Question of the day: how long can a bank freeze your account for suspicious activity. Is it one year, two years or three years and above. That’s what you’ll find out on this post.
Suspicious activity, what it is it all about in banking?
When you hear bank account frozen due to suspicious activity, this tells you that your bank account has involved in illegal transaction. This is one of the major reason why bank account get frozen.
First let me explain what the term frozen account mean in the banking system or industry.
What is frozen account
The word frozen means to get cold and hard, in banking it literally means closure of account from withdrawing or transferring funds from one’s account.
In a frozen account, you can receive funds but can’t withdraw it, transfer it or use it for any transaction. And this remains so until the bank unfreeze the account.
Deposit money bank can’t just freeze a customer’s bank account just like that, and many a time frozen account comes immediately after a court order. It is the duty of the bank to obey the court order.
Then the question is why is bank account frozen due to suspicious activity?
Reasons bank freeze your account for suspicious activity
Some of reasons why banks through court order freezes a customer’s bank account are as follows;
1. Illegal bank transaction
Illegal transaction or suspicious activity as always been the number major reason why customer’s bank account gets frozen.
Illegal or suspicious activity in one’s bank account can be money laundering, scamming and other fraudulent actions.
If banks suspects that a customer’s bank account is used in laundering money or scam people of their hard earned money, they have the right to freeze the customer’s account even without getting a court order.
2. Debt owed
A creditor through a court order can have your bank account frozen over unpaid debt. You can also see this as an account that is garnished.
This case is usually very rare to see because the court or your creditor will notify you of their planned action before going ahead to freeze your account.
So in the case that you didn’t settle with the creditor, through the court order, your bank account will be frozen.
Embezzlement or misappropriation of funds is another major reason why bank account get frozen. If you work in a big firm or maybe had a big position under the government, if there’s a case of embezzlement or misappropriation of funds, your account will be frozen.
I’ve seen lot’s of bank accounts get frozen because of misappropriation of funds and this usually comes with a court order.
These are some of major reasons why a customer’s bank account get frozen.
Then the question is:
How long can a bank freeze your account for suspicious activity?
It can be painful seeing your account get frozen especially if you have huge sum amount of money in it. It can be a real night mare to the account holder.
Bank account can be frozen forever and the customer will never have access to the money in the account or do any transaction using the account.
When an account gets frozen, it is left for the bank customer to first understand the reason why the bank freezed his or her account.
Having know the the reason for that, it is left for the bank customer to fight and appeal for the bank to unfreeze the bank account.
In the case of bank account frozen due to suspicious activity like money laundering or internet scam, and misappropriation of funds or embezzlement, the customer might not have access to the bank account forever.
Unless there is a court notice that such was a false allegation against the bank customer and bank will reverse their action and unfreeze the customer’s account immediately.
So this question how long can a bank freeze your account for suspicious activity depends on the bank customer. But all things been equal and if the customer’s gets it right in court, it can only take a day and your bank will unfreeze your account.
In the case of unpaid debts, your account will be unfrozen only if you have paid all the debts owed to your creditor.
The creditor will have to notify the court that you’ve cleared your debt or made a settlement with him, and afterwards the court will order your bank to unfreeze you bank account .
In the case of unpaid debts, it is recommended that you sort it out immediately with your creditor before court order to freeze your bank account.
There are some case whereby the bank won’t notify you that your account has been frozen, you’ll only get to know if you try to perform a transaction on your account and it won’t go through.
In this type of situation, kindly contact your bank and request that they should tell you the reason for such action. From there you’ll know the next action to take based on what the bank told you.
In the case of misappropriation of funds, you will have to sort it out with your company and after that get a court order that you’re not guilty of what is levied against you. With the court order, the bank will unfreeze your account immediately.
In most cases of embezzlement or misappropriation of funds, the company using the court order transfers the said amount of money from the account holder to the company’s bank account.
Again how long can a bank account be frozen?
It is left for the bank customer whose account is frozen to take action. If you’re fast about it, the bank will unfreeze your account under few hours.
But note that if you didn’t take any action, the bank account can be frozen forever and you won’t have access to the money in your account.
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With these you have understood what a frozen account is in banking and also how how long can a bank freeze your account for suspicious activity.