Reasons why the bank may have placed a freeze on your account
Patrick is in Sainsburys and tries to use his bank card to pay for his groceries. Card declined. He tries again. Declined. Patrick is mortified and has to leave his pint of milk and loaf of bread at the checkout.
He calls his bank, who tell him that they will look into the matter for him and someone will call him back. Patrick calls his bank again later that day and is told the same thing.
The next day, his mortgage payment is due out of his account. He knows he has enough money in his account to cover it but is worried that the bank will not process the payment. He calls them again and when he gets no further information, he decides to call into his branch to speak with the manager. The staff in the bank tell him that they are looking into the matter but that they cannot help him immediately, but that someone will be in touch.
Patrick starts to panic. Why will the bank not tell him what is going on, and what can he do to get access to his money?
There are several reasons why a bank might freeze your account.
- A creditor may have obtained a judgment against you and are seeking to recover the monies. A creditor will need to obtain a Court Order to do this;
- A Freezing Order has been made against you by a UK court to protect assets, for fear that the assets will be moved out of reach;
- If your company is the subject of a Winding Up Petition, the bank may freeze your account upon having been notified of the petition;
- Immigration checks flag a problem. The Home Office has the power to freeze accounts;
- The Bank has detected potential fraudulent activity on the account, or a suspicious transaction. If this occurs, the Anti-Money Laundering Officer is obliged to report to the National Crime Agency using what is called a Suspicious Activity Report (SAR).
The issuing of a SAR is the most common reason why bank accounts are frozen. Customers will often find that the Bank will refuse to tell them any information about why the account has been frozen, or for how long. The reason for this is that the Bank are prohibited from passing this information on to a customer as it may be considered to be “tipping-off”.
If the Bank makes a SAR, the National Crime Agency (“NCA”) will have 7 days to respond to the Bank as to whether or not further investigation is required. If further investigation is deemed to be necessary, the NCA will have a further period of 31 calendar days to carry out enquiries into the activity. The customer may or may not be notified during this period.
If your accounts have been frozen, it is always advisable to make alternative arrangements if possible to ensure that you have access to funds. The Bank may not honour direct debits or standing orders while the account is frozen.
It is also advisable to maintain a dialogue with your bank and be as cooperative as possible with any requests.
If your account has been frozen and you are worried about accessing your funds, please contact Caoimhe Boyce on cboyce@meaby.co.uk or 0207 703 5034 to look at your options. We can provide expert guidance to you.
