Why it matters: JPMorgan Chase has filed multiple federal lawsuits against customers who exploited a technical vulnerability in their ATM system, known as the “infinite money glitch,” which allowed individuals to withdraw cash from counterfeit check deposits before verification. This incident highlights the ongoing challenge banks face in balancing convenience with security.
The Scheme: The exploitation gained widespread attention through social media platforms during the summer of 2024, with users demonstrating how to withdraw funds from deposited fake checks before they bounced.
- Individual withdrawals reached up to $290,000
- Total damages sought exceed $661,000
Legal Response: CNBC reports that the bank has initiated lawsuits in federal courts across Houston, Los Angeles, and Miami, targeting customers who withdrew the largest amounts. These cases represent just the first wave in JPMorgan’s broader investigation into thousands of potential fraud cases.
- Four initial federal lawsuits were filed
- Bank seeking repayment plus damages (CBS)
Broader Impact: This incident occurs against the backdrop of rising check fraud, which costs U.S. banks approximately $26.6 billion annually. JPMorgan has since patched the vulnerability but continues to investigate additional cases.
- Bank closed loophole within days of discovery
- Thousands of cases under investigation