This is Not Fraud Advice--Free Money Glitch

Hello everybody -

Last week, I was working on what to write about in this newsletter and searching for fresh fraud stories. By Friday, I came up empty-handed, packed my bag, defeated, and watched the Eagles beat the Packers (sorry, Mike).

The thrill from the Eagles' victory was short-lived as I continued to toil away on the following topic of NOT FRAUD ADVICE.

You can imagine my relief when I woke up on Saturday to a brand-new "free money glitch" spreading on social media.

In honor of the TikTok craze around the "Chase Free Money Glitch," we're discussing check fraud today.

The TL;DR on the "glitch," if you haven't been as online as I have, is that Chase customers were depositing large checks and then withdrawing the money at an ATM before the check bounced.

This isn't a particularly sophisticated fraud case, so instead of walking through the strategy, I will highlight two things that led to this "glitch": 1. The demand for frictionless financial experiences and 2. The lack of financial literacy across the country.

Demand for Frictionless Financial Experiences

We live in an unbelievably frictionless world. When you're hungry, you can pull out your phone and order food from hundreds of restaurants to be at your door within the hour. Need to get somewhere? Your phone can have a car pick you up in less than five minutes. Hell, if you're feeling sore, you can have a masseuse at your door within a couple of hours.

This expectation for frictionless experiences has now entered our financial lives. We get frustrated when we have to scan our ID to open a Robinhood account. We leave apps if they take more than a minute to update. If someone wants to offer us a loan, it better be available before we finish checkout for that new Peloton.

This has forced companies like JPM Chase to make decisions centered around eliminating friction in the user experience. This is why the funds are immediately available for use when you deposit a check at the bank or through your phone. Chase worries that you'll take your business elsewhere if your experience isn't seamless. So, when someone writes a fake check to themselves, they have time between when the funds are available and when the check bounces.

Frictionless experiences are great. But at Footprint, we believe in a certain level of "good friction." Friction isn't just there to protect the companies; it's there to protect us, the consumers. If we're concerned about our identity being stolen or falling victim to a phishing attack, we should be willing to take a moment to verify our identity or sign in with a passkey.

Lack of Financial Literacy

This one is a bit outside our wheelhouse at Footprint, but it's alarming to see how many people thought writing fake checks to themselves and stealing the money was a good idea. Some even thought it was a good idea to document the whole process and post it online.

I don't know how to fix the lack of financial education, but mandatory personal finance courses in high school would be a start.

People should have at least a basic understanding of the financial system. They need to know that if they withdraw $20k that they don't have, someone will eventually (and probably very soon) come looking for that money.

Thanks for putting up with my rant.

Until next week -