JPMorgan Chase is intensifying efforts to recover money lost to a viral banking loophole, taking legal action against customers who allegedly took advantage of the so-called " infinite money glitch" that spread across TikTok and other social platforms last August.
Unlike the initial round of federal lawsuits filed in October 2024—where the bank successfully recouped about $580,000 of the $660,000 it sought—this new batch of cases is being filed in state courts. The reason? The alleged thefts are smaller in scale, often under $75,000, but no less deliberate.
These lawsuits are not about accidental overdrafts or confused customers. They involve individuals who, according to the bank, used fake cheques and withdrew large sums of cash before the system could flag the fraud. It’s old-school cheque kiting, supercharged by ATM glitches and social media hype.
What the bank says happened
In one case filed this week in Gwinnett County, Georgia—seen by CNBC—JPMorgan laid out its accusation in black and white, “On August 29, 2024, a masked man deposited a check in Defendant’s Chase bank account in the amount of $73,000.00.”
Six days later, the cheque bounced. But not before $82,500 had already been withdrawn in cash from two different Chase branches. According to the lawsuit, the customer—whose name CNBC is withholding—now owes the bank $57,847.69 and has ignored requests to return the funds.
And this isn’t an isolated incident. JPMorgan is preparing additional lawsuits in Miami, the Bronx, and two Texas counties. It’s a national sweep for a digital-era fraud.
“We’re still investigating cases of fraud and cooperating with law enforcement — and we’ll do that for as long as it takes to hold fraudsters accountable,” said Drew Pusateri, a spokesperson for JPMorgan Chase.
A viral glitch that cost millions
The scheme first gained attention in late August 2024, when TikTok users posted videos detailing how Chase ATMs were temporarily allowing customers to deposit fake cheques and withdraw cash before the cheque bounced. The delay in flagging the cheque as fraudulent created a window—often just a few days—during which large sums could be siphoned off.
The practice is illegal. It’s known as cheque kiting and carries serious penalties. In New York, for instance, the crime can carry a prison sentence of up to 25 years, according to attorney Adam H. Rosenblum.
“Very often, these consequences can be mitigated and minimised if things are handled in the right way,” Rosenblum told Fortune. That includes returning the funds and cooperating with legal counsel.
Still, the temptation proved too great for many. JPMorgan says it has examined thousands of such cases and is now pursuing those involving the largest amounts or the clearest patterns of fraud. Since October 2024, the bank has sent repayment letters to more than 1,000 customers, with some voluntarily returning the money after media coverage brought the crackdown into public view.
Bankruptcy as a shield? JPMorgan pushes back
The bank is also challenging efforts by some accused fraudsters to erase their debts through bankruptcy.
In a recent motion filed in Grand Rapids, Michigan, JPMorgan asked a judge for more time to object to a bankruptcy claim by a customer who allegedly deposited a $44,779.46 fraudulent cheque and immediately made multiple cash withdrawals and Cash App transfers.
“There are genuine and important reasons people use bankruptcy protections,” said Pusateri. “Getting rid of debts you accumulated through fraud isn’t one of them.”
This shows JPMorgan’s approach goes beyond just civil courtrooms. It is also preparing to confront bankruptcy cases it believes are being misused to escape accountability.
Lessons from the viral glitch
What makes this saga remarkable is how quickly a decades-old fraud technique went viral in a new format. Digital videos, not underground scams, spread the word.
And it wasn’t just in the United States. In a similar case in August 2023, Bank of Ireland customers exploited a technical error that allowed them to transfer or withdraw money far beyond their actual balance. In both countries, banks issued stern warnings that withdrawals made due to system glitches must be repaid—or else.
Despite the increasing use of digital wallets and instant transfers, cheque-based systems remain vulnerable. JPMorgan, in an October filing, underlined its position:
“Chase takes its responsibility to combat fraud seriously and prioritises protecting the firm and its customers to make the banking system safer. Part of that responsibility is to hold people accountable when they commit fraud against Chase and its customers. Simply put, engaging in bank fraud is a crime.”
The message from JPMorgan is clear. The sums may be smaller than the earlier cases, but the bank is not letting them slide.
This isn’t about a glitch anymore. It’s about trust, accountability, and deterring the idea that there’s ever such a thing as “free money” when it comes to fraud.
And for anyone watching those viral videos and still thinking about testing the system?
They might want to think again.
Unlike the initial round of federal lawsuits filed in October 2024—where the bank successfully recouped about $580,000 of the $660,000 it sought—this new batch of cases is being filed in state courts. The reason? The alleged thefts are smaller in scale, often under $75,000, but no less deliberate.
These lawsuits are not about accidental overdrafts or confused customers. They involve individuals who, according to the bank, used fake cheques and withdrew large sums of cash before the system could flag the fraud. It’s old-school cheque kiting, supercharged by ATM glitches and social media hype.
What the bank says happened
In one case filed this week in Gwinnett County, Georgia—seen by CNBC—JPMorgan laid out its accusation in black and white, “On August 29, 2024, a masked man deposited a check in Defendant’s Chase bank account in the amount of $73,000.00.”
Six days later, the cheque bounced. But not before $82,500 had already been withdrawn in cash from two different Chase branches. According to the lawsuit, the customer—whose name CNBC is withholding—now owes the bank $57,847.69 and has ignored requests to return the funds.
And this isn’t an isolated incident. JPMorgan is preparing additional lawsuits in Miami, the Bronx, and two Texas counties. It’s a national sweep for a digital-era fraud.
“We’re still investigating cases of fraud and cooperating with law enforcement — and we’ll do that for as long as it takes to hold fraudsters accountable,” said Drew Pusateri, a spokesperson for JPMorgan Chase.
A viral glitch that cost millions
The scheme first gained attention in late August 2024, when TikTok users posted videos detailing how Chase ATMs were temporarily allowing customers to deposit fake cheques and withdraw cash before the cheque bounced. The delay in flagging the cheque as fraudulent created a window—often just a few days—during which large sums could be siphoned off.
The practice is illegal. It’s known as cheque kiting and carries serious penalties. In New York, for instance, the crime can carry a prison sentence of up to 25 years, according to attorney Adam H. Rosenblum.
“Very often, these consequences can be mitigated and minimised if things are handled in the right way,” Rosenblum told Fortune. That includes returning the funds and cooperating with legal counsel.
Still, the temptation proved too great for many. JPMorgan says it has examined thousands of such cases and is now pursuing those involving the largest amounts or the clearest patterns of fraud. Since October 2024, the bank has sent repayment letters to more than 1,000 customers, with some voluntarily returning the money after media coverage brought the crackdown into public view.
Bankruptcy as a shield? JPMorgan pushes back
The bank is also challenging efforts by some accused fraudsters to erase their debts through bankruptcy.
In a recent motion filed in Grand Rapids, Michigan, JPMorgan asked a judge for more time to object to a bankruptcy claim by a customer who allegedly deposited a $44,779.46 fraudulent cheque and immediately made multiple cash withdrawals and Cash App transfers.
“There are genuine and important reasons people use bankruptcy protections,” said Pusateri. “Getting rid of debts you accumulated through fraud isn’t one of them.”
This shows JPMorgan’s approach goes beyond just civil courtrooms. It is also preparing to confront bankruptcy cases it believes are being misused to escape accountability.
Lessons from the viral glitch
What makes this saga remarkable is how quickly a decades-old fraud technique went viral in a new format. Digital videos, not underground scams, spread the word.
And it wasn’t just in the United States. In a similar case in August 2023, Bank of Ireland customers exploited a technical error that allowed them to transfer or withdraw money far beyond their actual balance. In both countries, banks issued stern warnings that withdrawals made due to system glitches must be repaid—or else.
Despite the increasing use of digital wallets and instant transfers, cheque-based systems remain vulnerable. JPMorgan, in an October filing, underlined its position:
“Chase takes its responsibility to combat fraud seriously and prioritises protecting the firm and its customers to make the banking system safer. Part of that responsibility is to hold people accountable when they commit fraud against Chase and its customers. Simply put, engaging in bank fraud is a crime.”
The message from JPMorgan is clear. The sums may be smaller than the earlier cases, but the bank is not letting them slide.
This isn’t about a glitch anymore. It’s about trust, accountability, and deterring the idea that there’s ever such a thing as “free money” when it comes to fraud.
And for anyone watching those viral videos and still thinking about testing the system?
They might want to think again.
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