Banks Are Closing Customer Accounts, With Little Explanation (Published 2023) (2024)

Naafeh Dhillon had just left the holiday light show at Saks Fifth Avenue in New York when he learned that all of his bank accounts had mysteriously gone dark.

After the show, Mr. Dhillon, his girlfriend and some friends escaped the cold and had dinner at a French bistro — but when it came time to pay the check, his credit card was declined. His debit card was rejected next. It had to be some sort of mistake, he figured, because he had plenty of money in his account.

But when he returned home that mid-December evening and called his bank, Chase, a customer representative delivered the unexpected news: The bank had dumped him as a customer. The rep said he should have received a letter in the mail but couldn’t say much more than what was in the notice — “unexpected activity” had led to the closing of his accounts.

“I received no kind of warning or red flag,” said Mr. Dhillon, 28, who had started banking with Chase after visiting its marketing booth at New York University, which he attended after arriving in 2013 from Pakistan. “It was just out of the blue.”

Since he wasn’t given a specific reason for the closure, he couldn’t disprove whatever raised suspicions in the first place. “It was almost like getting a scarlet letter,” he added.

A rise in suspicious activity reports

With fraudulent activity on the rise and exploding during the pandemic, some banks are taking an even harder look at their customers’ transactions — and closing their accounts when they feel that it’s necessary.