Released: April 12, 2023

Banks are closing customer accounts, with little explanation

Source: Ron Lieber & Tara Siegel Bernard, N.Y.Times (Paid Registration)

Besides an overall rise in fraudulent activity, several factors could be behind the increase in Suspicious Activity filings — more alerts from government officials tipping off banks to specific activities, increasingly sophisticated technologies to detect them and more regulatory scrutiny. Yet most of the time the customers are probably innocent.

Banks can close a customer’s account for any reason, at any time, a point that is buried in the fine print of its customer agreements. When they do dump an account, it’s usually because they’re trying to protect the institution (or the customer) from a potential fraud.

 

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