The viral Chase Bank ‘glitch’ that spread on TikTok proves it: We need better financial literacy

If it sounds too good to be true, it usually is. And in the case of this past weekend’s viral Chase Bank “glitch,” it was.

In recent days, social media users on TikTok claimed to have discovered a way for customers to withdraw huge amounts of money from Chase ATMs. In effect, the “glitch,” as it was described, worked like this: Someone writes themselves a large check, deposits said check at a Chase ATM, and then makes a withdrawal before the deposited check has cleared.

Accordingly, those individuals were walking away with cash that wasn’t actually theirs—by committing fraud.

Once Chase caught on, and the dust had settled in their accounts, account holders who had used the “glitch” had seven-day holds enacted by the bank, and were staring at massive negative balances.

While social media users were describing it as a “glitch,” what was actually happening is that Chase was adhering to certain banking standards that allow account holders to access a part of their deposit before a check clears. In effect, social media users were withdrawing as much as the ATM was allowing them, per the banking standard, only to have their fraudulent checks bounce later on, resulting in account holds and negative balances.

As described in videos, these account holders were taking advantage of the banking system, thinking that they had found a way to access free money, apparently unaware that it would catch up with them.

Financial literacy in the United States is stubbornly low

The recent Chase saga is reminiscent of the pandemic-fueled options-trading craze, in which young users were trading options and tapping margin trading accounts without fully realizing what they were doing.

That, too, ended tragically in some cases. It’s also another worrying sign that young people, in particular, are demonstrating a desperate need for financial literacy—especially in a day and age when complex financial tools are easy to access, but not necessarily easy to understand.

“There’s no shortcut, there’s no secret, there’s no hack,” says Jed Collins, founder of Money Vehicle, a financial education platform. “Anyone who thinks they’ve found a shortcut to becoming wealthy is either stealing from someone, or lying.”

Financial literacy is not lacking merely in young people, however. As the World Economic Forum (WEF) pointed out earlier this year, it has remained persistently low in the United States since at least 2017, and has even been ticking downward since 2020. The data was based on an annual 28-question survey developed by the TIAA Institute and the Global Financial Literacy Excellence Center.

As noted by WEF, respondents answered only 48% of questions correctly in 2024, down from 52% in 2019.

Will Chase pursue legal action?

Chase has said little about how widespread the activity was or what steps it will take next. “We are aware of this incident, and it has been addressed,” a spokesperson tells Fast Company. “Regardless of what you see online, depositing a fraudulent check and withdrawing the funds from your account is fraud, plain and simple.”

Fast Company has also reached out to TikTok for comment.