JPMorgan sues customers it says took advantage of "infinite money" glitch
JPMorgan is suing customers it alleges took advantage of a technical glitch to steal thousands of dollars from the bank at ATMs.
The loophole, called the "infinite money glitch" by social media users who became aware of it in August, let customers deposit counterfeit checks for large amounts of money and then withdraw the funds before the bank could verify they were bogus.
Social media videos celebrating people withdrawing ill-gotten funds heightened awareness of the loophole. The bank patched the bug days later and launched an investigation into the incident.
The bank on Monday filed lawsuits in multiple federal courts against people it says withdrew the greatest sums of money.
Check fraud losses in U.S.
"Fraud is a crime that impacts everyone and undermines trust in the banking system. We're pursuing these cases and actively cooperating with law enforcement to make sure if someone is committing fraud against Chase and its customers, they're held accountable," a JPMorgan spokesperson said in a statement to CBS MoneyWatch.
In a suit filed Monday in the Southern District of Texas, JPMorgan alleges that in August, a "masked man" deposited a counterfeit check for $335,000 into a defendant's bank account at an ATM. He then withdrew the vast majority of the funds, before the check was returned as counterfeit. The bank alleges the defendant owes Chase $290,939.47
Check fraud results in roughly $26.6 billion in losses annually, according to Nasdaq's Global Financial Crime Report. In 2023, 80% of such fraud took place in the Americas, according to the report.
JP Morgan filed additional lawsuits in Miami and the Central District of California Monday. Chase alleges a defendant in California deposited two fraudulent checks totaling $116,063.55, and "began transferring substantial amounts of those ill-gotten funds out of his account."
The checks were eventually returned, resulting in a substantial negative balance to the defendant's account. Chase alleges he owes the bank $90,794.02 and has failed to pay the amount of overdraft plus applicable fees.
JPMorgan seeks the return of the stolen funds with interest and overdraft fees, plus lawyers' fees. In some cases, it is also seeking punitive damages, according to the complaints.
