Over the weekend, a so-called “Chase Bank glitch” went viral—but it wasn’t a glitch so much as good, old-fashioned check fraud.
Trending TikTok videos had some people believing they could get “free” cash from Chase ATMs by writing fraudulent personal checks to their own accounts and withdrawing the “deposited” money before the checks cleared. Chase has since issued a response to the trend, warning customers that you cannot, in fact, exploit a standard banking system delay to withdraw more money than you actually have in your account.
It’s another example of a fact that I’ll repeat forever: TikTok is a never-ending stream of bad financial advice. Here’s the background on how the “glitch” worked, and what you can do to avoid getting caught up in these kinds of scams.
What was the Chase Bank glitch?
This past weekend, I was glued to TikTok (more so than usual), watching people openly commit check fraud under the guise of exploiting a banking “bug” or “glitch” that was really just an example of a standard banking practice that grants check depositors access to a portion of their money before the full total of the check clears.
In the case of this weekend’s debacle, people posted videos of themselves writing checks for obscene amounts of money, depositing them to their own accounts, and then withdrawing as much as they could before the check could bounce.
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Chase said in a statement that they have since fixed the system delay and warned that the trend was in fact an example of simple check fraud, “Regardless of what you see online,” Chase’s statement reads, “depositing a fraudulent check and withdrawing the funds from your account is fraud, plain and simple.”
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People who took advantage of the delay to get out cash don’t get to keep the money free and clear. Many have since seen their accounts locked and showing negative balances. As the money was obtained fraudulently, the bank will expect it back—and keeping it would be a crime.
How to spot bad financial advice on TikTok
Sure, you might not have fallen for the latest viral version of check fraud. But there’s a scam out there for everyone, and it pays to be able to spot them. As I’ve previously urged, before you follow a social influencer’s financial advice, ask yourself these three questions about the advice-giver.
What are their credentials? There is no fiduciary standard to becoming a “guru.” Check for certifications qualifications like a CPA (certified public accountant) or RIA (registered investment adviser). If they were born into wealth and have a history of trying to be an influencer in one way or another, be skeptical of their tips and tricks.
Is this too good to be true? Generally, avoid “get rich quick” investment advice. Because if it were actually true, why would this person be sharing it with millions of people? If you can’t run it buy a financial advisor, at the very least, do your own research before trusting an Instagram infographic touting an effective investment strategy.
Is this person trying to sell you something? This is the most import thing to consider before taking someone’s financial advice. Be wary of buying certain products or stocks, especially when the person recommending them is a stranger on the other end of a TikTok account. At the end of the day, no stranger is looking out for your finances out of the goodness of their heart if they can make a buck buy selling you something.second video.
