Recently, a dangerous TikTok trend went viral, encouraging users to exploit what was dubbed a “glitch” in JPMorgan Chase’s check processing systems. According to the videos, participants believed they could deposit checks and withdraw money from Chase ATMs without repercussions. This scheme, however, wasn’t a glitch—it was check-kiting, a serious form of bank fraud.
This incident serves as an important reminder: Never blindly trust what you see online, especially when it promises something that seems too good to be true. Let’s dive into what happened, why check-kiting is illegal, and the real-world consequences of following such misguided advice.
The Viral Trend: Explained
On TikTok, videos started circulating claiming that customers could withdraw “free” money from Chase ATMs by depositing checks that weren’t backed by sufficient funds. The belief was that Chase’s check processing system had a flaw, allowing individuals to withdraw cash before the check bounced or was flagged as bad. The videos went viral, luring unwitting participants into committing a crime without realizing the consequences.
As Chase and multiple media outlets have clarified, there was no glitch—this was an exploitation of the float period. The “float” is the time it takes for a bank to process a check and transfer funds from one account to another. Check-kiting occurs when someone deposits a check, knowing it lacks sufficient funds, and quickly withdraws money before the check is processed. Once the check bounces, the account holder is responsible for returning the withdrawn amount, but in this case, many believed they had found a loophole.
Why Check-Kiting is a Crime
Check-kiting is illegal because it involves fraudulent activity. Essentially, individuals are adding non-existent funds into their accounts, with the intent of withdrawing money before the bank realizes the check has bounced. The scammer can use the non-existent funds to make withdrawals or purchases. This practice creates false balances and can lead to significant losses for banks, disrupting financial systems.
- How it Works: A person deposits a check into their account, knowing the check doesn’t have sufficient funds. Before the bank has time to process the check, they withdraw money based on the artificially inflated account balance.
- Why It’s Fraud: This practice exploits the time delay in banking processes, giving the illusion of available funds when there aren’t any. Once the bank realizes the check is bad, the individual is responsible for repaying the money. If not repaid, it leads to legal action.
- Consequences: Committing check-kiting can result in penalties, including hefty fines, prison time, and permanent damage to your banking reputation. Banks may also close your account and flag your name, making it difficult to open future accounts.
- Prevention Measures: To combat check-kiting and protect themselves from fraud, banks often place holds on checks before allowing funds to be withdrawn. This delay ensures that the check has been properly cleared and the funds are legitimate. Additionally, sophisticated fraud detection systems are in place to monitor for suspicious patterns of activity, such as large deposits followed by rapid withdrawals. While these measures may seem inconvenient, they are designed to safeguard both the bank and customers from fraudulent schemes like check-kiting.
Banks have security systems in place to detect check-kiting, and those caught can face legal consequences, including charges of fraud. Many participants, unaware they were engaging in fraud, are now facing legal scrutiny for their actions.
Lessons Learned: The Dangers of Online Misinformation
This situation highlights the dangers of misinformation on social media platforms. What started as a viral trend ended in criminal activity for many who believed they were simply taking advantage of a bank glitch. The broader lesson is that not everything you see online is true, and some advice can lead you into serious trouble.
Here are a few key takeaways:
- Do Your Research: Never trust a financial tip or trend without thoroughly researching it. If something promises easy money or a quick fix, it’s probably a scam.
- Understand Financial Crimes: Fraud, such as check-kiting, can have serious consequences, including fines, criminal charges, and damaged credit. If you don’t understand a financial practice, seek advice from legitimate sources, not social media.
- Too Good to Be True: If something sounds too good to be true, it almost always is. Banks operate under strict regulations, and any “glitch” that lets you withdraw or access free money is likely illegal.
- Be Wary of Viral Trends: Just because something goes viral doesn’t make it legitimate. Online trends can be filled with misinformation that can cause harm, even if it seems innocent at first.
Protect Yourself from Misinformation
The viral check-kiting trend is a stark reminder of the dangers of trusting information blindly, especially from social media. Financial crimes can have long-lasting consequences, even for those who didn’t realize they were committing fraud. Always approach online advice with caution and remember to research thoroughly before engaging in any financial activity.
If something seems too good to be true, it probably is.
