Frozen Funds Fiasco: US Banks Close Accounts Without Warning
The closure of customers' accounts and freezing of withdrawals by US banks is on the rise, as per a recent report by CBS Los Angeles.
Instances of sudden account closures have been reported, leaving people without access to their funds.
For example, Elad Nehorai faced an alarming alert while logging into his Bank of America account. Upon visiting a branch in West LA, he was informed that his account had been shut down, depriving him of access to his life savings. Bank of America provided no immediate explanation but promised to resolve the issue and return his funds, which left Nehorai in a state of financial distress, unable to provide for his family or meet expenses.
The standard reason cited by banks for such actions is suspicious behavior, leading them to submit Suspicious Activity Reports (SARs) to law enforcement. Surprisingly, the follow-up and subsequent arrests and convictions resulting from these reports are quite low, with only 4% leading to further action, as the Banking Policy Institute revealed.
However, the number of SARs submitted has seen a significant increase in recent years, with about 1.4 million reports in 2021, compared to approximately 830,000 in 2014.
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In Nehorai’s case, Bank of America mentioned that an FBI report triggered his account closure. Interestingly, Nehorai himself had submitted this report to the FBI, informing them of a scammer who impersonated him via email and tried to extort money from one of his clients.
Despite facing difficulties dealing with large financial institutions and feeling powerless in such situations, Nehorai’s plight is not an isolated incident. Many others have reported similar experiences of sudden account closures and the subsequent struggle to regain control over their finances.
As a result of media attention on the matter, Nehorai was granted permission to transfer his money to another account, although his Bank of America account remained closed.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
