Why Does Bank of America Close or Freeze Accounts?
Why Does Bank of America Close or Freeze Accounts?: Imagine logging into your bank account only to find it has been closed without warning. Frustrating, right? Bank of America, like many other financial institutions, follows strict policies when dealing with accounts that show no activity for an extended period. If your account is marked as “abandoned,” you may risk losing access to your funds.
So, how can you prevent this from happening? In this article, we’ll explore why accounts get classified as abandoned, what happens when they do, and most importantly, how to keep your Bank of America account active and secure.
Why Does Bank of America Close or Freeze Accounts?
Banks don’t just close accounts randomly. There are specific reasons why this happens.
1. Inactivity Over an Extended Period
If you haven’t made deposits, withdrawals, or other transactions in a long time, your account may be labeled as inactive. If inactivity continues, it can be reclassified as abandoned.
2. Unclaimed or Dormant Accounts
Each state has different rules for what qualifies as an abandoned account. Typically, if an account remains inactive for 3-5 years, the bank is required to turn over the funds to the state under unclaimed property laws.
3. Suspicious or Unusual Activity
If Bank of America detects fraudulent transactions or violations of their policies, they may freeze or even close your account.
4. Failure to Update Personal Information
Banks need up-to-date contact information to reach you. If mail is returned or emails bounce, your account could be flagged.
5. Violation of Bank Policies
Accounts involved in suspicious transfers, fraudulent activity, or violations of banking agreements are at risk of closure.
How to Prevent Your Bank of America Account from Being Classified as Abandoned
Now that we know why accounts get closed, let’s focus on how you can keep yours active.
1. Make Regular Transactions
The easiest way to keep your account from being flagged as inactive is by making regular transactions.
- Deposit or withdraw money at least once a year.
- Use your debit card for purchases.
- Set up automatic transfers to or from the account.
2. Enable Direct Deposits
If your paycheck, government benefits, or other payments go directly into your account, it ensures activity is recorded regularly.
3. Log in to Online Banking Frequently
Even if you don’t need to make transactions, logging into your Bank of America online banking or mobile app can signal activity on your account.
4. Set Up Bill Payments
Schedule automatic bill payments for utilities, subscriptions, or credit card payments to ensure your account remains active.
5. Keep Your Contact Information Updated
Make sure your phone number, email, and mailing address are up to date with the bank to avoid missed communications.
6. Respond to Bank Notifications
If Bank of America sends you a notice about inactivity, take immediate action by making a transaction or calling customer support.
7. Link Your Account to Another Active Account
If you have multiple accounts at Bank of America, linking them together can help prevent inactivity classification.
8. Avoid Long Periods of Inactivity
If you don’t plan to use an account for a while, consider setting a calendar reminder to make a small transaction every few months.
What Happens if Your Account Is Marked as Abandoned?
1. Funds May Be Transferred to the State
If your account remains inactive for too long, the money in it may be transferred to the state as unclaimed property.
2. Reactivating the Account Can Be Complicated
You might need to visit a Bank of America branch, provide identification, and go through a verification process to regain access.
3. Credit Score Impact (For Certain Accounts)
If the closed account was linked to overdraft protection or loans, it might impact your credit score.
4. Possible Loss of Account Benefits
Some accounts come with benefits, such as waived fees or interest rates. If an account is closed, you may lose access to these perks.
How to Recover an Abandoned Account
1. Contact Bank of America Customer Support
Call or visit a branch to inquire about the status of your account and request reactivation.
2. Provide Necessary Documentation
Be ready to show identification and any required paperwork to verify your ownership.
3. Check with Your State’s Unclaimed Property Office
If your funds were sent to the state, you can claim them through the state’s unclaimed property office.
4. Open a New Account (If Necessary)
If your old account was permanently closed, you might need to open a new one.
Conclusion
No one wants to wake up one day and realize their bank account has been closed due to inactivity. The good news is that avoiding this situation is simple just ensure regular transactions, keep your contact information updated, and stay engaged with your banking activities.
If your Bank of America account is at risk of being classified as abandoned, take action now to prevent unnecessary stress and financial complications.
FAQs
1. How long does it take for a Bank of America account to be considered abandoned?
It varies by state, but typically, an account is considered abandoned after 3-5 years of inactivity.
2. What happens to my money if my account is closed due to inactivity?
Your funds may be transferred to the state as unclaimed property. You can recover them by filing a claim with your state’s treasury office.
3. Can I reopen a closed Bank of America account?
In some cases, yes. You’ll need to contact Bank of America to check if reactivation is possible. Otherwise, you may need to open a new account.
4. How do I check if my account is at risk of being classified as abandoned?
Log into your Bank of America online banking, review account activity, and check for any bank notifications regarding inactivity.
5. Can a small transaction prevent my account from being marked as abandoned?
Yes! Even a small deposit, withdrawal, or debit card purchase can keep your account active.