My bank account is frozen: what should I do?
It is incredibly frustrating to discover that your bank account has been frozen, preventing you from accessing your legitimately earned income and savings. Yet this is a scenario which innocent customers face day in and day out. Attempts to speak with the bank, with whom you have been a customer for years, come to nothing. You have done nothing wrong and you need to have access to your bank account.
Why have the bank frozen my account?
Usually because there is a transaction or transactions which are out of the ordinary. For example, a credit of cash or a payment which is larger than that ordinarily coming in or out of the account. In such circumstances, the bank will consider it necessary to comply with its money laundering obligations under the Proceeds of Crime Act 2002.
What are the bank’s obligations?
It must seek ‘consent’ from the National Crime Agency (NCA) to process the transaction(s) by submitting a Suspicious Activity Report (sometimes known by the acronym 'SAR').
Why won’t the bank simply tell me this so I can explain?
The bank is prevented by law from disclosing the fact it has made a Suspicious Activity Report.
Is there anything I can do?
We would advise that you write to the bank providing a detailed explanation about the potential suspicious transactions. If you are unsure about which transactions have created suspicion, then please call us to discuss on 020 7183 8950.
How long can a bank freeze your account for?
This depends on whether the NCA wishes to investigate (they usually don’t) and how quickly the bank administers the process. The bank is required to wait seven working days for a response (so it cannot process the transactions during this period). If there is no response then consent is implied and the Bank ought to get on with processing the transaction. If the NCA refuses consent (because it wishes to investigate) then the maximum total period is 42 days (seven working days plus 31 normal days).
What can happen?
In most cases, the bank will simply release the frozen bank account (or sometimes they close it to which see below). If the 42 days has expired and the account is still frozen then it will be necessary for the police to apply to a court for an order (to extend the investigation period or to freeze the account).
What if there is a court order?
You will know about the basis for the making of the order and you will be able to challenge it in court.
What if the time has expired and there is no court order?
Then the bank are potentially acting in breach of their contractual obligations to you and you should seek advice about potential action.
Why have the bank closed my account?
It is now commonplace for banks to enclose bank accounts in circumstances where they have reported suspicious activity even if it has come to nothing. Quite often, this affects long-standing customers of banks who have done nothing at all wrong.
Can I do anything about the bank closing my account?
Unfortunately, unless you could demonstrate that you have been discriminated against under Equality Act 2010 there is, at present, no legal recourse against a decision by a bank to close a customer’s bank account. You will usually be given 60 days notice.
Articles are intended as an introduction to the topic and do not constitute legal advice.