I'm not sure if this topic has been covered yet, but I'll put it out there as this seems to be an emerging conversation.
More and more internet banks and fintech firms are advertising high savings rates with easy ACH transfers to open and fund an account, however when trying to withdraw those funds, the accounts are frequently locked and access to your funds are denied. Then it can take weeks if not months to retrieve your money, often with devestating consequences, such as not being able to pay your bills while racking up enormous late fees, going into default status on loans, and even possible eveiction for those who rely on this money to pay their rents or mortgage.
Some of these firms feature debit cards and direct deposit. Reports of direct deposits going missing or being frozen is a pattern that seems to be reported. Fraudulent debit card purchase against these accounts are also being reported with customer's claims being denied and no explanation given. The amounts are often thousands of dollars.
Customer typically report that they spend many hours on the phone over weeks and months, a lot of it just being on hold, and receiving a pattern of conflicting and inconsistant information from CSR's on what needs to be done to regain access to their funds, such as waiting for forms that the bank is to mail and to be filled out and mailed back, often with personally identifiable information. The forms typically don't arrive, or if they do, they seem to just disappear after mailing them back. There are also reports of customers being told that their funds have become unfrozen, but frequently they are still frozen when the customer tries to regain access.
One thing many of these institutions have in their deposit agreements is that the customer agrees that that the bank or fintech can basically freeze their account at their sole discretion and can take as long as they determine to unfreeze the account. Some even go on to say that the customer will be responsible for the cost of maintaining the account if frozen and any investigation that is made thereof (and some customers report that they have been charged these costs.)
For the fraudulent debit transactions, reports are that the companies are not following Electronic Transfer Act policies that protect consumers and limit their liability in the event of a fraudulent debit transaction and simply deny the customer any recourse.
Ultimately, it seems that the best recourse a customer has to get their money back is to file complaints with regulatory agencies, state agencies, and the Consumer Protection Financial Bureau. Even so, customers often report that the institutions lie in their responses to these agencies, however at least there is a trail at this point that can be followed through with, and often these complaints help customers regain their access at some point. However, again, this is after hours, weeks, and months of not having access to begin with, or not being protected against a fraudulent debit.
Not to mention any particular institution, but this trend seems to be increasing more recently. Typically, it was rare for a bank to freeze someone's account, and when they did, there was a specific and stated reason with a clear requirement as to how to resolve the situation in a timely manner. So the increase of this type of situation and the troubles that it can cause is concerning.
So I'm putting this topic out there and see what everyone thinks.
