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Ex-Wells Fargo employee and former fraud examiner, Matthew Valles, tattled on America’s number-one home lender this year after filing a whistleblower lawsuit and revealing to federal investigators that the mega bank broke the law. https://www.courthousenews.com/wp-content/uploads/2018/03/WFBank.pdf

When bank customers register fraud complaints, federal statutes compel financial institutions to examine and scrutinize the questionable activity; innocent victims of bank fraud further hold legal rights to keep their accounts open while banks investigate, according to the law.

Conversely, financial institutions may close accounts immediately (i) if investigators determine the account holder was the individual participating in the fraud; and, (ii) after contacting law enforcement.

Instead of following federal rules, Wells Fargo allegedly took the easy way out and quietly closed accounts with suspect fraud to save on time and to avoid paying investigatory expenses.

Former Wells Fargo Employee Files Whistleblower Lawsuit

Valles claims that while he was working in the fraud investigation department at Wells Fargo, Portland, Oregon, in 2014, bank executives made a “business decision” and ordered him to close accounts without notice to customers to cut costs in his department.

Specifically, Wells Fargo management demanded immediate closure of any consumer account that displayed fraudulent withdrawals or other unlawful activity.

The conscientious employee claims he advised Wells Fargo execs that closing accounts without investigating prior violates federal law.

Valles further says he complained to his bosses that improper account closures would bar account holders from withdrawing cash and could damage their credit if fraud investigators terminate accounts with overdrawn balances.

Wells Fargo allegedly responded to Valles’ protests by firing him, in early 2018, for making internal complaints, four years after management informed him the bank’s “new standard practice” is to have consumers absorb the costs of investigating fraudulent activities and unauthorized withdrawals on their accounts.

Bank officials claim Valles’ discharge was legitimate because he had violated company policy after leaving his laptop open overnight, which contained private account holder information and subjective security data. Wells Fargo further maintains the bank had disciplined Valles often and prior to the laptop incident.

Valles has since filed an unlawful termination lawsuit against Wells Fargo and his superiors, asserting his firing infringed on state and federal whistleblower-protection laws.

The CFBC Investigates Wells Fargo Illegal Account Closure Complaints

In late August, Wells Fargo advised its shareholders that the Consumer Financial Protection Bureau (CFPB) was investigating whether the bank had harmed consumers by immediately “freezing or closing” accounts suspected of engaging in bank fraud.

Before the financial institution made its financial disclosure, the CFPB’s consumer complaint database held thousands of Wells Fargo reports from account holders, alleging that company fraud investigators interrupted or closed bank accounts without explanation or notice. https://www.consumerfinance.gov/data-research/consumer-complaints/search/?from=0&searchField=all&searchText=Wells%20Fargo&size=25&sort=created_date_desc

Consumers further detailed in their CFCB Wells Fargo complaints that the unwarranted closures barred access to their money assets, causing economic hardship; and the interruptions made it more burdensome for account holders to recover missing funds from unauthorized withdrawals.

In December 2017, the bank notified the CFCB it was revising its policies for handling accounts with suspicious fraud activity; and in 2018, Wells Fargo restructured its bank fraud division and renamed it the “Audit Department”

Auditors stopped the standard practice of automatically closing accounts suspected of fraud; and management ordered it staff to run more comprehensive investigations.

Today, Wells Fargo account closures only take place if auditors find definite evidence of deceitful acts by individual account holders.

Wells Fargo Closed Accounts of Innocent Fraud Victims

Evidence produced in the CFCB investigation indicated that Wells Fargo locked or closed the accounts of many innocent fraud victims.  

Thousands of CFCB complaints possessed the following three antecedents where fraudulent activity arose from no liability on the account holder:

  • Accounts closed due to fraudulent deposits from unknown sources.
  • Accounts frozen after holders fell victim to identity theft.
  • Accounts terminated when hackers gained access to personal information.

In the details mentioned above, the complainants debts became delinquent (credit card bills and mortgage payments) because Wells Fargo’s fraud department locked them out of their bank accounts.

Class Action Lawyers Scrutinize Past Wells Fargo Bank Closures

The class action lawyers affiliated with Claims Match are pleased to read Wells Fargo Bank is now adhering to the law and abstaining from harming innocent victims of fraud by not closing their bank accounts without first investigating.

Unfortunately, the recent reforms at Wells Fargo do not remedy the thousand of customers whose accounts have previously been closed.

Our attorneys are now reviewing prior complaints from individuals who claim Wells Fargo froze or closed their bank accounts when fraud or questionable activity showed up on their bank records, leaving them without access to their hard earned money.