Viral Chase ATM ‘Glitch’ Highlights Common Bank Fraud Scheme

Can you get free, fast and easy money from your bank? Despite what people on social media may tell you, this promise comes with a hefty price.

Over the weekend, people on TikTok and X seemingly took advantage of a systemwide “glitch” that was allowing customers at some Chase ATM machines to deposit checks they wrote for bigger amounts than the balance in their bank account, and then withdrew the money immediately before the check bounced.

Only this wasn’t a glitch. Kimberly Palmer, personal finance expert at NerdWallet, said the viral Chase trend “is a common form of check fraud and is illegal.” And you can face major consequences for doing it.

“If you unknowingly deposit a fraudulent check and then withdraw money, you could be on the hook for that missing money,” she said.

In a statement to HuffPost on Thursday, Chase said it was “aware of this incident, and it has been addressed. Regardless of what you see online, depositing a fraudulent check and withdrawing the funds from your account is fraud, plain and simple.”

And it’s true: Just because the check has “cleared” does not mean you will get away with keeping the funds made available in your account.

Some ATMs do allow customers to access a portion of deposited funds immediately “if you’re a good customer” with the bank, said Uziel Gomez, a certified financial planner and former bank teller. By law, banks in the U.S. make the first $225 from the deposit available for cash withdrawal by the next business day.

But a few days later, the bank will verify that the account does not have the funds that the check was written out for. “Now the person is liable for the amount they withdrew,” Gomez said.

So if you successfully got money because of this situation? “Return the funds immediately to prevent fees or penalties from the bank or even charges of bank fraud,” said accredited financial counselor Willa Williams.

It’s important to note that it’s unclear how many people actually deposited fraudulent checks as a result of the viral incident. When asked by HuffPost, the bank declined to share numbers on how many customers participated in this scheme, or the consequences for people who did cash fake checks. But this likely will not be the last time you hear about a check fraud scheme.

The Chase viral trend got promptly shut down by the bank, but this will not be the last time you hear about a check fraud scheme. Banks reported about 680,000 instances of check fraud in 2022, nearly double what they reported in 2021.

Beyond this recent social media scam, “check-kiting” is another type of common check fraud scam where there is nothing but air to support your loan. Under this scheme, people write fake checks between two or more different bank accounts and take advantage of the days that it can take banks to clear those checks, in order to inflate funds in their accounts.

If the bank is able to determine that you intended to commit check fraud, “they can either freeze your account, close it out. Depending on the offense, it could become a criminal offense,” Gomez said.

Legal penalties for check-fraud schemes can range from fines to incarceration, depending on your state and your crime.

But oftentimes, people are not the perpetrators of check fraud, but the victims. Gomez said when he worked as a bank teller, he most commonly saw incidents of people trying to deposit checks they did not know were fraudulent.

Fake checks can take weeks for banks to flag, but you’ll still be on the hook when they do. Your best bet to avoid a fake check? “Don’t rely on money from a check unless you know and trust the person you’re dealing with,” the Federal Trade Commission states on its website.

Sometimes bank errors do happen, and you can get a mysterious amount of money deposited into your account as a result, but do not expect to keep that unexpected windfall.

In these cases, “let your bank know what happened, especially if you think you have been the victim of a fraud,” Palmer advised. “The bank may suggest closing down your current bank account and opening up a new one with new numbers, particularly if your account was compromised in any way.”

One big takeaway from the bank “glitch”? Don’t trust viral get-rich-quick schemes on social media.

In a 2023 survey of 1,000 U.S. Millennial and Gen Z adults, 79% said they got their financial advice from social media ― but 1 in 4 said they have lost money as a direct result of a social media finance tip.

“You want to be careful of who you’re following” on social media, Gomez said. “There’s no such thing as making fast and easy money.”

Just as quickly as news of a glitch spread on social media, came the trend of people posting negative balances on Chase accounts.

“This Chase glitch shit, don’t do this shit man,” said one person who claimed to have participated in the trend. His account showed a negative balance of $10,997.58.

“If something seems unethical, illegal, or too good to be true, it probably is,” Palmer said.