Who is at Risk for a Frozen Bank Account?



Most people have heard of frozen bank accounts but do not know why they exist. There may even be a slight fear that their bank account may be frozen at some point. Others are not sure what it means when an account is frozen. These are the people who do not have to worry about this measure by the bank to protect itself and hinder others. Those who run the risk of this occurring to them know and understand the risk all too well and yet still decide to participate in activities that can cause this to occur. Discovering what the term details can be an enlightening experience for those who do not understand it and are still concerned for their business or personal finance.



A frozen bank account occurs when the bank locks access to the account. No money can go in or out of that account. This is different than closing an account because the account was in good standing previous to this and still has money in it when frozen. The bank can freeze an account, but the United States government is responsible for most frozen accounts. In addition to the accounts being locked, there are times in which property will be locked and unable to be accessed. This property may not be sold at this time or used. This can include businesses and private property such as the home. It is less common that property is frozen than other accounts.

Freezing an account is not taken lightly. There has to be evidence that freezing an account should be done. In most cases the frozen bank account is that of a known criminal who has used criminal means to garner the money that is in the account. The account may also be used to conduct illegal business, which is considered laundering the money. This is illegal.

The Bank Secrecy Act of 1970 requires the banks to disclose information regarding any potentially illegal actions being done through their accounts. These accounts are required to be noted as frozen bank accounts pending investigation. The banks may face tough fines if illegal actions are discovered that they did not notice or report. The discovery of illegal actions through the bank may be difficult for a bank to determine and is typically discovered by sudden or unexplained increases or decreases in the account to or from accounts that also appear to be suspicious in nature. In these cases, the bank may request that the account holder discloses the nature of the business or finances and explain the fluxes.

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