Analysts have reported seeing an alarming increase in banks closing customers’ bank accounts due to suspicious activity. In just the last few years, this trend has escalated for a variety of reasons.
However, experts are sounding the alarm bells over these mass closures, explaining that banks need to find other ways to deal with supposed suspicious activity, rather than automatically shutting a customer’s bank account down.
According to a recent report, banks have filed suspicious activity reports (SARs) more and more over the last few years. This data indicated that SARs filings skyrocketed by 50% in just the last two years.
These SARs reports have then, for the most part, led to banks closing customers’ bank accounts because of this suspicious activity.
Reporting has also suggested that banks aren’t talking to customers if their accounts are flagged by their system. Instead, many banks are going so far as to shut out customers completely during this process.
For some banks, this is to make the process more efficient. Instead of potentially having to deal with regulation issues, banks immediately deal with the problem by simply closing the account.
According to these banks, losing potential customers because of account closures — and even incorrect account closures — is better than having to deal with regulatory issues.
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