Bad guys aren’t the only ones who get their accounts’ frozen.
Even if you’re doing everything right, Chase Bank may lock your accounts one day; on accident, or on purpose.
There are nine reasons why they may do so:
- Check Kiting
- Money Laundering
- Terrorist Financing
- Writing Bad Checks
- Unpaid Debts to Private Lenders
- Unpaid Debts to the Government
- Cosigner Has an Issue
- Suspected Fraud (For Your Protection)
- An Account Owner Has Died
Why Chase Bank Would Freeze Your Account Over Check Kiting
The first entry on our list is a pretty serious offense. Check kiting is a simple, but illegal thing that will get your account frozen and probably closed down.
Check kiting occurs when you have multiple accounts across separate banks.
- You would write yourself a check from your account at Chase Bank to your account at Bank of America.
- You write $5,000 on the check, even though you know you only have a balance of $1,000 at Chase Bank.
- If Bank of America were to allow you to withdraw any of that amount as cash before the check as time to be processed, you’d have committed check kiting!
Many banks allow you to withdraw some of the funds from your checks before they have cleared. There’s nothing wrong with this practice, so long as you can ensure that the funds will be there.
For the first 90 days you have your account, Chase Bank will only ever allow you to withdraw up to $100 in cash from any check you deposit the same day you deposit it. After your account has been with the bank for over three months, they may increase your same-day availability to $200.
They don’t explicitly say how or when, but if your account has been in good standing with Chase Bank for a decent amount of time, they will increase your same-day availability to $500! While most checks only take one business day to clear, getting $500 the same day you deposit a check can be a game changer for a lot of customers.
Check kiting is illegal, and every bank in America communicates with each other to ensure they stop it while it happens or even before. If Chase suspects this of you, they may freeze your account while they try to get a clear picture of the situation.
Feel free to reach out to their customer service hotline at 1 (800) 935-9935 to try and get your account back up and running.
How Suspected Money Laundering Could Get Your Account Locked By Chase Bank
Money laundering is another serious offense Chase is constantly on the lookout for. As a former banker for the blue bank, I can say firsthand that Chase Bank employees go through extensive training to spot fraudsters before they conduct their business. I was personally trained for weeks on how to spot suspected criminals, learning what their account activity looks like and what else they’re looking for in a bank.
If you don’t know, money laundering is when someone, usually a criminal or terrorist organization, tries to hide the source of their income.
If I can give an example, money laundering may look a little something like this: a seller of illegal contraband may give their profits over to a business partner who owns a legal enterprise, like a laundromat. Because illegal business usually don’t accept Apply Pay, the contraband seller will have cash to give to his literal partner in crime. The laundromat owner would then go to their local bank and deposit the cash — masked as profits they made doing legal business!
Banks and the US government take money laundering incredibly seriously. Chase Bank, as well as every other American bank, must conduct a Currency Transaction Report (CTR) anytime they get a deposit over $10,000 in cash.
When I say anytime, I mean anytime. I worked for Chase for many years, and we would often have business customers who would come in and deposit relatively similar amounts on a consistent basis. Even though Jose comes in every Thursday to deposit his restaurant’s cash profits, I would have to ask him the same set of questions because it was above $10,000.
As you can tell, this system isn’t perfect and Chase may freeze your account on accident, due to some potential red flags your account may have that you didn’t even know about. Luckily, the back office of Chase Bank understands that their automated computer system can flag the wrong accounts at times, so it’s always easy to work with them and get your accounts unfrozen.
Why Chase Bank May Freeze Your Account Due To Terrorist Financing
Yet another incredibly serious offense, Chase Bank will freeze your account immediately if they suspect any possible terrorist financing to be on your books. Terrorist financing is exactly what it sounds like — sending money or collecting money for terrorist purposes.
This one is a little more subjective. I remember during my time as a banker, we were the frontline of defence against terrorist financing. Chase employees are trained to spot this activity, and if they do they are instructed to file an Unusual Activity Report, signaling to the back office that something is wrong.
If your account is frozen, it is unlikely it is for terrorist financing.
Why Chase Bank May Freeze Your Account For Writing Bad Checks
Check kiting isn’t the only way wrongdoers can manipulate checks. By writing bad checks, or checks drawn from an account that has little to no funds, you can deceive people into accepting a form of payment you don’t actually have.
In most cases, if a Chase Bank customer were to write checks from an account that can’t support it, the checks will be returned and Chase will charge a $12 returned item fee. If they see this happening on multiple occasions, Chase may consider freezing your account to both stop the returned item fees and the bounced checks.
When they suspect one of their customers to be writing checks in bad faith, they will usually send a letter in the mail to the address on file. The letter will either ask for the customer to speak with a banker in person or with the legal department, if the department hasn’t reached out already.
This is another offense Chase Bank takes very seriously. All banks do; all of the major American banks share a database of their customers and their respective history. They do this to try and stop fraudsters from opening more accounts and repeating the process with another bank.
I remember during my time as a banker, customers who had never had an account with Chase were getting declined during the application process. At first, I thought it was a mistake. There was nothing wrong with their information, yet they were being declined from opening a checking account with us.
Then, the customer would tell me that they actually had several unpaid accounts over at Bank of America, and didn’t think the banks communicated.
Turns out, they do.
Why Chase May Freeze Your Account Over Unpaid Debt to Private Creditors
Unpaid debts to private creditors was one of the most common reasons I saw Chase freeze accounts during my time there. All too often, one of my customers would have an old credit card they forgot about, or an old credit card they didn’t want to pay off! Private creditors are known for not caring too much about what you want, so they’ll go to a judge and get a court-order to garnish your wages!
Once the judge sees the outstanding debt and issues the court order, the private creditor in question then has the right to go to your bank and order them to freeze your account. Chase doesn’t process these orders for free either; legal processing fees start at $75! Not only will the private creditor be taking wages from your account, Chase will charge you for facilitating the arrangement.
Once the legal fee is processed, and the garnishments begin, the account should be unfrozen on its own. If not, a banker should be able to see the legal code on the account and connect you to the appropriate department.
Why Chase May Lock Your Account Over Unpaid Debt to the Government
Unpaid taxes are another reason why Chase may freeze or lock an account. The government, namely the IRS, is pretty diligent when it comes to getting their money back.
Just like private debt, a judge will first need to issue a court order to freeze an account. Chase will then charge a $75 legal processing fee before reaching out to you, informing you of the situation at hand. If you find yourself in this position, understand that Chase Bank has nothing to do with it. It is illegal to not comply with the government, and Chase Bank would very much like to not conduct illegal activity.
Why Chase Bank May Freeze Your Account Because of the Cosigner on Your Account
Just because your account is frozen doesn’t necessarily mean you have a problem. Your cosigner may have an issue, resulting in Chase Bank blocking even you from accessing the account.
It doesn’t matter how many owners an account has. If Chase Bank sees a problem with one owner’s activity, they will lock the whole account to investigate. The worst part is, you may not even be able to learn what the problem is. Legal incidents are treated with the utmost privacy, if you’re not involved directly chances are Chase can’t tell you why they froze your account.
During my time as a banker, there were several times when a customer would come to me, asking me questions as to why their account was frozen. I would get their ID and pull them up in my system. My computer would show that their account was frozen, but the only thing I could do was guide them to our legal department. The screen would tell me exactly why the account was frozen, but it would also tell me I could only communicate that reason to the specific account owner that was involved.
Only open bank accounts with people you trust completely. Just because you’re not directly involved in illegal or even suspicious activity doesn’t mean you can’t be affected by it.
Why Chase May Lock Your Account Due To Suspected Fraud
This is one of the few times you might be happy Chase Bank locked your account. It stinks, but there are many scammers out there looking for opportunities to steal money right out of your bank account. Chase is aware of these fraudsters, and will freeze your account in an attempt to stop the fraud before it happens or before it gets worse.
If your account has been frozen, but you don’t think you’ve done anything wrong, check your transaction history. Sometimes, very small transactions of less than $10 can go by without you even noticing. If Chase notices a pattern of these transactions from a source they don’t recognize (usually someone overseas), they will freeze your account to stop allowing any more to go through.
If this has happened to you and you’re wondering how you can get your money back and reopen your account, you have two options based on how the fraudsters accessed your funds:
1. By Debit Card
If the fraudsters accessed your account through a compromised debit card number, you’re in luck. Well, not totally in luck as someone may have stolen your debit card number but fixing this problem is easy.
- First, head into your local branch and talk to a banker or call 1-(800)-935-9935 and handle it over the phone.
- Next, you’ll want to tell the bank representative exactly which transactions you didn’t authorize.
Chase doesn’t charge their customers for any transactions they didn’t authorize. They’ll work hard to get your money back, especially in cases of objective fraud. After you have placed a claim on the transactions you didn’t make, Chase will close your old debit card and issue you a new one with new numbers.
It can be a hassle updating card payment information, especially if you have several automatic payments set up, but this is a surefire way to ensure thiefs no longer have access to your funds.
2. By Account Number
The process of recovering your account if your account number was stolen is a little harder than just replacing a debit card. It does start the same as a stolen debit card, as Chase will freeze your account and reach out to you to see which transactions are yours and which are not. They will then ask you to come in and speak with a banker, as the bank office hotline can’t open an account over the phone.
During my time as a banker, if a customer had their account number stolen we would have to open a brand new account manually. That was an hour long process — IF the computer systems were working properly! Now Chase Bank has a handy account replacement tool if anything ever happens to yours.
All you have to do is head into your local branch. Your banker will be able to take care of everything and do it quickly. Chase’s account replacement tool generates a new account number and automatically transfers over any direct deposits you were getting. This will save a lot of time as you don’t need to inform anyone to change their payments
What you might have to do is change your automatic withdrawals. Anything that used to come from your account number on a recurring basis will have to be updated to the new account number.
Why Chase May Freeze or Lock Your Account if an Account Owner Has Died
Like number seven on our list, Chase freezing an account you’re on doesn’t necessarily mean you did anything wrong. Your cosigner may have passed away. It’s hard to handle deceased persons at a bank. On one hand, Chase Bank’s policy is to handle everything through the account holder directly. On the other, if that person is deceased, who is Chase to do business with?
This is one of the rare times when you can affect an account you’re not on. If your spouse were to pass away and they had their own accounts at Chase Bank, you could inform the bank of their passing verbally and Chase would freeze their accounts. With the death certificate, Chase will release the hold and disburse the funds appropriately.
This can be a tricky situation, as literally anyone can report that you’ve died. I can call Chase Bank right now, tell them that Janet Smith in Oklahoma has passed, and they will freeze her account. I don’t know a Janet Smith, and unfortunately I don’t need to to freeze an account.
As a former banker, I’ve had “deceased” clients come into the bank to ask why their account has been frozen. You can imagine my surprise when our system would read that the very person sitting in front of me, the one I identified, was declared deceased in our system!
It doesn’t happen often, but if your account is frozen and you’ve exhausted all normal options, call your banker and see if you’re still… alive.
Chase may freeze your bank account to protect you, themselves, or to reclaim unpaid debts.
If you find yourself locked out of your account, it may not be your fault. It could be an error, and to find out you can either call your local banker, head into the branch, or call the hotline at 1-(800)935-9935.