When Fraud Goes Viral: A New Challenge for Banks

A recent trend on TikTok is keeping many fraud executives up at night. It involves bank customers attempting to exploit funds availability policies at ATMs, bringing attention to how social media can facilitate the spread of financial misinformation and spur fraudulent activities. 

The scheme works as follows: Customers of the bank deposit checks written on their own accounts for large amounts at ATMs and immediately withdraw the funds, otherwise known as ‘to me from me’ checks. Participants believe they’re merely taking advantage of a loophole in the funds availability policy. Some users present this activity as a hack or glitch, but it is a form of check fraud. It exploits the standard banking practice of making a portion of deposited funds available before checks fully clear and taking funds that are not legitimately theirs to take.  

Not only have these ‘misinformed’ been engaging in this type of fraud attack against their institutions, but they have also been sharing their experiences on TikTok.  

This viral trend poses risks to financial institutions and consumers who may not understand the legal implications of their actions. Participants could face consequences including criminal charges, negative impacts on their credit scores, and difficulty opening bank accounts in the future. Moreover, the proliferation of these videos on TikTok underscores several key points about the current interplay between financial information and technology: 

• Social media may be playing an increasingly significant role in amplifying financial misinformation, allowing what might have been a localized issue to reach a worldwide audience quickly.  
• Tech platforms are faced with growing content moderation challenges, with questions about how social media companies should handle content that could lead to harmful financial behavior.  
• Financial institutions may need to expand monitoring efforts, considering social media trends as part of their fraud prevention control frameworks and ongoing monitoring strategies. 

The Viral Nature of the Threat 

What sets this fraud apart is its rapid spread through social media. Unlike traditional fraud schemes that might take weeks or months to gain traction, the promotion of this TikTok scheme may have reached tens of millions of potential participants on various social media platforms within hours. The videos showing this alleged hack quickly went viral, with people sharing the posts and attempting to replicate the fraudulent activity. The trend spawned a variety of reactions across social media platforms.  

On TikTok, one video viewed over 100,000 times showed a young woman telling her mother she could exploit the ‘glitch’ to withdraw up to US$50,000 from her Chase account. A young rapper capitalized on the trend to promote his song “Chase It,” later clarifying he wasn’t endorsing fraud but merely seeking publicity.¹ 

While this trend presents new challenges, it shares key characteristics with established fraud types, particularly ‘card cracking.’ Both schemes exploit the gap between funds availability and check clearing. However, the TikTok trend differs in that individuals attempt to carry out the fraud themselves rather than being recruited by a third party. 

Viral trends of fraud impact an institution faster and with much greater amplification in terms of volume than traditional orchestrated attacks. The speed at which misinformation about financial ‘loopholes’ can spread on social media platforms necessitates a more proactive strategic approach to fraud prevention. Banks should now consider monitoring social media platforms to anticipate and prepare for trends that could explode in popularity overnight. Viral trends such as this can also inform the fraud community of potential gaps that may be exploited.   

Moving Forward 

As bank fraud executives combat this emerging fraud trend, they should consider how they will address future viral trends when they arise. Robust fraud detection systems capable of identifying unusual deposits and withdrawals are needed. Clear communication with customers about check processing and the consequences of attempted fraud is crucial. Banks may also want to consider incorporating social media monitoring into their fraud prevention efforts. 

The following are specific actions that bank fraud executives should consider: 

• Maintain a funds availability risk engine that is Reg CC compliant 
• Adopt robust, real-time fraud detection systems that can identify unusual patterns of deposits and withdrawals within a short period across their footprints. 
• Monitor social media platforms for emerging financial ‘hacks’ or ‘glitches.’ Quickly respond to trends on social media platforms and educate customers that the activity is fraudulent.  
• Prepare for rapid, widespread attempts of fraud driven by social media trends.

This specific trend also highlights the importance for banks to adapt to emerging threats in the digital age. There are several key action items for FIs: 

• Review and adjust funds availability policies as appropriate. However, take caution when making adjustments, especially in the absence of a means of automating holds and funds availability schedules. 
• Enhance real-time risk monitoring of ATM transactions to include specific amount trends and geolocations. 
• Develop clear, concise messaging to educate customers about the illegality and consequences of such actions. 
• Collaborate with social media platforms to rapidly identify and remove content promoting fraudulent schemes. 
• Instill social media monitoring by monitoring hashtags on their brand name or other banking lingo. This may clue them in on viral trends that impact the banking industry and the FI.  

For more information on the viral trend and how your institution may be impacted, contact me at [email protected]. For more information on emerging fraud trends, check out the Datos Insights report, Trends in Fraud for 2024 and Beyond, February 2024.

1. Alexander Saeedy, “JPMorgan Plans to Report Customers Who Exploited TikTok ‘Glitch’ to Authorities,” September 6, 2024, accessed September 25, 2024.   ↩︎