US banks are slamming the doors on innocent customers with zero notice, according to a new report.
Supposedly suspicious activity is triggering abrupt account closures, leading to customers to discover something is wrong then they try to spend their money, reports the New York Times.
One such member of Chase named Naafeh Dhillon tried to pay for dinner in December and had both his credit and debit cards declined.
When he called the bank, a support agent said Chase had let him go, and a notice should be in the mail.
The cause? “Unexpected activity.”
When he visited the bank, Chase cut Dhillon a cashier’s check for his balance with no further explanation.
Dhillon has been lawfully living in the US since 2013, and his family in Pakistan had regularly wired him money since the day he arrived in New York.
Such bank account closures appear to be connected to efforts to catch illicit activity.
New research shows various types of fraud are on the rise at financial institutions across all payment types.
But, as the Times notes, the Banking Policy Institute says just 4% of Suspicious Activity Reports (SARs) submitted by banks to law enforcement result in a follow-up, and an extremely small number of the follow-ups results in arrests and convictions.
After the Times contacted Chase, the bank launched an investigation, and representatives later said they could not confirm that Dhillon had done anything wrong.
In 2014, US law enforcement agencies slapped Chase with more than $2 billion in fines for violating the Bank Secrecy Act and failing to report suspicious activity connected to the infamous scammer Bernie Madoff’s billion-dollar Ponzi scheme.
Chase has paid more than $36 billion in fines for financial offenses, employee offenses, competition violations, toxic securities abuses, mortgage abuses, anti-money laundering deficiencies and additional violations since 2000, according to the financial violations tracker from Good Jobs First.
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