In a recent wave of viral TikTok videos, a supposed "glitch" in Chase ATMs led many to believe they had discovered a way to obtain free cash. However, Chase Bank has clarified that these videos showcase a form of check fraud rather than a banking error. The deceptive practice involves depositing large checks and withdrawing smaller amounts before the checks clear, which constitutes criminal activity.
The videos, which spread rapidly across social media over the weekend, depicted individuals depositing checks for exorbitant sums into Chase ATMs and then withdrawing a portion of the funds. The participants in these videos believed they had uncovered a loophole in the bank's system, resulting in what they perceived as easy money.
Chase Bank has since addressed the situation, emphasizing that these actions are illegal. "Regardless of what you see online, depositing a fraudulent check and withdrawing the funds from your account is fraud, plain and simple," a Chase spokesperson stated. The bank has warned users against attempting similar schemes, clarifying that any funds obtained through these methods are considered stolen.
The fraudulent tactic exploits a banking standard that allows depositors to access a portion of their check's value before the check fully clears. This policy can give the illusion of free money to those who deposit checks for more than their account balance, only to withdraw and spend a portion before the check bounces. However, such actions are illegal and can lead to severe financial and legal repercussions.
Jim Wang, a financial educator, highlighted the dangers of participating in such schemes. In an Instagram post, he explained that those involved in the fraud are often met with negative account balances as banks rectify the situation. "Bank errors in your favor are almost never in your favor. In the case of this 'glitch,' it was just check fraud," Wang noted. He advised against spending or moving any of the illicitly obtained funds, urging individuals to report the matter to their bank immediately.
Chase Bank's response includes an ongoing review of the situation to assess how many customers were involved and the extent of the financial impact. While the bank has not disclosed whether regulators are investigating, it has made it clear that the issue has been resolved and that any attempts to exploit such glitches will be treated as fraud.
