Naafeh Dhillon had just left the holiday light show at Saks Fifth Avenue in New York when he learned that all of his bank accounts had mysteriously gone dark. After the show, Dhillon, his girlfriend and some friends escaped the cold and had dinner at a French bistro — but when it came time to pay the check, his credit card was declined. His debit card was rejected next. It had to be some sort of mistake, he figured, because he had plenty of money in his account. Sign up for The Morning newslette
Some people are suddenly losing access to their bank accounts without any warning, but it is often unclear what activity was flagged as suspicious.
Since he wasn’t given a specific reason for the closure, he couldn’t disprove whatever raised suspicions in the first place. “It was almost like getting a scarlet letter,” he added.With fraudulent activity on the rise and exploding during the pandemic, some banks are taking an even harder look at their customers’ transactions — and closing their accounts when they feel that it’s necessary.
Besides the overall rise in fraudulent activity, several factors could be behind the increase in filings — more alerts from government officials tipping off banks to specific activities, increasingly sophisticated technologies to detect them and more regulatory scrutiny. Later that evening, he finally unearthed the bank’s Dear John letter: “Financial institutions have an obligation to know our customers and monitor transactions,” it said. “After careful consideration, we decided to close your accounts because of unexpected activity on this or another Chase account,” according to the Nov. 15 letter, which said the accounts would close Dec. 14.
After The New York Times called Chase on his behalf, he received another call from the bank, which had opened an investigation. A representative later told him that they “couldn’t confirm any wrongdoing” on his end. These employees may decide to close the account and cut their losses — and they may file a SAR to the federal government. They may also do just one or the other — or neither, after speaking to the customer.
It’s a delicate balance. Banks want to avoid being overly aggressive, which could disenfranchise immigrant communities and others who may have difficulty getting traditional bank accounts. They’re also supposed to be in the business of customer satisfaction. Besides regulators and customers, banks need to answer to their own shareholders — and they need enough satisfied customers with profitable accounts to make them happy.
“They said your account has been suspended for further review,” said Zolecki, 47, who lives in Media, Pennsylvania. Why? “We can’t tell you that. The only thing we can tell you is it can take up to 60 days for this review.” “But there was never any acknowledgment that a Synchrony rep told me I would have no problem making that transfer in the first place,” he said, adding that he would simply have waited. Within minutes of his speaking to the rep, on Jan. 27, the account was reactivated.
The diversification strategy can also be useful if you worry that banks might not like your crypto trading or Only Fans side hustle and shut everything down, no questions asked.
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