Santa Fe Law Firm Fights Back After Out-of-State Bank Freezes Local Business Accounts Without Cause

Victimized by a big bank in New Mexico? Learn how faulty fraud software and poor training led to the unlawful freezing of a New Mexico small  business’s accounts—and what legal rights you have.

When Big Banks Get It Wrong: How Faulty Fraud Detection Nearly Destroyed a New Mexico Small Business

There is a growing pattern in New Mexico and nationwide: large out-of-state banks using flawed fraud detection software and undertrained staff to freeze or close checking accounts—often with devastating results for local residents and small businesses.

At Humphreys Wallace Humphreys, we’ve witnessed the human cost of these failures firsthand. A client of our law firm—a family-run business that has served New Mexico customers faithfully in their construction business—was nearly destroyed when their personal and business accounts were suddenly frozen and closed without proper investigation.

The Story: When a Wire Transfer Triggers a Catastrophe

Our clients received a routine wire transfer of loan proceeds into their New Mexico branch business account. This transfer, sent by a reputable lender, was a key to funding completion of multiple ongoing construction projects. But instead of helping them move forward, the wire triggered a catastrophic failure.

Within seconds, an automated fraud detection system at the bank flagged the deposit as suspicious. Without warning, the bank closed both the personal and business checking accounts, freezing more than $80,000 of the clients’ own money and causing the lender to doubt our client as a borrower.

This wasn’t just a technical hiccup. It had real and immediate consequences:

• The lender recalled the wire—not because of fraud, but because the recipient account, our clients business account,  no longer existed.

• The bank then cited the recall as proof the wire was unauthorized, even though the recall occurred nearly two hours after the account was closed.

• No one at the bank called the bank that sent the wire to ask whether fraud had actually occurred.

And ongoing fact finding has shown, that the senior analyst openly stated that she never called the other bank. Her reasoning? She basically said "I did what I was trained to do. I am satisfied with my work and I’d do it the same way again."

Dozens of Calls, No Accountability

Our clients placed over 60 phone calls to their bank, pleading for answers and explaining how this mistake was destroying their livelihood. They were met with unkept promises for a return call, indifference, and robotic policy enforcement. The bank held onto their funds for months, ignoring both the hardship and the facts.

This isn’t just bad customer service. It’s illegal and you can do something about it.

Why This Matters for New Mexico Residents

Banks owe their customers a duty of care, especially when making decisions that impact livelihoods. Under both New Mexico consumer protection laws and federal banking regulations, banks must conduct reasonable investigations when fraud is suspected.

But when those investigations are outsourced to flawed algorithms and inadequately trained personnel, innocent people suffer.

Santa Fe residents and New Mexico businesses should not have to live in fear that their accounts can be shut down automatically, without investigation, due to bad software or poor staffing.

What You Can Do If This Happens to You

If your bank account has been wrongfully frozen or closed:

• Document everything: Keep records of communications, emails, wire instructions, and calls.

• Request written explanations from the bank.

• Do not assume the bank is right—they often are not.

• Contact a qualified attorney immediately.

At Humphreys Wallace Humphreys, we help New Mexicans fight back against unfair banking practices. Our firm has a proven track record of standing up to national banks when they ignore the rights of New Mexico consumers and businesses.

Has your account been frozen by a big bank?
Call our Santa Fe office today at 505-495-0093 or email david@hwh-law.com or luke@hwh-law for a free consultation. Let us know you saw our blog on bank account closure. We fight for New Mexicans who’ve been treated unfairly by the financial institutions they trusted.