What to do when your bank account is frozen
For consumers, bank accounts serve a lot of purposes, from storing hard-earned money to facilitating transactions. Imagine if one day, you find out that you can no longer access your fund or make transactions with your card.
Your bank account might’ve been frozen.
There are various reasons why bank accounts can get frozen, but most of them have something to do with suspected illegal activities or non-compliance. This article will guide you through frozen bank accounts and what you can do to recover them.
What freezing a bank account means
When a bank account is frozen, this means that using this particular account is disabled. This includes credit or debit cards linked to this account. It’s worth noting that deposits and transfers are still enabled, meaning people can continue sending money to your frozen Venmo account or a frozen Chime account. What’s not possible, however, are withdrawals, payments, and transfers from the frozen account.
Also, in most cases, you can continue checking your account through their official banking apps. This also applies to digital wallets and payment options like PayPal, Chime, or Venmo.
Usually, when an account is frozen, it’s because of suspected illegal activity or a request from a government or another financial institution. There may be something wrong with your account, it may have been compromised, or someone has advised against you in order to collect outstanding debts. Either way, it’s always best to contact bank account freezing lawyer for help. DebitCardLawyer.com can help answer your questions.
What happens to your automatic payments
If you use your cards for automatic, recurring payments, make sure to prepare backups. Once an account is frozen, all these payment arrangements are also disabled. Even worse, there are no notifications to tell consumers about it, only when their bills are overdue that they learn about it. Frozen accounts are also not considered valid when you try to dispute a debit card transaction.
What causes your bank account to freeze?
After waking up to a frozen Chime account or a frozen Venmo account, the first thing you’d probably ask is “Why?” To narrow down your options, here are the most common ground for freezing a bank account.
Illegal Activity
In the US, there has been a significant increase in vigilance regarding bank activities, especially since they can be used to move funds for unlawful or extremist activities.
One common red flag for banks is the sudden and successive transfer of large sums of money. Money laundering refers to turning “dirty money” into “clean money.” Funds gathered from illegal sources (extortion, gambling, prostitution, and selling of illegal wares) are deposited into bank accounts and then transferred to other accounts for other uses.
The same can be said for cases of tax evasion attempts or terrorist financing activities, giving banks enough grounds to freeze an account suspected of engaging in these acts. For example, should banks find regular daily deposits of just under $10,000 can cause your bank to file for a Suspicious Activity Report (SAR).
Unpaid Debts to Private Creditors
For lending businesses, one of the risks they continuously face is non-payment from delinquent clients. One of the measures they can take is to take it to the courts and sue you. With approval from the court, they can request your account to be frozen.
This way, you will be formally notified. A copy of the notice and decision is sent to the bank. Conversely, the lender can also access your loan account at the bank in order to pay the defaulted loans without the need for a lawsuit. This is one of the fine details included in most loan agreements.
Unpaid Obligations to Government Units
The Internal Revenue Service (IRS) is capable of imposing a tax levy for unpaid taxes, which stays in place until the debt is paid. Additionally, the government can also take other measures, as in the case of defaulted student loans. They can put your tax refunds on hold or garnish wages and taxes.
What to do in case of a frozen bank account?
Now that you’ve been given a glimpse of what might’ve caused the freeze, here are some of the things you could do.
Inform your bank
Informing your bank serves a number of purposes. First, it confirms that your account is, indeed, frozen. Next, they can orient you on the rules and procedures for such scenarios or even direct you to the proper offices. This is the first and most important procedure, especially since ignoring a frozen bank account can cause other obligations to build up and cause larger problems in return.
Arrange your outgoing payments
As mentioned, frozen accounts no longer make automatic payments. For traditional banks, written checks, and recurring payments are withheld, and you’ll need to find other ways to settle your other obligations.
Digital banking users might wonder, “But I’ve closed my Chime account?” or “What if I’ve already closed my Venmo account?” Your outgoing payments are canceled immediately, but you won’t be able to access your funds anymore.
Provide proof or evidence
If the suspected transaction is actually legitimate, you can present proof. If the bank deems your reason valid, they can unfreeze the account. For accounts frozen to creditors, you can request for their legal representative’s contact information from the bank.
Request legal aid
If the previous step still doesn’t solve your problem, you can request legal assistance on how to proceed. Depending on the scenario, and the state you’re in, you can avail of legal services or federal protection that apply to frozen accounts. More importantly, a lawyer can help you protect your interests in the courts.
How to get back a closed Chime account?
Some users might find their Chime accounts closed. Since Chime is technically not a bank, it has the prerogative to close accounts without notifying users. Even then, should they send a notice to your email, it’s always wise to respond immediately.
If they’ve closed your Chime account, you can simply reach out to their customer support team. Just be ready to present proof of billing, as well as documents for the suspected illegal activity that got your account frozen. If all else fails, contact an attorney for help. The attorneys at DebitCardLawyer.com only charge you a fee if we win your case.
How to get back a closed Venmo account?
For Venmo, you can recover the closed account through the app. Just select “Forgot password” from the home screen, enter your account details, and wait for a password reset link sent to your email. The link will allow you to create a new password.
You can also visit the Venmo website and search for the “Recover” page, then log in. Venmo will then send an email containing grounds and instructions on how to recover your account. Make sure to respond to this email.
Contact a bank closure attorney
While the best way to prevent frozen accounts is to be prompt with your obligations, not everyone has the luxury of earning more than they need to settle all bills. However, should something such as frozen or closed accounts happen to you, remember that there’s always something you can do. If your bank account is closed, you should contact the experienced attorneys at DebitCardLawyer.com. We can take a look at your case and help you get your money back.