Identity theft can disrupt every aspect of your financial life, often leading to unexpected consequences, including closing your bank accounts. When fraudsters gain access to your personal information, they can use it to withdraw funds, make unauthorized transactions, or even open new accounts in your name. In many cases, banks may close affected accounts to mitigate further risk—a decision that can leave you scrambling to access your money and restore financial stability. At Lehrman Law, we help victims of identity theft navigate these challenges and advocate for their rights under federal and state laws.

How Identity Theft Leads to Account Closures

Identity theft can impact your banking relationships in several ways:

  • Unauthorized Transactions: Fraudulent withdrawals or transfers can trigger suspicion, prompting the bank to close your account to prevent further losses.
  • Negative Account Balances: Identity thieves may overdraw your account, leaving you responsible for unauthorized overdraft fees and negative balances.
  • Suspicious Activity: As a precaution, the bank may freeze or close your account if you engage in unusual transactions.

While banks aim to protect consumers, these actions can create additional challenges for victims already grappling with the consequences of identity theft.

Steps to Take If Your Bank Account Is Closed

If your bank closes your checking or savings account due to identity theft, it’s essential to act quickly and follow these steps:

  • Confirm the Reason for Closure: Contact your bank to verify why your account was closed. Request detailed information about the suspicious activity and any supporting documentation.
  • File an Identity Theft Report: Report the identity theft to the Federal Trade Commission (FTC) through IdentityTheft.gov. This report will serve as critical evidence when disputing fraudulent activity.
  • Notify Law Enforcement: File a police report detailing the unauthorized transactions and account closures. Include any documentation provided by the bank.
  • Dispute Unauthorized Transactions: Work with your bank to identify and dispute fraudulent transactions. Provide your FTC and police reports as evidence to support your claims.
  • Request a Reinvestigation: Under the Fair Credit Reporting Act (FCRA), you have the right to dispute inaccurate information reported to credit bureaus. If your closed account appears as a negative item on your credit report, you can request a reinvestigation to correct or remove it.
  • Open a New Account: Once the immediate issues are resolved, consider opening a new account at the same bank or another institution. Be sure to implement safeguards such as two-factor authentication and account alerts to monitor for future suspicious activity.

Consumer Protection Laws

Victims of identity theft are protected by several federal and state laws designed to hold financial institutions accountable and help consumers recover:

  • Electronic Fund Transfer Act (EFTA): This law limits your liability for unauthorized electronic transactions. If you report fraudulent activity promptly, your liability may be capped at $50 or less.
  • Fair Credit Reporting Act (FCRA): The FCRA requires credit bureaus to investigate disputes and correct inaccurate information on your credit report. If a bank reports a closed account or unpaid debt caused by identity theft, you can challenge these entries under the FCRA.
  • Truth in Lending Act (TILA): TILA protects consumers from liability for unauthorized credit card transactions. Similar protections may apply to overdraft credit lines linked to your bank accounts.
  • Florida Consumer Protection Division: Florida has a whole division of consumer protection that can be contacted for help.

Preventing Future Identity Theft

While recovering from identity theft, it’s essential to take proactive steps to protect your finances:

  • Monitor Your Accounts: Review your bank statements and credit reports regularly for unauthorized activity. Consider signing up for credit monitoring services.
  • Use Strong Security Measures: Implement strong passwords, enable two-factor authentication, and avoid accessing financial accounts over unsecured Wi-Fi networks.
  • Freeze Your Credit: A credit freeze can prevent fraudsters from opening new accounts in your name. Contact Equifax, Experian, and TransUnion to request a freeze.
  • Educate Yourself: Stay informed about common scams and phishing tactics to reduce your risk of fraud.

How Lehrman Law Can Help

Navigating the aftermath of identity theft and wrongful bank account closures can be daunting. At Lehrman Law, we are committed to guiding you through the legal complexities and helping you assert your rights. Whether you need assistance disputing a wrongful account closure, addressing inaccuracies on your credit report, or pursuing damages under consumer protection laws, we’re here to help.

Take Action Today

If you’ve experienced a bank account closure due to identity theft, don’t face the recovery process alone. Contact Lehrman Law to discuss your situation and explore how we can help you restore your financial stability. Together, we’ll work to ensure that your rights are protected and that you can move forward with confidence.