Why the Chase Glitch Underscores the Need for Financial Literacy
The first lesson in financial literacy should be that there is no such thing as fast or easy money. The age-old cautionary tale that if something is too good to be true, chances are, it is not true. Yet, thousands of people participated in bank fraud after viral videos on TikTok said that there was a glitch at Chase Bank that would allow you to deposit checks and immediately get access to the deposited money. This happened over the Labor Day holiday weekend. Most banks offer immediate access to a portion of a deposited check but getting access to an entire deposited check should have been a huge red flag.
But to a portion of people, that sounded like an opportunity to get access to quick money. Money that they did not have. While inflation has gone down and the unemployment rate is relatively low, people are still feeling the pressure of the high cost of living. The cost of groceries is still very high and there is a housing shortage mixed with an increased cost of renting or purchasing a home. On the surface, I get the desperation for financial relief and looking for ways to alleviate that stress. But the Chase glitch was not financial relief. It was fraud. Now, there are thousands of people who will lose their bank accounts and possibly serve jail time for following the advice of people on TikTok.
For the financially literate, it is hard to believe that anyone would fall for such a scheme. When I first heard about the “glitch”, I was confused about what people were actually doing and whether there was an actual glitch. According to NBC news, Chase did have a technical error that allowed people to immediately withdraw the full amount that they deposited. For me, it still didn’t explain why thousands of people thought that it was a good idea to attempt to deposit fraudulent checks.
And then I thought about it. Many people, especially young people, are financially illiterate. Earlier this year, I watched a Vox video on YouTube, Why financial literacy in the US sucks, where they talked about the need to bring financial literacy back into schools. Learning about money is a life skill that everyone should be required to learn before graduating from high school, in my opinion. In some households, it is taboo to talk about money. In households in poorer communities, parents may not be able to teach their children financial literacy because they are not financially literate themselves or they are too busy working multiple jobs to have time to teach their children anything. Also, you’d think that easy internet access would help people learn about things like establishing good money habits. But people don’t know what they don’t know. It’s kind of complicated.
For me, the Chase glitch underscored the need to teach financial literacy to young people and adults who were never taught good money habits. Love it or not, money makes the world go around. We all need money and we all need to have a healthy relationship with it. But what are the basics that everyone should know?
How to budget money. Understanding how much money is coming in and how much money is being spent on expenses is the most basic financial skill that anyone needs to learn. If they knew this, I believe that some people would have known that they didn’t have any other source of income to deposit a check into their Chase account.
How to set up and manage a bank account. Setting up a bank account is relatively easy but managing a bank account is a different story. There are bank fees, balance requirements (in some cases) and rules that must be followed when managing a bank account. I believe that if all the people knew this, none of them would have deposited a fraudulent check because they would known that they would have to account for the money when the check ultimately bounced. Even if the bank did have a technical error, they would have corrected it and investigated the accounts that were impacted. A bank is in the business of helping people manage and grow their money for a fee. They are not in the business of giving out free money. And you better believe that they are going to get their money back.
How credit works. Learning about how credit works, credit worthiness and responsible management of credit is also extremely important because it impacts your chances of obtaining credit cards or getting loans in the future. Credit scores also impact job opportunities and housing. If any of those individuals that deposited fraudulent checks cared about the impact on their credit, they would not have done it.
How to save for short and long-term needs. Good financial management helps us achieve our goals in the short and long term. It is easy to be enticed by easy or fast money, but it hurts us in the long run if we do things like commit check fraud. I’m sure that some individuals will have to file for bankruptcy and spend years paying back the money that they took. This will impact their ability to pursue a variety of goals that require money.
How to avoid committing financial crimes or getting scammed. Thanks to social media, the barriers to sharing content with the world have been eliminated. And because of this, we have seen an explosion of scams and fraud. There are people that are giving bad financial advice online or are scamming people out of their money. So, it is just as important to teach people about the different types of financial crimes and scams that exist so that they can avoid getting entangled in frauds like the Chase glitch.
Future of money. Innovations in technology have spawned new ways to access our money and new types of currencies have emerged. Although cryptocurrencies are still relatively new and governments are still figuring out how to regulate it, it will eventually become a more mainstream form of payment. Or some version of it. Crypto is also very controversial and many people have been imprisoned for committing fraud with cryptocurrencies. So, it is very important to learn about these new digital currencies as well as how to properly use mobile payment systems.
It would be hopeful, but doubtful to think that this won’t be the last financial scheme that goes viral on social media. Unfortunately, these platforms are ripe with misinformation and people looking for a quick payday. That is why we created How Money Works. How Money Works is part of our life and work readiness educational program series to teach financial literacy. With SassyChicGeek, we love to have fun exploring the many ways that we show up for ourselves. We also like to talk about serious things like money. We know that one aspect of living a full life requires us to minimize our collective stress over money.
If you are interested in bringing How Money Works to your school or organization, let’s get the conversation poppin’ by contacting info@sassychicgeek.com. Get your SassyChicGeek on! We are a community that offers experiences, education and products to take on your personal growth journey. We want you to be more intentional about showing up for yourself so that you can go out in the world to not only thrive, but be the change that you want to see. Take a journey to Sasstopia to meet the Sassnistas, explore our educational programs through Sasstopia University; listen to our podcast; read our blog; or shop our fun products. Let’s get it poppin’!