Your bank account can be frozen for a number of reasons, but the most common are suspected fraud and unpaid debt. And if it happens while you’re overseas, it could put you in a tough situation. In any case, you’ll need to contact your bank or creditor in order to get your account unlocked.
The main reasons why bank accounts can be frozen are unpaid debt and suspected fraud. The steps taken to freeze your account and the process to get it unfrozen will vary based on the reason it was frozen. The 3 main causes of your getting frozen are:
Keep in mind that no matter what the cause is, if your bank account is frozen, no money can leave your account. So any automatic withdrawals from your account will likely bounce, and you could be charged NSF fees.Whether you’re on home soil or overseas, you’ll need to contact your bank as soon as possible if you need to unfreeze or unlock your bank account. Most banks will require you to call in to verify your identity, as opposed to going online to fix the problem. If you’re overseas, try using Wi-Fi calling or a landline to avoid international roaming charges from your cell phone company.
The same principle applies here – communicate with your creditors. By contacting them, you’re helping to prove that you intend to pay your debt. You can contact your bank to find out which company has frozen your account. Once you’ve worked out a payment schedule with you’re creditor, it’ll likely unfreeze your account.
In the meantime, you could consider opening up another bank account with a different bank and arranging to have your paycheck deposited there. That way you’ll still have access to your money, even while you sort out your finances with your lender.
Banks need to be more vigilant than ever to protect their customers against fraud. As part of this protection, banks have systems in place to monitor customer accounts for any suspicious activity.
One common reason a bank may freeze your account is because of errors when you tried to log in to your online banking or mobile app profile. If you’ve used the wrong password too many times, your account may be locked for a few minutes.
In that case, simply wait until you can attempt to log in again, and retry your password. If you continuously enter the wrong password, your account might be locked indefinitely, which would require you to call your bank to get it unlocked.
Your account may also be locked if you enter any incorrect information while attempting to reset your password. Again, you’ll likely need to call your bank directly to sort out any issues.
Cashing bad cheques, making unusual purchases or large deposits and having inaccurate personal information can lead to your account being flagged. Banks also look out for small purchases that are immediately followed by large ones, as thieves often use small purchases to test an account before buying what they want.
Banks also sometimes track fraud by location. For example, let’s say you use a credit card in one city and 1 minute later a debit transaction from your account occurs in a city many miles away. The bank may assume that one of those transactions was unauthorized since you can’t be in two places at once. In that case, your account may be frozen.
When your credit or debit card is used to make a purchase in a different country without warning, it can be a sign that it was stolen. To protect your account, your bank may freeze it until you can verify your identity and confirm the card is in your possession.
Banks are always on the lookout for suspicious activity, so you should take precautions to avoid having your account frozen by accident.
Avoid making unusually large deposits or purchases, make sure all cheques you cash are legitimate and keep your personal information up to date.
Additionally, try not to stray too far from your usual spending habits; if you usually spend $10-$20 per day on your debit card, suddenly buying a series of luxury items or shopping in expensive stores could raise suspicion.
To keep your account from being flagged for potential fraud while traveling, let your bank know where and when you plan to travel before you leave. You can do this by calling your bank, visiting a branch or using the online platform or mobile app. However, bank security algorithms are constantly improving to recognize travel transactions, so some banks no longer require you to call in advance. Always be safe and check with your bank to find out what information they require from you.
You can also provide details of the best way for the bank to get in touch with you while overseas. You can log back into Internet banking at any time, even if you’re already overseas, to make changes to your travel plans.
Creditors, including the government, just want to know they can get their money back eventually. So if you know you can’t make a payment, then call them immediately to let them know and possibly arrange an alternative payment schedule. They often make provisions for people struggling to make debt repayments, and by communicating, you’re showing them you plan on repaying the debt. Usually, a creditor won’t take steps like freezing your account, if you’re in constant communication with them about your financial situation.
In some cases, you might have to consider filing a consumer proposal or declaring bankruptcy, if you know you won’t be able to repay a debt.
Whether you’re going on an upstate road trip or taking a vacation overseas, here’s how you can easily and affordably handle your money while traveling:
If your account is frozen for any reason, you should immediately call your bank to speak to a customer service representative. In most cases, you’ll be able to verify your identity and get your card unlocked almost instantly. And if you’re not happy with the customer service you’re getting, compare other bank accounts so that you don’t have to deal with this next time.
Compare these alternatives to Chase Bank in Canada and find the right account to manage your money.
We compare EQ Bank and Wealthsimple head to head to see how their banking products and services stack up against one another.
Your guide to the 7 of the best Tangerine alternatives in Canada.
New to BMO? Check out these bonus offers and see if you can save more with promotions and deals on now.
Earn cash, rewards points, bonus interest rates and more with these new bank account offers and promotions.
Read Finder’s BoC Interest Rate Report for forecasts from some of Canada’s brightest minds in economics and learn more about how recent rate increases could affect Canada’s real estate market.
Earn high interest rates and get unlimited free transfers when you sign up for an account with this innovative online bank.
Discover and compare a range of personal and business financial products from the largest banks in Canada.
The pros and cons of opening a bank account with multiple joint account holders, and how to choose an account.
From e-transfers to mobile apps, we explore all of the ways to send money to a bank account.