The way major banks close customer accounts is insensitive. Let’s solve it.

For most of the past year, my inbox has been flooded with stories from people like these:

Everyone – more than 1,000 wrote to me and my colleague Tara Siegel Bernard – volunteered to tell a story about losing bank and credit card accounts and included contact information. It’s not something most people normally do when they have something to hide.

Banks say they must close accounts they deem suspicious to prevent money laundering, fraud and terrorist financing. Moreover, regulators are pressuring them to look harder for signs of dirty practices.

But there are many frustrating things about this phenomenon: account closures often come without warning. There is usually no recourse, appeal or explanation from the bank possible. Sometimes you discover that you have lost your banking privileges when you buy food at the supermarket and your debit and credit cards no longer work.

But losing your bank account isn’t just inconvenient. It is scary. If you are a small business, this will disrupt your payroll and could damage your reputation in the community. Without explanation, you wonder if you are blacklisted or on some kind of government watchlist.

Much of the mystery surrounding these closed accounts is why banks often treat people so casually insensitively when they investigate their behavior and then show them the door.

It doesn’t have to work this way. Over the past few days, I’ve asked Bank of America, Citibank, JPMorgan Chase, and Wells Fargo about specific things they could do to make the foreclosure process different without breaking any bank security laws.

Wells Fargo declined to comment. The other three offered a glimmer of hope, but made no promises to make this process easier.

For those who have been shown the door, why would the bank want to calm their jittery nerves? There is no constituency for the financially damned.

Here are five questions I asked the banks – and the actions I asked them to consider.

1) Most customers don’t read their account agreements and have no idea that you can cancel those accounts at any time. When you contact them to investigate suspicious account activity, why not remind them to convey the seriousness of the matter?

Several times, readers told us that they had not taken their banks’ questions seriously, or that they found their questions too intrusive. But many banking customers do not realize that they do not have an inalienable right to bank with a particular company. They also do not understand that banks are legally obliged to do this know their customers.

Customers may not understand that every time the bank reaches out, they could be kicked out if investigators don’t like what they hear. They must therefore immediately take the bank’s call seriously.

Bill Halldin, a spokesman for Bank of America, said the bank sometimes makes clear how high the stakes are during such conversations. Jerry Dubrowski, a spokesman for JPMorgan Chase, said in a statement that the bank “typically sends the customer a letter explaining that we need to hear from them to keep the account open.”

2) So about all this paper mail. Banks often ask for additional information about customers in this way – and only in this way. Ditto when they inform people that their accounts are being closed. If your U.S. Postal Service is not reliable, if you throw away bond mail that looks like an invitation, or if you travel a lot or don’t open the mail often, you won’t see the letter.

So why not fire people up with simultaneous paper letters, phone calls, text messages and flashing alerts in giant fonts on banking apps and websites? Issue a points bulletin given the seriousness of these matters.

The banks didn’t have a good answer to this question, but Chase offered some hope. “We are looking at ways to expand our digital reach,” Mr. Dubrowski said. Citi is using “all available methods of communication,” a spokesman, Colin Wright, said in a statement.

3) We have heard from many people who have been customers for decades, bank employees or retirees who have lost their accounts. Are people really paying close attention to who exactly these people are?

My favorite correspondent this year is Ignazio Angeloni, who opened an account at Bank of America when he arrived in the United States in 2019 to serve as a senior fellow at Harvard. At one point he headed the operation at the European Central Bank that assessed the stability of more than a hundred banks.

The New York Times profiled him in 2013. It’s something a low-level security analyst searching the Internet would find in about 30 seconds.

But not long after Mr. Angeloni opened his account, he received his own Dear John letter. The bank wouldn’t tell him the reason, and his complaint to the Consumer Financial Protection Bureau went nowhere.

What gives? “Our policy includes increased scrutiny of accounts of non-U.S. government officials based on a number of risk factors,” Mr. Halldin said in a statement.

Mr Angeloni said he could think of no risk factors that could have affected the bank.

4) Banks often – but not always – submit something that a Suspicious activity report to the federal government when customers raise the alarm. The institutions cannot tell a customer whether they have made such a report, or even refer to it.

But why can’t banks tell people why they can’t have a checking account if they haven’t filed one of those reports? Hundreds of readers who had lost their accounts walked away in dismay.

Understandably, there may be confusion on this issue.

At a recent hearing in the Senate Banking Committee, Senator Laphonza Butler, Democrat of California, said questioned Citi’s CEO, Jane Fraser, on our November article on sudden account closures.

“We have anti-money laundering requirements that are very important where we are not allowed to tell the customer why we closed their account,” Ms Fraser said. “And I think we all realize how frustrating that is for our customers, but we have to follow the law.”

The “not allowed” part is true if the bank has filed a suspicious activity report. But is it true if it isn’t? “The circumstances under which banks are prohibited from disclosing information are not limited to a SAR filing,” said Mr. Wright, the Citi spokesman. He declined to comment further on the extent of the ban.

“Jane’s testimony should not be interpreted as saying that banks can never tell a customer why an account has been closed,” he added.

If your Citi accounts are closed in the future, take that quote to the company’s employees if they don’t want to discuss why they closed you.

5) Most Dear John letters from the banks are vague at best. Will you never be able to get another Chase Sapphire or Citi AAdvantage credit card if the bank closes your credit and checking accounts for undisclosed reasons? Will you ever be able to get a mortgage from the bank again? The letters usually don’t say anything.

Moreover, the banks offer no guarantees as to whether a closed checking account will prevent you from opening another bank account elsewhere. They also don’t tell you if you will end up in a federal database that could result in you being audited by the Internal Revenue Service, losing your TSA PreCheck membership, or facing some other penalty.

Why not clarify this so that people don’t live in acute fear as they try to quickly set up new accounts elsewhere – and the low-value variety as they go about their business in the coming years?

Bank of America and Citi were essentially silent on the matter. Chase did respond.

“Chase does not and cannot assure consumers about what will or will not happen in their interactions with third parties after account closure because Chase has no control over those third parties and does not want to provide potentially inaccurate information to consumers,” he said Dubrowski. said. “It is possible that the reasons underlying an account closure (for example, fraud or other illegal activity) may have different effects.”

Fair enough, but there’s nothing stopping banks from offering something like these reassurances, which our year of reporting shows are almost always true:

• “Since we only closed your checking account, we do not expect this to impact your credit report.”

• “Because you did not have too much in your account or regularly bounced checks, we did not notify you ChexSystems or Early warning services. (Negative messages there may prevent you from getting a new bank account elsewhere.)”

• “We have not reported you to the IRS, the Transportation Security Administration or any state database that could cause problems when you apply for business licenses or when police officers look for you during traffic stops.”

And there is nothing stopping our elected representatives or banking regulators from forcing banks to better inform their customers after an exit.

In that regard, many readers have reported that they have filed complaints with the Consumer Financial Protection Bureau and concluded that the regulator has no power to force banks to say or do anything about account closures and the processes surrounding them .

But it is not as if the agency has done nothing in similar circumstances.

Last year, as part of a $3.7 billion enforcement action against Wells Fargo, it punished the bank for using an overly sensitive automated system to detect suspicious deposits and then freezing the customer’s entire account, along with any other accounts, for at least two weeks. The bank then closed the accounts and eventually returned the money. Wells Fargo paid more than $160 million in customer reinstatement to more than a million people affected by the freezes and agreed to use less severe tactics.

The agency continues to investigate these issues and is looking for more reports of people being evicted. “Consumer complaints are an extremely useful source of information that we use to identify problems in the marketplace and help inform our law enforcement work,” Eric Halperin, the agency’s enforcement director, said in a statement.

Let this serve as an invitation to all the innocent people whose accounts have been closed to flood the agency with such reports.

Channeling anger at the consumer agency may be cold comfort, but that’s what you’re left with for now. ‘Never bank like a criminal again’ is difficult advice if you have no idea why the bank deported you in the first place.