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Chase Bank says it is aware of viral ‘glitch’ inviting people to commit check fraud

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4 months ago

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The Chase bank logo above ATMs, taken in Manhattan. 

Michael Kappeler | Picture Alliance | Getty Images

Chase Bank is urging its customers not to commit check fraud.

The bank’s plea comes after this weekend a viral trend took over TikTok and X, with users being told that there was a systemwide glitch and that, if they deposited false checks in an ATM and withdrew that money soon afterward, they would be able to cheat the system and take out a large sum of cash before the check bounced.

The only problem? This is not a “glitch” — it’s a check fraud scheme and those who participate will be on the hook for all the money they withdrew once the check bounces.

Although some on TikTok called the scheme a “glitch,” Chase reminded its customers that this “glitch” is actually an invitation to commit fraud. 

“We are aware of this incident, and it has been addressed,” a spokesperson for Chase said in a statement to NBC News. “Regardless of what you see online, depositing a fraudulent check and withdrawing the funds from your account is fraud, plain and simple.”

NBC News has not verified if anyone actually committed the crime as part of the viral trend. However, videos online purported to show people successfully withdrawing cash from an ATM after depositing a fraudulent check into their own bank account — before others quickly pointed out that what they were doing was a crime.

While conversation about the “glitch” has taken over TikTok, it appears the first mention of it was on X, when a user shared an excessive balance of more than $80,000 in his account on Thursday, according to meme database Know Your Meme. 

One video appeared to show lines forming outside of a Chase branch in New York suggesting people were flocking to the bank to “get free money.” Just as quickly as the trend took off, however, people were soon posting screenshots of massive negative balances and holds on their Chase accounts as a result of allegedly trying to withdraw the money. 

“I don’t know what these people think writing bad checks is, but I don’t know why they thought this was a glitch,” one TikTok user said. “Definitely don’t do it.” 

Fake check deposits are a common form of check fraud and are not new, although the chaos of this weekend saw many online discover the tactic for the first time — and mistaking it for a money hack.

Large checks deposited digitally are often placed on hold while the bank reviews their authenticity, but some ATMs allow customers to access a portion of the newly deposited funds immediately. This allows users to quickly withdraw the money before their check clears or bounces.

Fraudsters often approach this by opening bank accounts with fake identities, creating and depositing counterfeit checks from seemingly legitimate sources, then abandoning the account and leaving it with a negative balance.

Another common trick involves a scammer pretending that they sent a check for a greater amount than they meant to, hoping that the recipient is willing to deposit the check and transfer the excess money, which would ultimately leave the victim out of their own funds after the check bounces.

But in this case, people online seem to be simply committing check fraud against themselves — making it relatively easy for a bank to catch on and hold them accountable.

In the days after the Chase “glitch” gained traction, other TikTokers began dunking on those who had tried it, with some joking about waking up with enormous negative balances and others warning users that they had no chance of outsmarting the multinational banking institution.

“Chase Bank glitch? No, that’s called fraud,” one TikTok user said in a video that accrued more than 1 million likes in one day. “You went to the bank and took $50,000 that didn’t belong to you. That’s not a life hack, that’s called robbery. You’re going to jail. Prison actually.”

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ALL, WBA, DAL, WBD and more

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9 hours ago

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January 10, 2025

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If you are 60 years old, new 401(k) rules could save you money

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11 hours ago

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January 10, 2025

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Stock Trader’s Almanac editor-in-chief Jeffrey Hirsch gives his 2025 expectations for the stock market on ‘Making Money.’ 

They say you get better as you get older. This might just be true for 401(k) plans in 2025 for those striding into their golden years. Planning for retirement just got a significant boost for Americans aged 60 to 63, thanks to provisions in the SECURE Act 2.0.  

Beginning in 2025, individuals in this age group will be eligible for something called a “super catch-up” contribution limit for employer-sponsored retirement plans, including 401(k)s. This exciting change, recently clarified by the IRS, provides a unique opportunity to accelerate your retirement savings during those crucial pre-retirement years. 

The basics: Catch-up contributions 

Catch-up contributions allow individuals aged 50 and older to save extra money for retirement beyond the standard contribution limits. For 2024, the catch-up contribution limit was $7,500, on top of the $22,500 annual contribution cap for 401(k)s and similar plans. These additional contributions are designed to help older workers close any retirement savings gaps they may have accumulated over the years. 

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Introducing the super catch-up 

Under the SECURE Act 2.0, individuals aged 60, 61, 62, and 63 can contribute even more to their retirement accounts starting in 2025. The new “super catch-up” limit will be the greater of $10,000 or 150% of the regular catch-up contribution limit for the given year, adjusted annually for inflation. At 64, you go to the regular catch-up. 

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401(k)s just got a little better for those who are aged 60-63, thanks to new catch-up provisions. (Reuters)

For example, if the regular catch-up contribution in 2025 remains at $7,500, the super catch-up limit would increase to $11,250 (150% of $7,500). If the $10,000 floor is adjusted for inflation, it could rise even higher, allowing individuals to add substantially more to their retirement savings. 

Why is this important? 

This enhancement comes at a pivotal time for many individuals. Those in their early 60s often find themselves at the peak of their earning potential, with more disposable income available for saving. At the same time, they are rapidly approaching retirement and may feel pressure to bolster their nest eggs. The super catch-up offers a golden opportunity to bridge any shortfalls and strengthen their financial security. 

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Additionally, this provision aligns with the reality that many Americans are living longer. Increasing retirement savings can help ensure a more comfortable and secure retirement in the face of rising healthcare costs, inflation, and other financial challenges. 

Key considerations 

To take full advantage of the super catch-up, it’s essential to plan strategically: 

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  1. Evaluate Your Budget: Ensure you have the financial flexibility to maximize contributions. Cutting unnecessary expenses or reallocating resources may be necessary.
  2. Consult a Financial Advisor: Professional guidance can help optimize your savings strategy, factoring in tax implications and long-term goals. One good place to start is at Exit Wealth to learn more about this technique.
  3. Understand Tax Implications: Contributions to traditional 401(k)s are tax-deferred, reducing your taxable income now but subject to taxes during retirement withdrawals. Consider how this fits into your overall tax strategy and whether the regular 401(k) or the Roth 401(k) make more sense for your situation.
  4. Stay Informed: Keep an eye on annual IRS updates regarding contribution limits and inflation adjustments.

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The super catch-up offers a golden opportunity to bridge any shortfalls and strengthen their financial security. 

A new era of retirement savings 

The super catch-up contribution is a testament to the growing focus on enhancing retirement readiness for Americans. By leveraging this opportunity, individuals aged 60 to 63 can significantly boost their retirement savings, potentially lower their overall tax liability, and provide greater peace of mind as they transition into their golden years. 

If you’re approaching this age bracket, now is the time to review your retirement strategy and prepare to make the most of this exciting new provision. Retirement is a journey, and with the super catch-up, you can ensure yours is as secure and fulfilling as possible. 

Ted Jenkin is president of Exit Stage Left Advisors and partner at Exit Wealth.

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Insurance stocks sell off sharply as potential losses tied to LA wildfires increase

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12 hours ago

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January 10, 2025

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In this aerial view taken from a helicopter, the Kenneth fire (below) approaches homes while the back side of the Palisade fire (above) continues to burn Los Angeles county, California on January 9, 2025. 

Josh Edelson | Afp | Getty Images

Insurers exposed to the California homeowners’ market sold off sharply Friday as the devastation caused by the Los Angeles wildfires spread.

Shares of Allstate and Chubb both declined 4% in morning trading, while AIG and Travelers fell about 2% each. These four stocks were among the biggest losers in the S&P 500 Friday morning.

AllState, Chubb and Travelers are the most exposed carriers to insured losses in the wildfires, according to JPMorgan. The Wall Street firm noted that Chubb could have a particularly high exposure due to its high-net-worth focus in the region.

Shares of insurers drop Friday

The destructive fires this week could become the most costly in California history. The insured losses from this week’s fires may exceed $20 billion, and the estimate could be even higher if fires spread, the JPMorgan estimated Thursday. Those losses would far surpass the $12.5 billion in insured damages from the 2018 Camp Fire, which was the costliest blaze in the nation’s history, according to data from Aon.

Moody’s Ratings expected insured losses to run well into billions of dollars given the area’s high values of homes and businesses in the affected areas.

The Palisades Fire is the largest of the five blazes. It has burned more than 17,000 acres, destroying over 1,000 structures, according to California authorities. Pacific Palisades is an affluent area where the median home price is more than $3 million, according to JPMorgan.

Insurance companies have asked Southern California Edison to preserve evidence related to the devastating wildfires that have swept Los Angeles, according to a company filing to regulators.

Certain reinsurers were also affected. Arch Capital Group and RenaissanceRe Holdings declined 2% and 1.5% Friday, respectively. JPMorgan believes that rising loss estimates increase the likelihood of reinsurance attachments at various insurers being breached.

— CNBC’s Spencer Kimball contributed reporting.

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