Have you ever tried to make a withdrawal or transaction and suddenly found that you had a blocked account?
This can be very stressful if you have an urgent transaction to make and you have no idea why your account was blocked.
Unfortunately, blocked accounts are actually a very common occurrence. But, they can be prevented.
The good news is that in many cases, it can be relatively simple to get your account unblocked. You just need to know the right steps to take.
Read on in this guide to blocked accounts to learn what to do if your account is blocked and the measures you can take to prevent your account from being blocked in the first place.
Note: You might want to consider opening a second bank account offshore to make sure you always have access to your money. To do so, you will need to understand the process of how to open a bank account as a non-resident. Including knowing which account opening requirements you are able to meet.
KEY TAKEAWAYS
- There are a variety of reasons why you can experience a blocked account
- Important steps need to be taken to re-activate a blocked account
- Restrictions on using an account can apply to a blocked account
- You can prevent a blocked account from happening with the right information
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- Why Do I Have a Blocked Account?
- What Are the Reasons for Having Accounts Blocked?
- What Are the Restrictions of Using a Blocked Account?
- How to Re-Activate Blocked Accounts?
- How to Prevent a Bank Account Freeze?
- Frequently Asked Questions
- Do You Want Help Opening Bank Accounts?
Why Do I Have a Blocked Account?
You may find yourself with a blocked account for one of many reasons. Some of these include having bank activity that has been flagged as suspicious, being involved in a lawsuit, having unidentified third-party transfers, and more.
Unfortunately, a blocked account can happen without any notice. This can be especially frustrating if you took the time to find a bank offering higher interest rates, just to have the account closed. That said, you can avoid this happening to you by taking the right precautions and knowing which steps to take to get it resolved as quickly as possible. More on this below.
In this article, we’ll discuss the steps you should take to re-activate your account if it ever does become blocked. We’ll also share the many reasons why blocked accounts happen and what restrictions may apply.
Of course, we’ll also share helpful tips on how you can avoid having your account blocked unexpectedly, especially if you want to keep your bank account while moving abroad. And what you can do to prevent a blocked account from halting your life.
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What Are the Reasons for Having a Blocked Account?
Banks aren’t the only institutions that can block an individual’s account.
In fact, creditors, the government, and even a judge can all block both residents’ and foreign non-residents’ accounts. And sometimes, without any notice.
But why?
Well, for many reasons.
Reasons for Having a Blocked Account
- Bank suspects illegal activity (i.e. money laundering)
- Failed to follow internal bank regulations and policies
- Failed to provide documents to support unusual transactions
- Bank suspects your account is at risk
- Court judgment has been filed against you
- Transactions have been made between an unidentified third party
- In the middle of divorce preceding where the judge rules limits on account use
- You owe a large sum of money to creditors
- Accessing bank services from unusual locations
- Unpaid taxes or student loans
- Multiple failed online login attempts
- And more…
As you can see, there are many reasons foreign non-residents can experience a blocked account. And, it doesn’t necessarily happen just because the bank suspects illegal activity.
In fact, a blocked account can be a result of not making a transaction for a long period of time. Or, because you owe the government money due to unpaid taxes.
But, that’s not all.
In some countries, these can be standard procedures. In Germany for instance, non-residents interested in studying in Germany are required to deposit 10,000 euros into their German bank account upon applying for a student visa. These funds are then blocked in the account until the student arrives.
This is done as a means of ensuring that the students can support themselves during their first year of studies.
Again, blocked accounts can happen for many different reasons. The big issue here is that if you do the wrong thing after your account is blocked, you can risk having your account closed permanently.
So, before you do anything, it’s key to find out why your account was blocked in the first place. And then determine what restrictions have been put on your blocked bank account.
More specifically, what you can and cannot do with the account moving forward.
With this in mind, let’s look at what you may be restricted from doing now that your account has been blocked.
What Are the Restrictions of Using a Blocked Account?
As mentioned above, a blocked account can be enforced by a financial institution, a creditor, or a judge. And, depending on who the enforcer is, the rules and regulations of what you can do next will differ.
But, before we get into the specific next steps you should take, you need to understand which functions you are restricted from doing. This way, you can avoid the possibility of the bank permanently closing your account.
So, with that said, let’s look at some of the restrictions…
Possible Restrictions of Using a Blocked Bank Account
- Unable to withdraw funds
- Unable to deposit funds into the account (depends on the reason for the blocked account)
- Weekly or monthly spending limit
- Unable to transfer funds between accounts or other banking institutions
- Restrictions on foreign exchange controls
- Unable to access online banking
- Debit & credit cards can become inactive
Again, these restrictions will depend on the reason for your blocked account.
That said, these restrictions can have a large impact on whether or not your account can be fully re-activated.
And, if you fail to follow the right procedures, your blocked account can become permanently closed. As a non-resident, this can later be an obstacle to re-opening a bank account elsewhere.
So, if the bank blocked your account, it’s crucial to find out what restrictions are on your account so that you can avoid breaching them. This way, you’ll lower your chances of having your account closed permanently.
Now, if you’re unsure what steps you need to take to reactivate your account, we’ve got you covered. More on this below.
How to Re-Activate Blocked Accounts?
Each non-resident individual will have a different experience. For instance, the steps you take to reactivate your account may be different from someone else.
But, generally speaking, there are a few general steps most non-residents can follow to get a blocked account re-activated.
Step 1: Contact Your Bank Account Provider
The best-case scenario is that the bank mistakenly blocked your account and they will re-activate it as soon as you contact them.
So, the very first step you should take when you’re faced with a blocked account is to contact your bank immediately.
When blocking your account, some banks may not give you any advanced notice. Or they may notify you through a written letter that can arrive a few days after the fact.
As soon as you discover that your account has been blocked, you want to contact your bank right away and ask why they’ve blocked your account.
Don’t hesitate to ask specific questions, including the following:
- Was there an unusual transaction made with an unknown third party?
- Did I send money to a country the bank deems suspicious or high-risk?
- Did I receive money from another party that the bank views as suspicious?
- Are there any abnormal transaction patterns that are different from my day-to-day activity?
- Did I try to log into my account online in another country too many times?
- Did I fail to submit the documents requested from the bank?
- Is my account information not up to date or fully verified?
- Does the bank suspect any fraudulent activity?
- Does the bank suspect I may be a victim of fraud?
- Did I exceed my daily or monthly transaction limits?
By asking these questions you’ll be able to determine whether or not the bank made a false accusation and you can work to clear things up.
Now, in addition to asking why you have a blocked account, it’s also important to ask what restrictions have been put onto your account. This will allow you to not create any more stress on the account.
Step 2: Remain Patient
Communicating with your bank can sometimes be frustrating. Not to mention, time-consuming. It can often take a few days before the bank responds to your concerns or questions.
So, it’s important to remain patient and to not touch the bank account until you have more details.
Do not try to make any more transactions, which could get your account flagged again and could possibly lead to having it permanently closed.
If you’re going through a divorce and a judge blocked your account, it’s best you speak directly with your lawyer to determine the best solution for you.
Step 3: Submit Supporting Bank Account Documents (If Needed)
If the bank has flagged a particular transaction that you know is not suspicious, your next step will be to submit supporting documents to show the sources or reasons for the transaction.
In most cases, this will be sufficient to have your account reactivated.
But of course, in some cases, your bank may not consider the supporting documents adequate and may still suspect suspicious activity. If this is the case, the bank can freeze your account and restrict you from making any transactions until further notice.
If this happens, do not panic. You still have a chance to rectify the situation, but at this point, you’ll likely need to visit your bank in person.
Step 4: Visit the Bank
If for some reason the bank refuses to re-activate your blocked account even after submitting the proper documentation, your next course of action should be to visit your bank in person.
Of course, this may be easier said than done if your bank is abroad. But, if you’ve exhausted attempts to restore your account virtually, this may be the only option left to get full access to your account back in a timely manner.
Most banks are still quite old-fashioned and place great weight on in-person visits in order to fully verify a client’s identity. This also allows you to personally explain the reason for the flagged transaction.
So, although a physical visit may be expensive and a hassle, it is definitely the most effective way to resolve a blocked account.
Though the specific approach you take will vary depending on your specific situation, it is always your best bet to speak to your banker face to face.
Next up, the best way to deal with a blocked account is to take steps ahead of time to prevent a blocked account from ever happening…
How to Prevent a Bank Account Freeze?
A Blocked account (or bank account freeze) can be a tremendous hassle and inconvenience. So it’s always prudent to take steps to protect yourself from having your account blocked in the first place.
Ways to Prevent an Account From Being Blocked
- Choose to open with a stable banking jurisdiction
- Don’t go a long period of time without making a transaction
- Diversify your money across multiple banks (and countries)
- Advise your bank of an unusual transaction or deposit
- Advise your bank if you’re traveling out of the country
Of course, you can only do so much when it comes to protecting yourself from experiencing a blocked account.
Unfortunately, it is still possible for you to have an account blocked even if you follow all the guidelines.
So, while it’s important to follow these precautions, it’s also crucial you have a backup plan. For instance, one of the smartest things you can do is to diversify your assets across multiple banks and safe banking jurisdictions.
By diversifying your assets across banks and jurisdictions, you can ensure that you always have access to your money. Even if one account becomes blocked or closed, you will still be able to access funds in another account
If you’re looking for more information on how to diversify your accounts, read on.
Frequently Asked Questions on Accounts Being Blocked
Below are two of the most common questions we receive from people exploring the reasons for a blocked account. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.
How Do I Fix a Blocked Bank Account?
The steps you take to fix a blocked bank account will depend on the reason why your account was blocked in the first place. For example, if your account was blocked due to a suspicious bank transfer, you will need to provide the bank with supporting documentation on that specific transaction.
What Is a Blocked Cash Account?
A blocked cash account is a bank account that has been frozen by the financial institution. In other words, the account holder is unable to access the cash in the account for a period of time.
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