for comment were unsuccessful.

All four lawsuits allege violations of deposit agreements and seek the return of improperly withdrawn funds along with additional costs.

Based in New York, JPMorgan stated that it is actively pursuing these cases and collaborating with law enforcement to hold those involved accountable.

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

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

Check fraud is classified as a federal crime. Many banks, including Chase, permit customers to access part of their checks' value prior to the checks clearing.