From TikTok Trend to Financial Turmoil: The Dark Side of First-Party Fraud
It was Labor Day weekend, and like many, I found myself leisurely scrolling through the news, hoping for some light-hearted stories to enjoy. Instead, I was greeted with headlines about a new viral trend sweeping TikTok—a supposed “money glitch” at Chase Bank. As someone who’s been in the trenches of financial fraud prevention for years, I couldn’t help but hop onto my keyboard to share a few thoughts. This wasn’t just a harmless trend but a gateway to something much darker: first-party fraud.
The news highlights the latest viral TikTok trend, where users claimed they had found a “money glitch” at Chase Bank, allowing them to cash in on free money. The reality, however, was far from a glitch—it was a classic check-kiting fraud scheme repackaged for the social media age. As a result, many of those who participated now find their accounts overdrawn by thousands of dollars, with some facing the harsh reality of having their bank accounts shut down and being barred from traditional banking services for up to seven years.
EXPLICIT CONTENT WARNING: The video below contains explicit language and doesn't reflect the views of Unit21. Source: Youtube, KILLIVVN
What’s Driving the Surge in First-Party Fraud?
So, why is first-party fraud, like this TikTok-fueled check scam, on the rise? Here are four key reasons:
1. Economic Pressures
With inflation and economic uncertainty affecting many, people are more desperate for quick cash. When finances are tight, the temptation to engage in fraudulent activities, even if they know it’s wrong, can be overwhelming.
2. Digital Banking’s Double-Edged Sword
The convenience of digital banking also makes it easier for individuals to commit fraud. Online platforms provide a layer of anonymity, making people feel emboldened to attempt these schemes, believing that they can outsmart the system.
3. The Influence of Social Media
Social media platforms like TikTok make it easier than ever to spread these fraudulent ideas. A single viral video can inspire thousands to try their hand at fraud, especially when it’s packaged as a “life hack” or “glitch.”
4. Low Perceived Risk
Many people don’t fully understand the consequences of their actions. They might think they won't get caught if everyone else is doing it. However, the reality is far different, with participants facing severe financial and legal repercussions.
The Connection to Encrypted Platforms Like Telegram
As easy as it is to learn these fraud schemes on TikTok, more sophisticated fraudsters are turning to encrypted social media platforms like Telegram. These platforms have become breeding grounds for advanced fraudulent schemes, where an underground supply chain makes it incredibly easy to tap into illegal resources. Here, fraudsters can purchase fake check stock, access courses on digital alteration, and find tutorials that walk them through the process of committing fraud step by step.
Dive deeper into how Telegram is used for check and ACH fraud
Check Fraud: This webinar delves into the latest trends and insights on check fraud, including the impact of mail theft on check fraud and emerging threats from the dark web and Telegram–informed by recent real-world examples.
Additionally we've dove into ACH Fraud. This webinar discusses three common types of ACH Fraud—ATO, returns, and BEC—using research from encrypted social media and the Dark Web to show how fraudsters recruit and commit these nefarious acts.
How to Protect Your Money Against Check Fraud
Check fraud is becoming increasingly sophisticated, but the good news is that you can stay ahead of it. Unit21’s Check Fraud Prevention & Investigation solution helps eliminate manual effort, cuts investigation time, and proactively flags fraud. The solution uses dark web monitoring, finding stolen checks before they reach the bank by alerting suspicious activity on the dark web and telegram. Our AI Agent tool aids investigations, ensuring your team can swiftly and effectively respond to potential threats.
Don’t wait until it’s too late to protect your institution. Get a demo of Unit21’s check fraud prevention solutions today.
Trisha Kothari is the co-founder and CEO of Unit21, a solution that proactively mitigates risks tied to money laundering, fraud, and other illicit activities. Trisha is driven by a powerful mission to empower the fight against financial crimes. Her professional journey, deeply rooted in engineering and product management, includes significant roles at companies such as Google, LinkedIn, and Affirm. During her tenure as an early engineer and product manager at Affirm, Trisha gained firsthand insight into the gross inefficiency and siloed ways that AML and Fraud operated. This experience served as a catalyst for her to develop innovative AML and Fraud solutions that Unit21 now offers today.
After leaving Affirm in 2018, Trisha joined South Park Commons, a community of builders, tinkerers, and domain experts. There, she met her co-founder and began tinkering with the concept of Unit21. Follow Trisha on LinkedIn, where she usually discusses new regulatory changes to be aware of, reacts to industry trends, and shares Unit21 product enhancements.
