Banks are increasingly using algorithms to monitor transactions for potential suspicious activity, leading to the closure of many accounts.
Factors leading to account closures include unusual deposits, involvement in businesses like cannabis, international wire transfers, and unusual cash withdrawals.
Red flags triggering closures can include structuring cash deposits to avoid reporting requirements, engaging in suspicious electronic transfers, and having a criminal history.
Customers facing account closures experience difficulties in paying bills, accessing funds, and maintaining credit scores. Small businesses may struggle to make payroll and face difficulties in explaining sudden account closures to partners and vendors.
The lack of transparency and recourse for affected customers creates uncertainty about their future banking prospects and financial reputation.
Banks, while emphasizing regulatory compliance, often provide vague explanations for account closures, leading to frustration and confusion among affected customers.
Community savings practices like susus have also led to account closures, raising questions about potential bias.
Unusual transactions, such as structured deposits and international wires, can trigger account closures.