On Monday, JPMorgan Chase filed four civil lawsuits against people who allegedly engaged in check fraud, apparently in connection with a a series of TikTok videos bank customers made about a supposed “glitch” that let them steal money from its ATMs. The defendants owe the bank between $90,000 and $300,000, according to the lawsuits.
Each of the people the bank sued allegedly deposited at least one fraudulent check at a Chase ATM, then withdrew or transferred most or all of the money. After each bank that supposedly issued the checks rejected them as counterfeits, Chase adjusted the customers’ balances to be negative and levied overdraft and related fees.
JPMorgan Chase alleges each of the four people accused have failed to pay the fees, thereby violating the contract Chase customers sign with the bank when opening depository accounts.
The lawsuits come after a TikTok trend in early September depicted JPMorgan Chase customers writing and depositing bad checks at ATMs, then withdrawing cash or making transfers before the bank could bounce the checks.
The trend is not mentioned in the lawsuit, but the dates on which the defendants deposited forged checks match the trend’s growth, as do other facts of the case — particularly, depositing bad checks at Chase ATMs.
While the lawsuits do not specifically accuse any customers of any criminal offenses, the bank did mention fraud in the preamble to each complaint, and a spokesperson for JPMorgan Chase previously said the bank would refer to law enforcement cases related to the TikTok trend “as appropriate,” suggesting that the civil lawsuits might foreshadow upcoming criminal prosecutions.
“Fraud is a crime that impacts everyone and undermines trust in the banking system,” reads each of the four lawsuits. “Chase takes its responsibility to combat fraud seriously and prioritizes 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.”
According to one of the lawsuits, filed in U.S. District Court in the Southern District of Texas, a masked man deposited a $335,000 check in the defendant’s Chase bank account on August 29, and the defendant began withdrawing “the vast majority of the ill-gotten funds in short succession,” the next day.
The bank that supposedly issued the check rejected it as counterfeit six days later, on September 4, so Chase adjusted the customer’s account to have a negative balance. To date, the defendant owes Chase $290,939.47 and has not responded to the bank’s attempts to contact him, according to the lawsuit. Chase is seeking these funds, interest on the amount, and attorney’s fees.
When a customer deposits a check at any U.S. bank, the first $225 must generally be available to them the business day after they make the deposit,
In each of the four cases Chase cited in its lawsuits, the bank apparently made large amounts of the checks available to customers within one business day. In the Texas case and one other, Chase apparently made the funds available the business day after the fraudulent check was deposited.