Non-suspicious frozen accounts
Your account can also be frozen even if there are no suspicious activities. Here are some examples:
Outstanding debts to creditors
If you have a bank account and at the same time you owe funds to the same bank, they can automatically deduct the debt. This will pay off the outstanding loans without filing a lawsuit or court decision against you.
Company liquidation
If your company is in liquidation, and if the business is viable, the bank account may be frozen. This usually happens after receiving notice of the petition to avoid possible liability for debts accumulated during the bankruptcy.
Insufficient funds in your account
Accounts can also be suspended due to insufficient funds to make payments. Banks can also put a hold or block your card. In such cases, you need to either transfer funds, if available, into that account or arrange to repay the money.
Victim of a fraud
When a security breach occurs, the freeze on your account stands for your protection.
If your bank detects purchases that don’t align with your normal pattern, it may assume that your account was hacked or your wallet was stolen. They could put a temporary freeze on your account to keep your money safe. You might find out about this freeze while you’re standing at the checkout in a cashier or trying to make a purchase online. A security freeze can usually be unblocked with a phone call to verify you are the one making the purchase.
What are your rights when your bank account is frozen?
Finally, let's talk about your rights. If you're not a money launderer, a terrorist financier or fraudster, you have the right to receive adequate information on what's the reasoning behind your account freeze.
Once you’ve received a notification that your account has been frozen - either from a creditor company or from the bank itself. Either way, make sure to call your bank immediately or better go to the nearest bank branch to consult what the next steps are.
At this point, when you start the conversation with your bank, keep in mind two magic words: Cooperation and Transparency.Always be transparent and cooperate. You know your account activity is legitimate, so be transparent. Also cooperate by providing proof of the bank activity.
Remember that just as you need to be open and cooperative, on the other hand, you have the right to receive information on what is happening with your bank account.
If you can prove that there is no reason to freeze, the bank will certainly lift up the restrictions by giving you full access to the account again.
What are the actions when accounts are frozen for security reasons?
As mentioned above, follow the principles of openness and cooperation. Typically, a conversation and re-verification of your identity by the bank's fraud department would lift the restrictions on your account.
If your identity was stolen, or account account hacked, the bank will guide you on how to report it. Please remember to always check your last bank statements in detail and trace transactions.
NOTE:There is a regulatory framework that imposes restrictions on how much money you can lose when your ID card is stolen. The latter depends on how the thieves gained access and whether you reported on time to the bank. It was estimated that the average cost of identity theft is 1,141.15 EUR for victims who had experienced a momentary loss.
How to proceed when you have unpaid debts?
Any bank account seizure is preceded by an effective court decision. A seizure is imposed up to the amount of the claim. In case your debt is greater than the balance on your account, the creditor can freeze it all. The different types of debts could be any kind of loans, judgments or liens from civil lawsuits, divorce settlements, child support, back taxes, among others.
The basic rule when your bank account is frozen due to debt or judgment is to find out who the creditor is. The bank must give you a notice with information about the debt and who is the plaintiff in the civil action against you. In this case, it is advisable to seek legal assistance, thus drawing up an agreement with the creditor to reschedule the debt through instalments.
We have written an extensive article on what to do if your credit card gets stolen and what are somebest practices to keep your credit card safein general. But in case your Payhawk card gets lost or stolen, you can freeze the card immediately from the app. You should contact your administrator and don't hesitate to contact our customer support.
As an expert in financial regulations, banking practices, and security protocols, I bring a wealth of knowledge to shed light on the intricacies of non-suspicious frozen accounts. My expertise is grounded in a comprehensive understanding of the financial industry, regulatory frameworks, and the dynamics of account management.
Let's delve into the concepts mentioned in the article about non-suspicious frozen accounts:
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Outstanding Debts to Creditors:
- If you owe funds to the same bank where you have an account, the bank has the right to automatically deduct the debt from your account without the need for a lawsuit or court decision.
- This measure is taken to settle outstanding loans and mitigate the bank's risk.
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Company Liquidation:
- If a company is undergoing liquidation, and if it is deemed viable, the bank may freeze the associated bank account. This is done to prevent possible liability for debts accumulated during the bankruptcy process.
- This action is usually taken after receiving notice of the petition for liquidation.
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Insufficient Funds in Your Account:
- Accounts can be suspended if there are insufficient funds to cover payments, leading to holds or card blocks.
- To resolve such situations, individuals are advised to either transfer funds into the account or make arrangements to repay the money.
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Victim of Fraud:
- In the event of a security breach, a bank may freeze an account as a protective measure.
- Unusual purchases that deviate from a normal spending pattern might trigger a freeze, and individuals are notified to verify their identity and confirm the legitimacy of the transactions.
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Rights When Your Account is Frozen:
- Individuals not involved in illegal activities have the right to receive adequate information about the reasons behind their account freeze.
- Open communication, cooperation, and transparency are emphasized when contacting the bank to address the freeze.
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Actions When Accounts are Frozen for Security Reasons:
- Openness and cooperation are crucial when dealing with account freezes for security reasons.
- Re-verification of identity by the bank's fraud department is a typical step to lift restrictions on the account.
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Dealing with Unpaid Debts:
- Bank account seizure due to unpaid debts requires an effective court decision.
- Creditors can freeze an account up to the amount of the claim, and in case of a greater debt than the account balance, the entire account can be frozen.
- It is essential to identify the creditor, receive notice about the debt, and seek legal assistance to negotiate debt rescheduling.
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Identity Theft and Regulatory Framework:
- There is a regulatory framework governing the amount of money one can lose in the event of identity theft, depending on factors like how the thieves gained access and timely reporting to the bank.
- The article notes an estimated average cost of identity theft for victims who experienced momentary loss.
By providing this detailed breakdown, I aim to offer a comprehensive understanding of the concepts surrounding non-suspicious frozen accounts, empowering individuals to navigate these situations with knowledge and confidence.
