It’s no secret: traditional banks are heavily regulated, particularly since the 2008 global financial crisis ripped through the world economy like wildfire.
Banks have boxes to tick. Compliance hurdles to jump through. Obligations to meet. And ultimately, these financial monoliths are out to protect their interests.
Sometimes this affects your business severely, resulting in a problem: your bank may block your transactions — leading to needlessly long delays before your client or supplier can even receive your funds.
If you’re running a business, this can be infuriating — especially during difficult times. Let’s say there’s a supply chain rupture — how will you keep your customers and suppliers onside when they’re dogging you for late payments?
However, there are steps you can take. Let’s delve into the details.
This article at a glance
Blocked or delayed transactions are a detrimental but inevitable by-product of a global supply chain dominated by traditional financial institutions. Banks block transactions to safeguard their interests in the event of suspicious activity in your account or to comply with regulatory standards. You can work with your bank’s anti-fraud team to tackle the problem, but if it persists, choose an alternative to traditional banking that protects 100% of your money.
Why did my bank block a transaction?
There are various reasons why your bank blocked your transaction. They include the following:
- Low threshold for suspicion
- Highstreet banks use sensitive systems to detect potential concerns regarding funds and customers. They might also file Suspicious Activity Reports (SARs) to safeguard their interests.
- Compliance with regulatory obligations
- Sometimes, your bank may not even divulge any information to avoid alerting anyone of a SAR or investigation. In these instances, your bank may tell you that they’re complying with regulatory obligations.
- Human errors or mistakes by automated systems
- Highstreet banks are usually still running on outdated banking systems, and their automated systems make mistakes. Furthermore, banks still rely heavily on paperwork, which is vulnerable to human error.
What can I do when my bank blocks a transaction?
- Scrutinise your online banking transactions
- If you can still access your online banking, look through your recent transactions and note anything suspicious.
- Contact your bank’s fraud team
- While the bank may not divulge the exact reason for declining your transaction, you can still try to clarify matters with them. Request to speak to the fraud team — they have the ability and resources to take an in-depth look into your account. If there’s a transaction causing the block, ask if they can explain the reason. If your bank refuses to assist, you can file a formal complaint.
- Take it to the Financial Ombudsman Service (FOS)
- If you receive a deadlock letter after complaining to your bank, consider escalating things to the Financial Ombudsman Service (FOS). However, this can only be done eight weeks after you have filed your complaint with your bank.
- Create a new business/payments account as soon as possible
- If you can’t resolve the issue, consider setting up a business account with a new provider to facilitate a smoother payment process. Choose another high street bank (and be faced with the same system predisposed to blocking transactions) or an alternative payment process to optimise your business’s efficiency.
I need to make an urgent payment. What else can I do?
There are options beyond traditional banking. Fintech payment service providers cost less in account maintenance fees and are often free to set up. And most are less stringent in regulatory requirements.
The choice is simple: choose Silverbird.
Silverbird is the first fintech designed exclusively for international trade, offering support for large international transfers, global business accounts, attractive foreign exchange rates, and local EU/UK bank details.
Opening a Silverbird account is free, 100% online and boasts 0% maintenance fees. Best of all, Silverbird accepts over 98% of international trade applicants.
With a Silverbird global account, you will no longer be restricted to only SWIFT international payments when sending money overseas. Silverbird also offers local payment solutions in 20 countries to pave the way for more efficient and cost-effective business international transfers. Silverbird allows you to rest easy with its safeguarding process — 100% of your funds are kept at reputable Tier-1 banks in the UK and EU.
Author: Melissa Yeo
Illustration: Kate Faldina
Borderless payments for global business
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Borderless payments for global business
Get the multi-currency account built for quick and easy international payments, with no limits.
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FAQs
Contact your bank's fraud team
While the bank may not divulge the exact reason for declining your transaction, you can still try to clarify matters with them. Request to speak to the fraud team — they have the ability and resources to take an in-depth look into your account.
Why is my bank blocking my transaction? ›
Large purchases, charges from sellers in foreign countries, or activity that seems unusual may trigger the bank or credit union to lock down your account to avoid fraud.
What happens if the bank blocks a payment? ›
If the payment was made prior to blocking the card, then it will go through. However, after the card is blocked will stop the payment. I suggest that you contact your bank to report the fraud. This is the only way to get the money back.
How do I unblock my bank account? ›
What to do it if is blocked?
- Contact your bank and find out. It can be a quick and easy process.
- Log in to your online banking and review your transactions for any unfamiliar payments or deposits.
- Open a new bank account.
Contact the Bank. The first and most crucial step when you discover that your account has been blocked is to contact your bank's customer service immediately. Getting in touch with the bank will allow you to understand the reasons behind the account block and the specific actions required to unblock it.
What happens when a bank blocks your account? ›
Your account may be frozen. Debits will be blocked and deposits won't make it in. You'll get your money back (usually). You may receive a check in the mail for the remaining balance, unless the bank suspects terrorism or other illegal activities.
How long do banks block you? ›
For simpler situations or misunderstandings, usually, your account is frozen for seven to ten days. Complicated situations may require detailed information from you before the bank decides on the next course of action: to unfreeze or close the account entirely. This decision could take 30 days or more.
How can I unblock my debit transaction? ›
Submit An Application To the Bank
You can directly approach your bank or its branch and submit a written application, requesting an automatic unblock of the ATM card. To verify your identity as the card's user, you must submit ID and address proof. Once these details are verified, the bank will unblock your card.
Why is my bank declining a transaction? ›
Unauthorized transactions, unusual use patterns, lost or stolen cards, or scams and malware can automatically trigger a card decline as a safety measure.
How do I get money out of a blocked bank account? ›
A court must approve and order any withdrawal of funds from a blocked account. The most common reason to petition a court to withdraw funds from a blocked account is to access a blocked account because the account was created for a minor who has subsequently turned 18.
You can still receive deposits into frozen bank accounts, but withdrawals and transfers are not permitted. Banks may freeze bank accounts if they suspect illegal activity such as money laundering, terrorist financing, or writing bad checks.
How long can a bank block your account? ›
How long can a bank freeze your account for suspicious activity? It is most likely to be resolved within a couple of weeks. However, if the NCA are investigating you may not hear anything for up to 42 days. After the expiry of that period the Bank must normally release the bank account unless there is a court order.
How do you unrestrict your bank account? ›
To unfreeze your bank account, you must contact your bank to figure out the issue and resolve the underlying problem, such as paying off debts or providing evidence of innocence. Unfreezing an account is at the bank's discretion and is not always guaranteed. You don't want a frozen account; nobody does.
Can you withdraw money if your bank account is blocked? ›
A financial institution's action of temporarily suspending or restricting access to a bank account makes it a frozen bank account. This means you won't be able to transfer money or withdraw funds, and any scheduled payments will be temporarily paused.
How long does it take for a bank to unlock your account? ›
Why Was My Banking Account Frozen?
| Scenario | Action Required | Estimated Time to Unfreeze |
|---|
| Legal or Compliance Review | Completion of legal processes or compliance reviews. | Varies (could be weeks or months). |
| Security Concerns | Resolution of security issues such as suspected identity theft. | 5 to 30 days. |
6 more rowsJul 13, 2022
Call the bank customer care and identify yourself and request them to unblock. Find out reason why it is blocked to avoid blocking again. How do I bypass debit card OTP for online transactions?
Why is my payment blocked? ›
These are the most common reasons your payment was declined. The card is expired. The billing address has changed or doesn't match what's on file with the bank or card issuer. You made an error while entering required info in "3-D Secure", a security feature that banks use to verify your identity.
How do I get money out of a blocked account? ›
A court must approve and order any withdrawal of funds from a blocked account. The most common reason to petition a court to withdraw funds from a blocked account is to access a blocked account because the account was created for a minor who has subsequently turned 18.
Does blocking transactions stop deposits? ›
Blocking All Transactions also will not block credits to your account, ATM deposits, ATM Now Card loads, ATM payments (including transfers from your deposit accounts to your credit accounts), ATM check cashing, ATM inquiries or ATM account mini statements.
