When processing transactions, banks usually keep an eye out for illegal or unscrupulous activities. These activities range from money laundering, terrorism funding, bad checks, unpaid debt via creditors, etc. As soon as your bank flags your account for those activities, they’ll freeze it. Mind you, banks have the authority to freeze your account if they suspect illegal activity. So if you find yourself in this unpleasant situation, you may be asking yourself, “How long can a bank restrict my account for dubious activities?”
If your bank freezes your account for a suspicious act, the hold or restriction will last for about 10 days for simpler situations. However, if your case is complicated, your bank account may not be unfrozen until after 30 days or more.
The unfortunate 9/11 incident made the US rejig its security architecture and other areas prone to criminal enterprises. Banks weren’t left behind. After the terrible incident, which claimed many lives, banking regulations become stringent to detect and prevent a reoccurrence of the unforgettable incident. Your account could get frozen for the slightest of reasons. And when this happens, you may be eager to know how long it’ll take before it is unfrozen. Fortunately, I covered that in this article.
Can a Bank Deny Access to Your Money?
How Long Can a Bank Freeze Your Account for Suspicious Activity?
The story of banks freezing individuals’ accounts is very rampant. If you should interview everyone in your community, I bet you’ll find a handful of people who have had their bank accounts suspended for one reason or another. However, one cannot really blame the banks. These institutions are doing their best to ensure that they don’t incur any loss whatsoever. And most importantly, such actions are geared towards checkmating criminal elements who may want to use these institutions to conduct their unscrupulous business.
The truth is, a bank has the authority to suspend your account if it is flagged for suspicious activities. Which suspicious activities? You may ask. You see, these activities aren’t only centered on terrorism financing and money laundering. If you have an unsettled debt to a creditor, your bank can go ahead and suspend your account on the directive of the creditor, who would have obtained approval from a court. Other reasons why banks freeze individuals account are:
- Fraudulent transfers
- Unpaid debt to the government
- Bad checks
When a bank suspends your account, you won’t be able to perform any debit transaction, neither will you be able to make withdrawals, purchases, or transfers. However, you may be able to make deposits and transfer into the restricted account. Put differently, when your account is restricted, you’ll be able to deposit money into it, but you won’t be able to make withdrawals. A restriction will be lifted when you fulfil the conditions of the restriction.
A bank can suspend your account at any given time, for as long as they want, to investigate suspicious activity. If, for instance, some suspicious funds were deposited into your account, your bank may restrict your account to investigate the origin of the funds and ensure that the funds are not linked with any criminal institution. After their investigation is complete, the restriction will be lifted, and you’ll be able to access your fund and make transactions.
Now, if your account was suspended for suspicious activity, you’ll definitely be eager to know when the suspension will be lifted. You see, an account freeze is not indefinite, and sometimes it usually requires some actions from the account holder before it can be resolved.
So if you wake up one day to discover that your account is frozen, be rest assured that the restriction will last for around 10 days if it is for a minor case. However, if your account was restricted because of severe reasons, you may not have access to your account till after 30 days or more.
If investigation regarding the suspicious activity is not concluded after 30 days or even two months, your account will remain temporarily sealed. In a nutshell, your account will only be released if you aren’t found guilty of any crime after the investigation.
However, if you were found guilty of money laundering or financing a terrorist group or act, your account will be closed, and the funds in it may be seized. And let’s not forget that you may end up cooling off your heels in jail. So, to avoid all these, ensure you don’t involve yourself in any illegal activity.
Worthy to note is that no law limits or states how long a freeze can last, and banks don’t promulgate policies on how they handle such situations. So, how long your money is held or restricted hinges on your situation and the decision of those sitting at the helm of your bank. Remember, when your account is restricted because of dubious activity, there is little you can do to undo this act. So always be cautious and stay out of trouble.
Can You Use a Cancelled Debit Card Online?
Can a Bank Freeze Your Account Without Informing You?
Banks are financial institutions governed by the Federal Government of a country. Thus, they have the right to restrict your account if they suspect any illegal activity. Suppose your bank suspects that your account was used to launder money, support a criminal act, or fund terrorism. In that case, they will place a temporary hold on the account until the unnecessary investigation has taken place. With that said, you may want to know if a bank can suspend your account without letting you know.
Banks usually freeze accents without informing the account holders. This is done to protect the funds in the account. But, a bank must inform the account holder or holders after freezing the account.
If, peradventure, your account was flagged for a crime and your bank informed you that your bank account would be frozen the following day, wouldn’t you make an effort to remove the fund from the account? Even if you aren’t guilty of whatever offence was levelled against you, to take precaution, you may want to withdraw the fund from the account and maybe close it. So that is the major reason why banks don’t inform account holders before suspending their accounts. I guess they love the element of surprise!
