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Imagine attempting to use your debit card for a purchase or withdraw money, only to discover that your card is declined, your transaction rejected, and you’re unable to access your funds. According to The New York Times, more and more banks are shutting down customer accounts without prior warning or approval—and often, without clear explanation. Customers aren’t even legally entitled to be informed when this happens, which means some only realize their account has been closed when they are unable to make purchases or access cash. While fraud and suspicious activity may be potential reasons, there is no concrete data tracking exactly how many accounts are being closed or the exact causes behind these closures.
How to Safeguard Your Bank Account from Unexpected Closures
The Times report highlights several actions that might raise suspicion with a bank's fraud detection team. One factor is the frequency and size of your deposits and withdrawals. Federal law mandates customers to complete a form for any transactions exceeding $10,000, and attempting to avoid this paperwork by reducing the amount may be seen as questionable. Additionally, making large cash deposits at ATMs or numerous high-value transactions within a short timeframe may trigger a red flag. While such activities might be perfectly legitimate—such as working in a cash-based job—the bank may not view it that way.
Banks may flag accounts for closure if there's a prolonged period of inactivity or if there are frequent overdrafts or negative balances. The use of checks can also raise red flags for banks due to the rise in check fraud, as can violating account terms (such as using a personal account for business transactions).
Given these potential risks, here are a few steps you can take to avoid having your account closed:
Maintain open communication with your bank. If you are making unusual deposits or withdrawals, transferring large sums of money, or going through significant financial changes (like moving, buying a home, renovations, or traveling long-term), inform your bank ahead of time.
Carefully review all bank communications. Always open and read all notices you receive. Be cautious of fraudulent texts, calls, or emails. If contacted by someone claiming to be from your bank, always verify their identity by calling the bank directly or sending a secure message via their website or client portal.
Monitor your account activity closely. Set up alerts for transactions and low balances, and regularly review your statements, deposits, and withdrawals.
Reduce check usage. If possible, avoid mailing checks to minimize the risk of fraud, or take steps to protect your checks from being tampered with.
What to do if your account is suddenly closed
If you’ve taken preventive steps and your bank still closes your account, contact them immediately and inquire about how to regain access to your funds. If possible, visit your bank's local branch in person. Communicate calmly yet assertively. In some situations, such as with dormant accounts, you may need to visit your state’s unclaimed property office to recover your money.
Next, ensure you stop direct deposits and automatic payments (like bill pay) and reroute these transactions to another account you can still access. If possible, ask the bank to reopen the account or explore alternative solutions, and consider switching to a different bank if necessary.
If you believe your account was closed unjustly, you can file a complaint with the federal Office of the Comptroller of the Currency.
