Yes, the Chase Bank ATM 'glitch' is real - and exploiting it is also check fraud

HUNTSVILLE, Ala. — Social media timelines lit up over the weekend with images of gleeful Chase Bank customers running to ATMs, debit cards and checks in hand, then walking or running away throwing cash into the air - cash that apparently wasn't theirs to withdraw.

Financial experts are warning that this supposed exploitation of the system only amounts to check fraud - and those who participated in it are learning quickly how severe the drawbacks can be.

THE QUESTION

Is the Chase Bank hack seen on social media real?

OUR SOURCES

Chase Bank

Austen Allred, CEO of the Bloom Institute of Technology

Consumer financial group Experian

SQN Banking Systems

THE ANSWER

Yes, an exploit was found which allowed customers to withdraw cash from ATMs operated by Chase Bank using bad checks. 

Yes, it is check fraud.

WHAT WE FOUND

The most common definition of 'check fraud,' as explained by Louis DeNicola with Experian, is "when someone knowingly writes a bad check—a check for more than the amount they have in their account."

That is precisely what the people seen in many of these viral videos allegedly do in order to claim money from the machines - they write a check for a large amount, deposit it into the ATM, and then make an immediate withdrawal for the amount written.

Depending on the banking institution, a customer's access to the full amount written on a deposited check can vary. It could be immediate and full, or it could be partial and subject to a holding period.

Though Chase has not explicitly explained what glitch happened, it likely involves the immediate availability of funds written on the deposited checks.

"We are aware of this incident, and it has been addressed," a company spokesperson told The New York Post. They also added, "depositing a fraudulent check and withdrawing the funds from your account is fraud, plain and simple."

"Literally just committing check fraud," echoed Austin Allred on X, formerly Twitter, in commenting about the incident. "It seems like for every type of fraud that exists there's a TikTok influencer who just discovered it and thinks it's foolproof."

People who had reportedly taken advantage of the money melee are now seeing deductions on their accounts - along with account locks and holds on any further deposits.

What's yet unknown is what may happen to the people who took part in exploiting the 'glitch.' Penalties for the crime can range from fines to jail terms - depending on the charges brought forward.