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- Highstreet banks are usually still running on outdated banking systems, and their automated systems make mistakes.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
Get the multi-currency account built for quick and easy international payments, with no limits.
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Borderless payments for global business
Get the multi-currency account built for quick and easy international payments, with no limits.
Get started
FAQs
Contact your bank's fraud team
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.
Why is the bank blocking my transactions? ›
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.
How do I unblock my bank account? ›
Some common reasons for an account to be blocked or frozen include suspected fraudulent activities, suspicious transactions, non-payment of dues, or violation of bank policies. To unblock or unfreeze your bank account, you will need to contact your bank's customer support or visit your nearest branch.
How do I unrestrict my 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.
Can a bank block a pending transaction? ›
Pending charges usually can be canceled only by the merchant, not the credit card company.
How do I unblock an online transaction? ›
If you card is blocked for online transactions, it will be Unblocked on the next day, to be precise at 12:00AM, then you can try to do the online transaction. Alternatively, You can call the phone banking and request to do the Unblocking. Try Net Banking option instead of using debit card.
What happens when bank blocks 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 long can a bank block your account? ›
How Long Can a Bank Freeze an Account for? There is no set timeline that banks have before they have to unfreeze an account.
How long does it take for your bank to be unblocked? ›
The time it takes for a bank branch to reply to an application to unblock a bank account can vary. It often depends on the bank's policies and procedures. Typically, you can expect a response within a few business days, but it could take longer in some cases.
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 to check if a bank account is blocked? ›
How Do You Know if Your Bank Account is Frozen? If you have a frozen bank account, you won't be able to use your ATM and Credit/Debit cards as well. Each time, you'll see an error message on the screen, and any transaction that you make will fail to process.
Can I sue my bank for locking my account? ›
If you find that they did not have a valid legal reason to close/freeze your account, you can file a complaint or a lawsuit against the bank.
Can a bank put restrictions on your account? ›
Account freezes are normally the result of a court order, and in some cases, they may be done by the bank itself. This usually occurs when the account holder has unpaid debts to creditors or the government, or when there is suspicious activity detected through the account.
How do I withdraw money from a restricted account? ›
Typically, you cannot withdraw money from a restricted bank account. Depending on who placed the restriction, and why it was placed, your ability to withdraw funds could only be limited, or completely restricted. It's best you contact your bank to see if you can make any withdrawal from your account.
What does blocked for payment mean? ›
Blocked Payment
When your payments are blocked, it means you cannot receive payments through a platform that you work with.
What happens to pending transactions when debit card is blocked? ›
Any pending transactions that have already received authorization will be processed and paid.
How many days does a financial institution have to report a blocked transaction? ›
The initial reports on blocked property must be submitted within 10 business days of the property becoming blocked. These reports must contain the following information: A description of the owner or account party. A description of the property, its location, and account number or other similar identifying reference.
What to do if a transaction is failed and money is deducted? ›
Synopsis. If any money was deducted for failed ATM transactions it would automatically be reversed with T+5 days, where T is the transaction date. If the money is not reversed back to the individual's bank account then a compensations for such delay would be payable by banks.
