Chase Bank Alerts Customers to Fraud Following ATM Glitch Videos
Chase Bank has issued a warning to its customers following the circulation of viral videos on social media platforms, which showed individuals exploiting a perceived loophole in the bank's system. The bank has stated that these individuals were likely engaging in fraudulent activities.
Exploitation of ATM Glitch
During the Labor Day weekend, several videos were posted on TikTok and other social media platforms, showing people depositing fraudulent checks of large amounts at Chase Bank ATMs. These individuals would then withdraw a significant sum, under the impression that they had found a glitch allowing them to obtain free money.
However, a representative from Chase Bank clarified that these individuals were likely committing fraud and that the issue has been resolved. The bank also cautioned its customers against replicating the actions seen in the videos.
Bank's Response to the Incident
"We are aware of this incident, and it has been addressed," a Chase spokesperson stated in an email to The Epoch Times. "Regardless of what you see online, depositing a fraudulent check and withdrawing the funds from your account is fraud, plain and simple," the spokesperson further added.
The bank did not comment on whether it is investigating the videos or if law enforcement is involved. It remains unclear how many Chase customers attempted to make such withdrawals.
Understanding Check Kiting
In response to the videos depicting the alleged fraudulent activity, Dan Awrey, a law professor at Cornell University, wrote, "Check kiting. It’s called check kiting. And it’s been around since the invention of ... checks."
Check kiting, a type of check fraud, involves a person attempting to cover a bad check from one bank account to another. This is possible for individuals with multiple accounts due to the time it takes to process checks.
According to a Department of Justice research paper, "Banks will usually resolve issues of check swapping, or the exchange of checks between two bank accounts, without prosecuting the kiters. When the scheme involves payment to a third party, however, banks must prosecute."
Guidance from Financial Experts
Jim Wang, a financial educator and the owner of WalletHacks.com, warned in several social media posts that individuals attempting to defraud the bank could have their accounts frozen.
Wang explained that those involved in this activity were noticing significant deficits in their accounts or large negative balances. He stressed that bank errors are seldom in your favor and in this case, it was simply check fraud.
He advised that if a large amount of money unexpectedly appears in someone's account, they should immediately inform their bank. "Just because money appears in your account, doesn’t mean it’s literally yours," Wang stated. "If you spend it and are forced to pay it back, you’re going to have to figure out a way to pay it back."
According to SQN Banking Systems, a fraud protection company, check fraud can be a felony crime under certain circumstances. If the fraudulent amount exceeds $500, it is more likely to be considered a felony rather than a misdemeanor. Misdemeanor charges can result in fines and up to a year in jail, while felony fraud charges can lead to several years in prison and hefty fines.
SQN also noted that Chase Bank or any other victim can seek civil compensation from the individual who committed fraud, with the claimable amount varying from state to state.
Bottom Line
This incident serves as a reminder of the importance of understanding the legal implications of financial transactions. It also highlights the potential risks of following viral trends without fully comprehending the consequences. What are your thoughts on this incident? Do you think the bank's response was appropriate? Share this article with your friends and let us know your thoughts. Don't forget to sign up for the Daily Briefing, which is available every day at 6pm.
