"I really felt Wells Fargo was complicit in this theft of my money," said Jeff Yates, a resident of San Jose who's out more than $6,500 from the situation. "How many other victims are out there?"
7 On Your Side investigates how it happened and the lack of accountability that followed.
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Like any law-abiding citizen, Yates paid his taxes with a check addressed to the Internal Revenue Service for $3,268. It was mailed in an envelope, with proper postage, in April of 2022.
"Unbeknownst to me, the IRS never received my check," Yates said.
According to his Wells Fargo bank statement, the check was cashed. But it wasn't until a year later, during the next tax season, that he realized the check ended up in the wrong hands. Yates was eligible for a refund, but the IRS wasn't issuing it, claiming he never paid his taxes from the previous year.
"Where is this money?" Yates said.
The missing cashed check
Yates first called Wells Fargo to figure out where his funds went. But he says the bank refused to help him, stating: "too much time had passed to inquire or file a claim."
Yates called Wells Fargo several times with no luck. Then, he had his case escalated to the Wells Fargo executive team.
"And all three times they denied my complaint," he said.
In the meantime, Yates tried getting answers from the Internal Revenue Service.
After being on hold for hours -- getting transferred and disconnected again and again -- he says he showed up to the IRS field office in San Jose twice to explain his situation.
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"And that guy said, 'Sorry I can't help you...'" Yates explained.
Unfortunately for Yates, Wells Fargo could only provide a blurry copy of the cashed check, and the IRS couldn't make out the locator number on it to help. And to make matters worse...
"There's no signature..." Yates pointed out. "Usually, I thought you're supposed to write your signature when you cash a check."
Yes. In fact, Wells Fargo requires that consumers depositing checks in store or via their mobile app must sign the back of the check before cashing it. According to the Consumer Financial Protection Bureau, generally banks or credit unions will not accept a check that's not signed, or at least return it to you.
But that didn't happen here.
"I got taken advantage of," Yates said. "The bank was never any help."
Who dropped the ball?
"Somebody just dropped the ball," said Thomas Tarter, a 50-year veteran of the banking industry who has been retained in more than 2,000 cases involving big and small banks -- including some involving Wells Fargo.
"Wells Fargo internally would have a system to locate it and give details that would be necessary for the consumer to give to the IRS and not have him or her forced into making a double payment," Tarter said.
After getting no help from Wells Fargo, Yates filed a report with the San Jose Police Department.
Officers obtained a search warrant and discovered his check was cashed in Anaheim through a Wells Fargo ATM and was quickly transferred out. Investigators say the individual had a criminal record.
7 On Your Side's Stephanie Sierra: "So when you had the search warrant with the evidence of what actually happened... and you share that with Wells Fargo... they said what?"
Jeff Yates: "They said, 'Sorry -- you should have reached out to the business to make sure your check was actually received by them.' I'm like... wait, this is the U.S. Treasury, it's not a business....They didn't really address the fact that their ATM was used as a conduit to take money from my account."
Thomas Tarter says in Yates' case, Wells Fargo is at fault.
"Upon notification, Wells Fargo should have taken immediate steps to refund the money to the customer and simultaneously have initiated an investigation as to why it would have occurred," he said.
But again -- that didn't happen.
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On October 8, Yates received a letter from Wells Fargo stating his third claim was denied because "the claim was untimely reported."
And the IRS?
"The advocate, I reached out to her, telling her it got stolen through an ATM, and she goes 'OK perfect! I'll go ahead and close out your complaint,'" Yates said. "So she was just happy to close out my case. That was it... good luck!"
Wells Fargo Responds
7 On Your Side Investigates reached out to Wells Fargo for an interview, but the bank was unavailable to go on camera. We received the following statement:
"We empathize with our customer's situation. We never want to see anyone fall victim to fraud or scams. We continue to raise awareness to help our customers avoid, detect, and quickly report incidents. As an industry, banks follow established processes and timelines for investigating and helping customers reclaim funds, so it's imperative that customers file timely claims for any fraudulent transaction on their account."
"This is just another egregious example of a bank not doing what they should do and the consumer being harmed," Tarter said.
"I really felt Wells Fargo was complicit in this theft of my money... it's money that goes to feed our family. We can't just lose $3,000-plus dollars," Yates said, adding the total amount he lost is double that.
So what's next for Jeff Yates?
Despite having proof for the IRS and Wells Fargo he was the victim of a crime, both agencies did nothing.
The only thing he can do now is take this up in small claims court.
Wells Fargo offers the following tips for consumers to avoid check fraud:
- Consider using online payment features as alternatives to checks.
- Set up account alerts.
- Timely review your statements and the front and back of images/copies of cashed checks.
- Check with your intended recipient: If you send a check, ensure it is received and cashed by the proper payee.
- Report discrepancies immediately.