Account closures

Nebulous2

We often get tales on here of bank accounts being 'frozen' unexpectedly. I often wonder what the person did to initiate that response from the bank.

This Observer article highlights a case where merely receiving a compensation payment was enough for Barclays to act, rather hamfistedly.

JuicyJesus

Very sudden inflows and outflows of large amounts of money which are out of character for a given person and don't tally with what the bank knows about them will most likely trigger that response. That's what appears to have happened in the case in the Observer.

Barclays had every right to lock down the account and look into the source of funds; were I in the same position I would do so too. Where they screwed up was by ignoring documentary evidence which was willingly provided, taking an unreasonable amount of time to look into their (initially justified) suspicions and then compounding this issue with service failures relating to their processing of payments, restoring his access to the account and silly expectations of what other banks should do about their suspicions. If they'd responded more proactively to the chap's documentary evidence, didn't expect him to run around to different banks chasing and didn't take several months to look into the issue then the issue would probably never have escalated to the degree it did.

Ultimately though banks are between a rock and a hard place, and the article itself mentions that money laundering regulations have been severely tightened up, and fines doled out to banks for inadequate checking and vetting have grown massively leading to a severe case of institutional risk aversion - that is then pushed down to individual members of staff who are encouraged to be on the lookout constantly. Nobody wants to be the one singled out for letting some terrorist group get its financing, and no bank wants the fines or bad publicity.

System

The key is always having, at least, two unconnected current accounts.
Then your only real issue is getting the funds out of the frozen account / institution.