US Banks Are Abruptly Freezing Accounts — Here's How You Can Save Yours (2024)

Customers are increasingly finding their accounts closed by banks eager to avoid regulatory scrutiny.

According to a New York Timesreport by Ron Lieber, banks are proactively closing accounts without notice, leaving customers stranded without access to their funds, often for extended periods.

Bankslike JPMorgan Chase and Bank of Americause sophisticated systems to detect illegal activities, but thesesystems are often sensitive and can misinterpret ordinary customer activities as suspicious.

As a result, customers need to manage their accounts carefully to avoid being falsely flagged as engaging in illegal activities.

To avoid such mishaps, it's advisable to maintain a consistent pattern in your banking transactions, according to Lieber.A predictable flow of income and expenses can help you clear yourbank's radar.

Furthermore, when opening an account, making a large initial deposit can be a red flag, since banks may takeinto account one'semploymentor arrest record to determinewhether the deposit is suspicious.

Also Read:US Banks Witness Whopping $100 Billion Deposit Drop In Just Three Weeks, Fed Survey Raises Alarm

With incidents ofmail theft and fraudulent checks rising,banks have responded by alsotightening their check-fraud detection algorithms. To minimize your risk, consider limiting your use of checks and be mindful of how youmailthem.If necessary, opt for more secure methods like taking them directly to thepostal office.

Lieber also noted that it is important to understand what could triggera bank's suspicion. For example, the American Bankers Association identifies certain cash transactions as red flags — consistently making cash deposits of just under $10,000 to avoid legal reporting requirements can mark your account as suspicious.

More importantly, communicating significant financial changes to your bank canbe particularlybeneficial, Lieber added.

In the event of an account closure, Liebersaid it is important to staycalm and approachthe situation rationally. If available, you should try visiting a bank branch and discuss the issue politely. Emotional outbursts or aggressive behavior are unlikely to resolve the issue and may escalate the situation.