Online "Glitch" Videos Lead to Mass Bank Fraud
In a modern twist on an age old bank fraud scam, thousands of Chase Bank customers reportedly took advantage of a “system glitch” allowing an individual to deposit a check and then immediately withdraw the full funds in cash. However, the checks being deposited were written for thousands, sometimes tens of thousands, more than what could be covered in the customer’s account.
“Misleading or outright false claims on all sorts of topics have been popular in all decades, the only difference is the ease of this content spreading today and the unearned trust that is commonly extended to strangers posting videos online,” said Shawn Wilson, Union State Bank’s Chief Technology Officer. “We live in a world full of social media now where a short silly video can become a worldwide phenomenon almost instantaneously.”
Over the course of the Labor Day holiday weekend, several videos went viral across social media platforms such as Tik Tok, showing individuals taking advantage of the “glitch.”
“If it seems too good to be true, then it probably is, explained Union State Bank’s Chief Risk Officer Mike McWhirt. “The motivation for the person posting the Chase Bank glitch information was most likely to get clicks, cause harm to Chase, or both. Many times, fraudulent scams like these are designed to steal money from you or from someone else using you as the scapegoat.”
Chase Bank representatives were quick to respond through updating internal controls, freezing the accounts of those involved, and turning the “check-kiting” investigation over to the authorities for legal prosecution.
“The Chase incident represents misinformation that went viral resulting in a massive amount of fraudulent activity where most the individuals conducting it, didn’t have a true understanding that what they were doing was actually illegal. They thought they stumbled on a way to get access to “free” cash due to a bank error with no repercussions. With the prevalence of social media, this type of situation could happen to any financial institution, at any time, albeit at a more localized level for a community bank like ours,” said McWhirt.
Since the Chase Bank incident, new online content has surfaced targeting other financial institutions.
“USB invests in training our employees and our customers as much as we can. New threats and new risks come onto the scene every day though, so that job is never done. Internally, we develop procedures and adopt systems to help identify and combat fraud as these new risks come to light and externally, we try to educate our customers when we see misleading information circulating,” said Wilson.
If you have questions related to suspected fraud, contact your financial institution immediately.
“Whether it’s related to an email you get, a phone call you receive, a video you see online, or a stranger knocking on your door, ALWAYS take a moment to slow down and be ok with asking more questions. Our world is fast-paced, but any legitimate person or company will be more than willing to slow down and answer your questions,” said Wilson. “We are very happy to explain something strange or help you identify and avoid something false or misleading about finances that you may have seen online.”
About Union State Bank: Founded in 1908, Union State Bank has banking locations serving communities of Arkansas City, Newton, Udall, Winfield, and Wichita in Kansas and in Bartlesville and Edmond, Oklahoma. Union State Bank offers a full range of electronic, deposit and cash management services, as well as business and agriculture, commercial real estate, construction, mortgage, residential and consumer loans. Member FDIC. Equal Housing Lender, NMLS# 412388