bank g9baec7f14 640 324x160 1 - 4 Signs of a Frozen Bank Account

4 Signs of a Frozen Bank Account

Getting a notice that
your bank account is frozen can be very embarrassing and alarming, especially
if you’re trying to buy groceries or while out with friends.

What Is a Frozen Bank Account?

It can be distressing to
know that your account is frozen, especially since it could be due to a debt or
a potential issue with your account. Although it can be difficult to access
your account, you can still make transactions.

How do you know if your bank account is frozen? According to the experts at SoFi Invest, “Bank
accounts are frozen for several different reasons, and each one requires a
specific set of steps to get the bank to unlock the account.”

Although it’s still
possible to monitor your account, the freeze prevents any transactions from
happening. This includes making purchases and withdrawing money from the
account. It also prevents unauthorized transactions, such as those involving
preauthorized payments.

READ MORE:  Mlgw.com Pay Bill Login Process and Details

 Illegal or Suspicious Activity

Due to stricter
regulations following the September 11 terrorist attacks, banks have the
authority to freeze accounts if they suspect that the account holder is
engaging in illegal activities.

Money laundering and
terrorist financing are some of the reasons why banks often freeze accounts.
These activities are carried out by criminals who use fake money to move large
sums of funds across various accounts.

If the bank flags suspicious
activity, it’s also possible that you were the victim of identity theft. Having
a credit monitoring service can help keep you from getting victimized.

 Unpaid Creditor Debts

If you have unpaid
debts, your creditors can request that the bank freeze your account to collect
the money. However, before they can do this, they must first get court
approval. The same institution can access their accounts to collect people’s
debts who have multiple loan accounts. Even after you default, the bank can still
access your account.

READ MORE:  How to Increase Your Influence at Work

 Unpaid Government Debts

If you have student
loans or taxes due to the government, your bank account may be frozen. The IRS
can issue a tax levy if the debt is unpaid. The government can also seize your
tax refund or a portion of your paycheck to collect the debts. If the loan is
in default, the lender can garnish wages without going through the courts.

Although your bank
account may have been frozen due to suspicious activity or debt collectors, it
should not be wiped out of funds. However, some states have strict regulations
for taking money from accounts.

 Account Inactivity

A bank’s suspicion about
a business account is based on the fact that it doesn’t show any activity or
history of transactions. If the account’s owner is not a permanent resident of
the account’s country, this could raise the bank’s suspicions.

It can be unsettling and
frustrating to find out that your bank account has been frozen. Not knowing how
to pay the bills can be a painful experience. Thankfully, there are ways to get
your account unfrozen to use your funds again.