JPMorgan Chase is escalating its legal fight against customers accused of exploiting a notorious banking glitch last year. The so-called “infinite money glitch,” which went viral on social media, allowed users to withdraw funds from fraudulent checks before they bounced. Initially, Chase focused its lawsuits on those who allegedly stole larger sums, filing in federal courts. Now, however, the bank is expanding its legal action to include customers accused of smaller-scale theft, filing lawsuits in state courts across several states, including Georgia, Florida, New York, and Texas. These lawsuits target individuals who allegedly stole less than $75,000, a shift in strategy reflecting the bank’s determination to recover all misappropriated funds.
In addition to the lawsuits, Chase has sent demand letters to over 1,000 customers since October, urging them to return the money. Some customers reportedly complied after CNBC’s earlier reporting on the bank’s pursuit of individuals involved in the largest thefts. This multi-pronged approach demonstrates Chase’s commitment to reclaiming stolen funds and deterring future fraudulent activity. The bank emphasizes that these legal actions are separate from any potential criminal investigations being conducted by state and federal law enforcement agencies.
The bank is also actively contesting bankruptcy filings by some of the accused. Chase argues that individuals who used the glitch to defraud the bank should not be able to discharge their debts through bankruptcy proceedings. This highlights a broader struggle between the bank’s efforts to recover losses and the legal protections afforded to those facing financial hardship. The bank’s spokesman, Drew Pusateri, stated that while bankruptcy protections serve a legitimate purpose, they should not shield those who engaged in fraudulent activities.
The ongoing legal battles surrounding the “infinite money glitch” serve as a stark reminder of the challenges financial institutions face in combating sophisticated forms of fraud in the digital age. The case underscores the lengths to which banks will go to protect their assets and the ongoing complexities of navigating both civil and criminal legal processes in recovering stolen funds.
