So, your bank has frozen your account, what now?

28 Mar 2024, 54 mins ago

Banks can, without notice, freeze your bank accounts due to “suspicious activity”, but suspicious activity can be subjective to a specific person’s or entity’s bank account. General examples that are given include “unusual case transactions” or a “sudden increase in activity” on the account.

However, what is “suspicious” for one entity may be run-of-the-mill, daily activity for another, and so if your activities suddenly change or you have one suspicious transaction, this could trigger the bank to freeze your account.

Whilst banks tend to lean on the narrative of “we’ll sort this out as soon as possible”, their meaning of “as soon as possible” turns out to be as subjective as their definition of “suspicious activity”, meaning that many customers, both private and corporate, can be left with accounts that are frozen for months. The impact can be enormous. Individuals may be unable to make payments for their everyday lives, whilst businesses can be left completely crippled with their cash flow being cut off, all while banks investigate the suspicious activity at their leisure.

It is unfortunate that clients will often only approach us when they reach breaking point and are desperate for the banks to unfreeze their accounts before a personal or economic catastrophe ensues. Sadly, some banks only respond to requests to unfreeze an account after well-placed pressure by a client’s solicitors, despite the client fully cooperating with the bank’s investigations.

Whilst banks are within their rights to freeze your account if they conclude that suspicious activity is noted, they are not entitled to maintain the freeze for an unreasonable amount of time, and a customer of the bank who has been left unable to use their account for an unreasonable amount of time and without a justifiable reason, is entitled to claim damages from the bank. These damages can be made up of interest that would have accrued on the funds in the account, fees and interest that the customer has incurred for using loans or other funds while the account was frozen and, of course, any legal costs for work in respect of unfreezing the account, as well as  for negotiating any of the above damages that were incurred by the customer.

How Gherson can assist

If your personal or businesses account has been frozen, it is imperative to approach the bank as quickly as possible to resolve any misunderstanding. Gherson can assist in streamlining the requests from the bank to ensure that all the correct information is given to the bank to remedy suspicions in the quickest time possible, leaving the bank with little room to justify keeping the account frozen. Gherson can further assist you with negotiating or claiming any damages from the bank that you have suffered because your account was frozen.

If you have any questions arising from this blog, please do not hesitate to contact us for advice, send us an e-mail, or, alternatively, follow us on XFacebookInstagram, or LinkedIn to stay-up-to-date.

The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.

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