JPMorgan initiates legal action against clients accused of misusing "infinite money glitch."

• JPMorgan Chase is now suing customers who allegedly misused a technical glitch to withdraw thousands of dollars from ATMs before a check bounced.
• On Monday, the bank filed lawsuits in at least three federal courts against individuals who took advantage of the "infinite money glitch" on TikTok.
• An unidentified accomplice deposited a counterfeit $335,000 check at an ATM in Houston, resulting in a man owing JPMorgan $290,939.47, according to the bank.

Customers who allegedly stole thousands of dollars from ATMs by taking advantage of a technical glitch are now being sued by the bank.

On Monday, the bank filed lawsuits in at least three federal courts against individuals who withdrew the highest amounts during the "infinite money glitch" that became popular on TikTok and other social media platforms in late August.

An unidentified accomplice deposited a counterfeit $335,000 check at an ATM in Houston, resulting in a man owing JPMorgan $290,939.47, according to the bank.

"A masked man deposited a check worth $335,000 into Defendant's Chase bank account on August 29, 2024, according to the bank's Texas filing. Following the deposit, Defendant withdrew the majority of the funds."

JPMorgan, the largest U.S. bank by assets, is currently investigating thousands of potential cases related to the "infinite money glitch," although the bank has not disclosed the extent of associated losses. Despite the decline in the use of paper checks as digital payment methods, they remain a significant source of fraud, resulting in $26.6 billion in global losses last year, according to Nasdaq's Global Financial Crime Report.

The glitch episode that allowed for infinite money withdrawals from Chase ATMs through bad check deposits was amplified by social media.

JPMorgan quickly closed a loophole that allowed it to only provide a fraction of the value of a check until it cleared, a practice that typically takes several days.

Miami and California

Other lawsuits filed Monday are in courts such as Miami and the Central District of California, and involve cases where JPMorgan claims customers owe the bank amounts ranging from approximately $80,000 to $141,000.

According to unnamed sources, most cases being examined by the bank involve smaller amounts.

JPMorgan claims that its security team contacted the suspected fraudster, but the bank has not been repaid for the fake checks, which violates the deposit agreement that customers sign when opening an account with the bank.

JPMorgan is demanding the return of the stolen funds, along with interest, overdraft fees, lawyers' fees, and punitive damages, as stated in the complaints.

Criminal cases?

According to sources, JPMorgan is likely to face a wave of litigation aimed at forcing customers to repay their debts and sending a message that the bank will not tolerate fraud. The bank prioritized cases with large dollar amounts and possible ties to organized crime, the sources said.

JPMorgan has separately referred civil cases to law enforcement officials across the country, while potential criminal investigations remain separate.

"Drew Pusateri, a spokesman for JPMorgan, stated in a CNBC interview that fraud is a crime that harms everyone and erodes trust in the banking system. He emphasized that JPMorgan is actively investigating these cases and collaborating with law enforcement to ensure that anyone found guilty of committing fraud against Chase and its customers is held responsible."