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Home >> Accounts >> Business Accounts
Account Closed without Warning because of History?
I just opened an account for a business under a sole proprietor. Within a week they froze it, saying that it was under review since it was a new account. They now say that since I previously had an account closed with them a few years back for a different business, they are closing my newly opened account based on previous history. They have done this without warning, and now I have payroll checks that will bounce. Is this legal to suddenly close the account without an actual explanation or details?
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 Your bank is a business like yours. They can choose with whom they want to do business, so yes, they can tell you that the account will be closed, and it seems they did provide you with details; you had a prior account with them that had a bad ending. You will need to look at your Deposit Agreement as to what notice, if any, was required from the bank. In some instances yes, an immediate closure is allowed. In some cases notice of a few weeks or a month may be appropriate. If the bank suffered a loss in the past, you may be able to explain to them what happened, why it is different now, and offer to make them whole on that prior loss as a show of faith and recognition of the debt.
Published on BankingQuestions.com 5/21/09
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