A US bank is now denying access to funds and freezing accounts in a new scandal that has customers shaken by the bank’s decisions.
Green Dot Bank, which offers banking and debit card services to people who shop at Walmart, is now being accused of giving its customers the runaround after being locked out of their accounts, reports NBC News.
Customers say the bank is freezing their accounts and have gone days, and in some cases weeks, with holds on their accounts.
Green Dot also operates under the name Go2Bank and furnishes deposit and debit card services to Walmart customers.
The bank, which has 33 million customers, initially said account balances and transactions were impacted by an issue with a payment processing partner.
Now, the bank says its systems are fully up and running – but customers say the problems persist, reports DH.
Florida resident Mary Cannon said she’s still having trouble. Cannon has been unable to access her IRS tax refund of more than $7,000 since mid-July. She said there remains a suspicious-activity hold on her account that she believes is erroneous and that she has been unable to resolve with the bank.
“They giving me the runaround,” she said.
Tennessee resident Sara Morgan has also been unable to access funds from, or make purchases through, her account for six days and counting.
“I’m beyond stressed,” she said in an email. “[I’m] having to pay bills with credit cards. I don’t see how they can get away with not having alternative access for people to get their money.”
UpDownRadar.com, which tracks web outages, was filled with customer complaints Friday, many of whom said they cannot access their funds.
Bank of America Freezes Accounts Linked to Coinbase
Bank of America (NYSE:BAC) is either freezing bank accounts or closing accounts linked to Coinbase according to a number of customers in the bank’s latest scandal.
Coinbase CEO Brian Armstrong took conducted a poll after a user said their Bank of America account had been closed for no apparent reason after a 15-year run.
The Bank of America customer stated that they do Coinbase transactions directly from the bank.
“This is a war on Bitcoin & crypto”, they said on Twitter.
At the time of this publication, more than 1,400 users voted to have been affected by a similar or same occurrence.
“Closed my account with them in 2010 after 10yrs. Worst bank I ever had,” said one user.
“Following the recent lawsuits by the U.S. Securities and Exchange Commission (SEC) against major crypto players Binance and Coinbase, banking institutions have grown cautious about engaging with these firms,” says Coinpedia.
But this isn’t Bank of America’s first rodeo in violating its customers.
The Consumer Financial Protection Bureau announced Tuesday that an investigation found that Bank of America harmed hundreds of thousands of customers across multiple product lines over a period of several years through a series of illegal practices.
Bank of America is paying a whopping $250 million fine for double charging insufficient fund fees and opening new accounts without customer’s knowledge or consent.
While not everyone may be experiencing Bank of America freeze or close their bank accounts relating to crypto, it’s undoubtly a mess for those who are.
Why Are Many Banks Freezing Customer Accounts?
There are several bank scandals affecting customers. One of the biggest being banks freezing customer accounts and in some cases closing accounts.
Banks are now even closing thousands of bank accounts daily.
Users on social media have noticed this alarming trend in the bank sector and as a result, have moved over to credit unions.
Others are moving to online banking-only banks that pay customers some interest for banking with them.
People have also resorted to leaving money in their investment brokerage account or simply withdrawing their money to have cash at hand.
The 25 largest US banks are now seeing a record plunge in deposits according to the latest study conducted by the Federal Reserve Economic Data (FRED).
According to the FRED data, between July 5 and the most current reading on July 26, the 25 largest U.S. banks saw a plunge of $174 billion in deposits.
Deposits at the 25-largest domestically-chartered U.S. commercial banks peaked at $11.680 trillion on April 13, 2022, according to the updated H.8 data maintained at the Federal Reserve Economic Database.
As of the most current H.8 data for the week ending on Wednesday, July 26, 2023, deposits stood at $10.709 trillion at those 25 commercial banks, a dollar decline of $970 billion and a percentage decline of 8.3 percent.
In fact, small banks have performed better than big banks in terms of inflow.
Despite all of the misleading news reports about depositors seeking out the perceived safety of the largest banks since the banking crisis in the spring, it’s actually been the smaller banks that have staged a comeback on growing deposits since the week of April 26,” says Wall Street on Parade.
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