Don’t just let it go if your bank account is frozen
FOR nearly two years now, some people have been going to use their bank accounts only to be told their account had been frozen.
That means no cash, no regular payments, no card, nothing. What’s worse, on calling customer services (and managing to get through) they are told there’s nothing that can be done, and no one can help.
Welcome to the surreal and terrifying world of bank account freezing.
Though the problem seems to have started with some of the major ‘digital banks’ the same situation has now been reported with some big names on the high street too. So what’s going on?
Money laundering, the law and the computer says ‘no’
The big problem with account freezing is most banks won’t tell you why your account has been frozen, leaving you in a difficult position. You can’t get clear answers about what’s caused the problem and without them you can’t correct mistakes.
This situation arises when the banks suspect fraud or money laundering on an account. With money laundering, they are not allowed to tell you if an investigation is under way. But this is really not that common.
However, some banks have been overly cautious and seem to be extending these rules to any ‘suspicious transactions’ that are out of your usual account profile.
This could be a random £1,000 payment from a family member, for example. There’s no reason why your bank can’t talk to you about a suspicious transaction, but many are interpreting the rules too rigorously.
Why are so many people reporting that their accounts have been frozen?
The banks have been tight lipped on this, but I believe it’s because some have automated their money laundering and anti-fraud checks.
Most banks already use automation to spot unusual patterns in bank accounts, but it would seem new computer algorithms have become super sensitive in some cases. I’ve seen people whose accounts have been frozen after a £200 payment which is easily explainable. So it’s clear that things have gone badly awry.
What to do if it happens to you
This is the tricky bit. In the past, sorting out an account freeze issue was super easy. You called the bank, they asked you a few questions about the suspicious transaction and if you could answer or explain they would unfreeze the account. In fact, the vast majority of these complaints were resolved on the phone, on the day. However, now, I’m being told that people are waiting long periods of time to get through to customer services teams, then being told there’s nothing that can be done.
Here are a few tips, to help you out if there’s a problem.
If you still have access to online banking, go through your recent transactions and highlight anything that might be out of the ordinary. Make sure you note down where they come from.
When you call the bank, ask to speak to their fraud team as they are more likely to have the power to take a pragmatic look at your account. Ask if a certain transaction has caused the problem and explain why.
If the bank refuses to help then make a formal complaint there and then. Failing that take the case to the Financial Ombudsman.
Set up a new bank account as soon as you can. Ask the new bank if you need to set up your regular payments again and ensure your cash is paid into the new account.
If you are on benefits, then ask if they can recall the money in the frozen account and pay it to a new one. You have a legal right to specify where your benefit money goes and in theory, the bank should not prevent you from accessing it
If you get caught out by a frozen account issue, don’t despair! Chances are it’s not your fault so ditch your bank and make a complaint. Resolver can help for free at resolver.co.uk