What to do if your bank account is “frozen”

A “frozen” or blocked bank account means you can’t use your account to transact – a source of great frustration if you have items to buy or bills to pay. Missed payments can affect your credit score, so you’ll want to resolve the situation quickly.

We examine why your bank account may have been blocked, and the steps you can take to unfreeze your account – assuming you haven’t used it for illegal activity.

Tip: Check your credit score here to learn more about your financial position.

Why are bank accounts frozen?

A bank may freeze an account for several reasons - including if:

• You haven’t used your account for some time, and the bank has been unable to contact you using the last contact details you provided.
• Your account isn’t verified under the financial intelligence centre act (FICA). The bank usually verifies your identity and particulars before you open an account, so this is rarely an issue. However, if your information isn’t up to date, and the bank can’t get hold of you, your account may be blocked.
• Suspicious activity on your account leads the bank to believe you may be involved in illegal acts, such as fraud or money laundering. To block your account for this reason, the bank would first need to obtain compelling evidence.
• A court order requires the bank to freeze your account. This may happen, for example, if a creditor has been granted a judgment against you.
• You’ve been declared insolvent or your estate is sequestrated.
• You pass away. Bank accounts are always frozen in the event of death, even if power of attorney has been granted to a surviving person. In South African law, powers of attorney are unenduring, meaning that if the grantor dies, they fall away.

Will you be notified before your account is frozen?

The Financial Sector Conduct Authority requires banks to provide reasonable notice and give reason for blocking an account, says Desiree Reddy, a director of Norton Rose Fulbright law firm.

“The Ombudsman for Banking Services provides that a reasonable period is one to two months for individual accounts, and two to three months for business accounts, depending on the case circumstances,” notes Reddy.

However, this doesn’t apply if the law requires a bank to freeze an account, or if the account is being used for illegal purposes.

“If a bank suspects fraud or illegal activity, it may temporarily block access to the account and ask you to confirm certain details,” says Ester Ochse, product head at FNB Integrated Advice.

What can you do if your account has been frozen?

Ochse says your bank will inform you of what you need to do to regain access to your account. In most instances, this can be achieved relatively quickly, provided you meet certain conditions.

If your account has been frozen due to lack of use, it will be closed after three to six months. Your bank will attempt to contact you – however, if no response is received, your account will be closed and the funds transferred to a suspense account or “unclaimed balances” account, in case you return to claim them later on.

In order to claim the funds, you must provide the bank with sufficient details to identify you and your account.

In the case of a court order, you will need to have the judgment against you rescinded or set aside, or have it replaced by another court order that allows you to access your account.

You can do this by working out a repayment plan with your creditor, or allowing the creditor to attach, or take, a portion of your salary or wages in payment of the debt, via an emoluments attachment order.

In some cases, creditors will attach a portion of the funds in your account through a garnishee order, which the sheriff of the court will administer, and pay to your creditor.

Banks have online tools that allow you to manage and update your information to ensure compliance, says Ochse.

“Update your personal information and contact information online,” she says. “You can also verify details such as your name and ID number.”

FAQ's

Q: Why has my South African bank account been frozen?

A: According to JustMoney, the most common reasons a bank account is frozen in South Africa are suspected fraud or money laundering, a court order due to unpaid debt, a SARS tax directive, outdated FICA documents such as an expired ID or proof of address, or a garnishee order. Contact your bank's fraud or compliance line to find out the specific reason.

Q: Can a bank freeze my account without telling me in South Africa?

A: Yes. Under FICA and anti-money-laundering legislation, South African banks can freeze an account without prior notice if they suspect fraud or receive a court order. JustMoney advises contacting your bank immediately if you discover your account is blocked, as acting quickly usually speeds up the resolution.

Q: How do I unfreeze my bank account in South Africa?

A: Contact your bank directly, find out the reason for the freeze, and provide the required documentation — typically updated FICA documents such as a valid ID and proof of address. If the freeze is due to a court order or garnishee, you may need legal assistance. JustMoney notes most freezes are resolved within a few business days once the bank has what it needs.

Tip: Worried about having a judgment taken out against you? Consider consolidating your debts. Click here to find out more.