You may lose access to your bank account or your card might decline without you even knowing it. This could be because of the bank closing down your account which essentially means that it no longer exists. On the other hand, the bank could also freeze your account, preventing you from accessing your reserves.
There are steps that you can do to prevent this from happening and saving yourself from the headaches. Here are a few things you need to know about a frozen or closed bank account.
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What happens when your bank account is closed or frozen
You might receive a notification from your bank that your account is closed or frozen but sometimes they won’t do that. With a frozen bank account, you won’t be able to make transfers or withdrawals and you won’t have access to those funds.
With a closed account, the bank might move your bank balance to another type of account, send you a check, hold the funds for you to pick up, or use the funds on unpaid things. If your account is overdrawn at the time of closing, then you are responsible of paying the amount you owe the bank.
If you have a bad history with banking, then a second chance checking account might be the option for you.
Why your bank account could be frozen or closed
Your bank might freeze or close your account for a few different reasons. This could be because of little to no activity occurring. Another common reason is suspicious activity or making a purchase at a retailer that’s had history of fraudulent activity.
Your bank may contact your for suspicious activity that they see on your account and ask you to verify your purchases. If you do not confirm or you don’t respond, your account may freeze. Your financial institution might close your account if you have excessive overdraft fees or consecutive negative balance.
Depending on your financial institution, the rules and requirements around bank account closures and freezes may vary.
If you want to prevent debit card fraud, here are some tips to quickly protect your bank account.
What to do when your bank account is frozen or closed
If your account is frozen due to suspicious activity, you can easily contact your bank to verify your purchases. You must verify your identity with documentation before your account is unfrozen. You can also let your bank know of any unauthorized transactions by looking at your account statements.
If your account is frozen due to a court order, you can try to get the judgment erased by working with a lawyer. If that doesn’t work, you can pay to regain access to your account.
If you’ve failed to receive a check for the balance on a closed bank account, contact the bank’s customer service. For more help, visit the Office of the Comptroller of the Currency’s Customer Assistance Group and fill out the online customer complaint form.
As another option, check out our post of the best prepaid debit cards.
How to prevent your bank account from being closed or frozen
There are a few different ways to prevent your account from being closed or frozen. For example, if you plan to travel or make a big purchase soon, contact your bank and let them know. If you’re prone to overdrawing your account, opt into overdraft protection so that you are covered.
Understand that your bank account can be closed or frozen without it being your fault. Banks look to protect their assets and yours, so any activity that could look suspicious or illegal may result in account freeze or closure.
You may or may not be notified when your account is frozen or closed. This could be your fault or the banks fault, so be sure to follow and take our steps to prevent this from happening and saving yourself from the headaches.
Here are a few things you need to know about a frozen or closed bank account! Check out our Best Bank Promotions & Bonuses as well as save money here at HMB!