My bank closed my account for which they said illegal activity was taking place in the form of...

My bank closed my account for which they said illegal activity was taking place in the form of check kiting. They mentioned they would not need to contact authorities if they did not take a loss. I have a second bank account that did not mention anything about this. Will the bank closing my account file a SARS or report against Checksystems if no loss was apparent? Also I was wondering if this would harm my future chances at another bank of opening accounts, depositing money, or applying for lines of credit or loans? Thank you for your help.
DM asked this question 3 years ago
  • Bank of America • 2146 answers • 92% helpful

    HI DM,
    I want to let you know that usually accounts do not close because of one time check depositing errors. I can't not mention how often it happens since people do mess up when they have multiple accounts and banks to handle.
    Your other bank might not have thought it as an illegal activity. If the money came from the second bank, you would have just been getting a lot of fees. A lot of big banks have systems to detect check kitting whereas small ones dont.

    The only way it would hurt you if you don't money back and if you are charged as a criminal because your intent was to create fraudulent activities. Check systems if usually only for people that owe big bills. IF you are convicted or get further actions taken upon, it can hurt you in the things you mention. Depending on your state credit checks are legal, and can hurt you.

    It all depends if there are further actions taken upon you. If not, they nothing happens but a close account.

    Let me know if you have more questions

    4 other experts are backing this answer

    • D
      Thank you supreme!
    • D
      So, do you think that SAR will probably not be filed against me since no loss happened AND it was less than $500? They said they could not even release their suspicions to another bank because of confidentiality. Is there anyway to check SARS for public records, or just go to another bank and open a savings account with legitimate cash?
    • Bank of America • 2146 answers • 92% helpful

      Hi DM,
      Your amount is not much at all. This whole time I was thinking around $10,000.
      The Bank won't report to SAR since reporting to sar are activities revolving around $10,000. Honestly you can pretend nothing happen. It is hard to prove someone's intent is fraud.
      Right, the bank won;t release since it is a confidential.
      When you open a new account, the places can take cash or check and chances are they don't know that things happened. So it is up to you if you want to use cash,
    • D
      They told me it could be a problem opening a new account, but then again said no real problem. I am going to assume it is confidential and not worry. I made a mistake and won't do it again.

      I checked the laws in my state, and "passing bad checks" as it is called is theft, and if no amount was lost to them. There's not much more to do,since they just detected potential losses and we could go all day with that. Usually people just pay it back if they have a check bounce, as you said it is hard to prove fraud.

      I appreciate your help superme. I have been worried about this. Never had bounced checks before and good credit close to 700. It's just you get financially strapped and make mistakes. Did you say it happens a lot? Have you ever had to have an account closed based on suspected unlawful activity?

      A lot of forums I had were interesting, they were people who had been floating nonexistent funds for several thousand dollars at a time. Banks usually even allowed those people to pay back the balance. I always found the funds to cover if I had some small amount of money that wouldn't go through, even if it meant resorting to payday loans.

      That's another question I'll type and report how I came to find resolutions to a personal "payday loan crisis" related to all of this. Now I am floating a lot easier, and with the closing of one bank account the other one will be easier to navigate.

      Thank you for your help superme!!
    • Bank of America • 2146 answers • 92% helpful

      If the bank sends you a bill, then you know you can not ignore the $500. If you ignore the bill then it goes to collections and check systems.
      For instance you dont have the money to pay the $500, then you can pay back later, but what you do is go to the bank, look up the account number, the teller will make a cashiers check to their recover department which then will mail off.
      IF then don't send the bill then nothing happens.

      It happens a lot, I see people waiting for the bank to be open so that they can put money in since they used the wrong account. I had older folks that would try to write a check to the account that the check was coming out of.
      A lot of people have overdraft fees because they write checks to deposit for themselves but then forget about the things that come out or that surprise insurance that comes out semiannually.

      Corporate security is the one that closes the account. As a personnel we won't close it nor or we suppose to close it without it going through corporate security and filing forms for more investigations. Fraudulent accounts are closed on a daily basis, and same with accounts that have identity theft going on.
    • D
      Thank you superme, you were very helpful! I love this site it is super neat! Will come back more! I had my situation resolved pretty well. They are mailing me a check with my ending balance sometime this week, and no more of this. Nothing too serious happened it was just their needed action that made me scared. I will not make mistakes with accounts again. Sticking to one bank account will be good.

      Banking economics is pretty fascinating in a lot of ways. But am I correct that once I deposit money into a bank account it's really not just mine anymore. It's being sent out to Mr. X in a loan to buy a new car or in the mortgage loan for the Jones who are paying me and other customers back slowly the loan for their dream house. Interesting, it's a lesson learned the hard way not to assume it's just mine.
    • Bank of America • 2146 answers • 92% helpful

      Hi DM,
      That is correct. The bank uses your money to invest either through loaning and earning interest or investing in securities. Another interesting thing is a lot of business like big corporations are also in the business of real estate for tax purposes. Also real estate is one of those investments with a high beta.
      Under FDIC, you are insured up to $250,000. So if you had $100,000 and the bank defaults you still get your money back.