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A few weeks ago I received a $125 Chase QuickPay from someone on the site localbitcoins.com. Turns out the payment was marked fraudulent, and my account was frozen, whether it was because the user was charging-back or his credentials were stolen I do not know. I knew that on my end the payment was legitimate so I sat down with my branch manager on multiple occasions over two weeks and discussed the situation and we were working on it, submitting documents, etc.

After a long (and possibly non-existent) investigation Chase first told me when I called to check up on things this morning that my account was unfrozen but I needed to set up a new online profile. When I went to the bank a couple of hours later to do this and they called to set up a new online account they were informed that contrary to what I heard earlier my account was being closed and that was that. The reason they gave is that I was receiving QuickPays from fraudulent sources (even though this one was one of many previously received QuickPays).

So I have two of questions:

  1. Is the bank required to give me the results of the investigation? (They refused when I asked on the phone at the branch.)

  2. Do I have any options/recourse to stop them from closing the account?

migrated from money.stackexchange.com Sep 8 '15 at 21:04

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  • What country, and (if the US) what state? – cpast Sep 8 '15 at 21:21
  • USA, new york city – Dylan McGrath Sep 8 '15 at 21:32
  • What kind of bank account is this? And what are the practical consequences of them closing the account? – feetwet Sep 8 '15 at 21:56
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    Of course you do, there are plenty of other banks in the world. – Dale M Sep 9 '15 at 12:00
  • It's pretty obvious what the results of their investigation were -- you're engaged in high-risk activity by soliciting payments from people you don't really know. This is not something that a consumer product like QuickPay is meant to handle. It's a total mismatch in the risk profile department. It's not worth their time or trouble to try to tell you to stop or change your behavior, so instead they'll just give up your business. (You may not realize this but there are thousands of people who can't get bank accounts because of perceived risk.) – David Schwartz Sep 17 '15 at 12:08
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Both of your question are creatures of contract. Their disclosures when you set up the account (or potentially amended disclosures or terms they've mailed to you subsequently) control both of these questions. They don't have to share the results of their internal investigation against you (they do have to give you proof that the deposit/transfer was fraudulent), but that does not give you access to their internal investigative process or its findings.

They cannot shut down your account based on protected reasons (race, class, gender, religion, etc.), but the can certainly close an account pursuant to their operating procedures, their rules, terms and conditions or disclosures - all of which you agreed to (implicitly or explicitly) when opening the account.

There is likely nothing you can do about either of these issues, unless the contract you formed with them by opening the account gives you that right, which would appear in their terms of service, disclosures, etc., and these almost always protect their right to do most anything when it comes to protecting the overall best interest of the corporate entity.

2

Well, the Chase QuickPay agreement has a paragraph "Termination" that says they can close that service for "any reason":

We may terminate or suspend this Agreement, or terminate, suspend or limit your access privileges to the Chase QuickPay Service, in whole or part, at any time for any reason without prior notice. The obligations and liabilities of the parties incurred prior to the termination date shall survive the termination of this Agreement for all purposes.

Two paragraphs later there's a "Binding Arbitration" section, so unless you can get that stricken somehow, your only legal recourse is to file a claim before the American Arbitration Association, not sue in court.

The QuickPay agreement doesn't say they can close your account, but there's probably some other agreement for an account that has similar language.

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If you have been regularly trading bitcoins for money then its quite possible that you have been acting as an unlicensed money services business, which is a crime. The fact that you have been doing this in your spare time doesn't matter: if you trade currency for a profit without going through a licensed exchange (which localbitcoins.com isn't) then you are acting as an MSB. This is a federal felony carrying a maximum of 5 years in jail. There are probably state laws that you are also failing to comply with.

MSB licensing terms require mechanisms to know your customer and track suspicious transactions. It doesn't sound like you are doing these things. Its quite possible that your QuickPay source is in fact a fraudster who has been using you to launder their ill-gotten gains.

Your bank also has licensing terms to cope with; if they see a customer doing something suspicious then they are legally required to inform FinCEN and in serious cases cease doing business with the suspicious customer. This is what has happened to you.

Perhaps the closure of your bank account will be the end of it. If so then go find a new one and count yourself lucky. But if I were you I would find a lawyer now rather than waiting until you are arrested and have to do it in a hurry. Look for someone who is good at negotiating federal plea bargains because if they do arrest you they will have your complete financial trail plus whatever you said to your bank manager to use as evidence against you.

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