Is it legal for a bank to freeze all of the money in your account because they think a check deposited was bad

Question

I recently received a check for my Christmas Club I had with a local bank. I took this check to my WaMu branch to deposit it into my checking account. The next day I learned my account was set to close in 2 weeks and my funds in the WaMu account have been frozen. Upon verifying the check from the local bank, WaMu claimed that they thought the Christmas Club check was a bad check from a closed account. I got someone from the local bank where I had my Christmas Club setup involved with dealing with the Risk Operations department of WaMu. It was verified in writing from the local bank to WaMu that the check was good and the account it came from was legit and an open account. WaMu claims now that my funds (the christmas club check along with over $700 that was in the accound already) will continue to be "frozen" until the christmas club check clears. The representative from Risk Operations claimed it could take up to 10 days. Risk Operations also refuses to let you speak with a supervisor

WaMu claimed that we would be notified in writing within a week of when are funds were frozen. We were not notified at all that there was a problem with that check until I tried to use my check card and it was denied. They also claimed that because our account is fairly new, since the check was "bad" it was grounds to set our account for closure within 2 weeks of the incident. If are funds were still frozen by the closure date, we would receive a check for the balance (excluding the "bad check" in question).

the morning of the "incident" when they put the freeze on my funds without my knowledge, i went to pay my car loan in the bank branch because it was due that day. I had to call the car loan bank company to let them know of the problem. My car loan bank put a 7 day hold on my car loan so I don't receive phone calls about the non-payment. of course to make matters worse, i have direct deposit to that WaMu account and I found out about the frozen funds an hour before I left on the day the checks are sent to the bank. Of course it was too late to get a live check so now I have to wait until the check comes back to my job because it is going to be rejected and then get them to cut a live check which will won't happen until middle of next week the latest.

Answer 1

I can understand putting a hold on the check. That's pretty normal. But I don't see why they froze your hole account and threatened with closing the account in two weeks.

Even worse, they didn't bother to tell you about the frozen account.

Frankly, I'd make a personal appearance at a nice busy Friday afternoon and demand all my money, in cash, since I would trust not their check, and go find another bank.

Granted there are all kinds of check fraud schemes but freezing your whole account went way over the line.

Answer 2

Have the direct deposit stopped right away, and then they can send you a paper check. You can't stop the bank from returning checks that wont clear. You might want to get a new account at a different bank and let people know that you will pay them from a new account.

Answer 3

Why don't you just let the 10 days play out, and then after 10 days re-check to make sure everything is A-ok? Don't sweat the small stuff...this should clear shortly. Sure what they did sounded strange, but I'd give them a second chance and if they didn't shape-up in my eyes I'd go elsewhere.

I remember having loads of problems like that with Barnett Bank here in our area, eventually they closed. I once opened a new business account with them with "cash" and they gave me checks and said it was ok to write checks. I wrote checks all over town, and all were bounced...geez. I was sure that was impossible to do but they did it. I lost some businesses and clients.
Another time I tried to put money into my business account at a Barnett branch and they said my name was not on the account. Duh, I was the owner and the only person in that business. They grabbed the info I had in hand and refused to give it back. I turned them in and they gave me $80 for my trouble. I know how you feel....incompetent banks!

Answer 4

Just call the Branch and demand that you speak to a AVP. Just say unless your funds are available immedialtely, you will file a complaint with the Banking Commissioner and also to the President of that bank. Also put that in writing sending 1 regular 1 certified to the AVP or who ever manger you spoke to. Also keep a copy.

Answer 5

The bank only has the right to freeze your account for the amount of the check and any bounce check fees. I would call the banking commissioner of your state (in the blue pages of your phone book) and tell him what has happened.

Answer 6

Sorry to hear that happened....i know of someone who had her accounr frozen to and she had to wait until the check cleared before she could get her money.....it caused her to have late charges with her landlord and her car payment late...but the bank did not care!!!