It is legal and not uncommon for a bank to freeze a customer’s account without first notifying the account holder.  The bank may freeze an account due to suspicious activity, because the account has been frequently overdrawn, or the bank has received legal orders from a third party.  A bank account freeze means the banks has restricted activity with the account.  The account holder will generally no longer be able to withdraw money, pay checks, make financial transfers, or otherwise use the funds held in the account. 

Third party orders or instructions that require a bank to freeze an account may include court judgments from a creditor with a levy or garnishment order or orders presented by state or federal agency such as the IRS.  In all of these situations, the bank is not required to notify the account holder when the account will be frozen.  Accounts that are frozen due to legal action cannot be delayed by the bank so they can inform their customer when the legal levy or garnishment order is delivered. 

Actions a bank may take to freeze an account on its own are usually put in place to protect the customer or the bank and therefore, taking time to time to notify the customer in advance may defeat the purpose in trying to protect the account funds.  The bank may freeze the account to protect the customers in cases where there is suspicious account activity in which the bank believes transfers or payments are being made that are not authorized by the account holder, or the freeze may be to protect the bank in cases where the account is frequently overdrawn that may lead ultimately to an uncollected balance that results in losses for the bank.

Once the bank does place a freeze or holds funds in an account, the account holder should be able to get a complete explanation regarding the reason and any paper work related to the actions from the financial institution.

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