Freezing accounts – Why it might happen…

Freezing accounts - Why it might happen...
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Written by – Phil A

Understanding why we freeze accounts

With the rise of social media and review platforms providing a forum for customers to share their experiences with a particular establishment, whether it’s a high street bank or new Fintech business like Mode; it is not uncommon that as a potential new customer, you would look at this feedback to shape your opinion or form a decision. And, when there are stories of people being locked out of their account, you would be more than justified to be concerned about putting some of your money in their hands. So, we figured that we’d answer some of the questions you may have about our processes ahead of time, so that if you ever do find yourself with a frozen account you’ll know some of the reasons why that it might have happened, as well as all the steps you’ll need to take to get your account back up and running. And, be reassured that we’re working as quickly as possible to resolve this for you.

As a responsible financial service provider operating under the FCA regulation, we’re required to monitor accounts and their transactions. It’s really important for us to keep our customers and their accounts safe and freezing accounts is a really important step in helping us do that. We only ever freeze accounts if we have to, and as a last resort. 

Whilst Bitcoin may not be regulated by the Financial Conduct Authority, the regulatory body that is responsible for looking after the UK’s financial institutions such as high street banks, Mode as a business is, and we take our obligations very seriously. As a young company in the Fintech world, we’re determined to set a positive example to the rest of the industry and the regulators.

This means that whilst we monitor accounts to ensure our customer’s funds are safe, we’re also on the look out for any unusual activity that might indicate financial crime.

Working with partners to fight financial crime

From time to time we receive reports from other banks, financial institutions and law enforcement agencies with information on transactions and new accounts. This means we may have to freeze the account whilst we look into this and determine if we need to take any action. We always cooperate fully with these types of investigations and part of this means making sure that the money held by Mode customers comes from legitimate sources. 

Protecting you and your funds

We’re committed to keeping your funds safe, and part of this means using the latest technology to keep our customer’s money safe. We monitor accounts for unusual activity that may indicate illegal activity. Whilst we look into this, we may need to freeze the account and ask for more information from you – this is all part of working under UK financial regulation. 

Unfortunately, for security reasons, we can’t always give you details about what is happening and why but rest assured, that when we do ask for information from you, this is only as part of our responsibilities and if we seem a little nosey, it’s because we have to be!

Our robust fraud prevention systems also work hard to protect our customers, and some of these measures that flag up may seem inconvenient but can really pay off in the long run. We recently managed to save a customer thousands of pounds because of preventative measures, which included freezing the account. To read about how we kept these funds safe, check out our recent article on how not to fall victim to what is known as a Safe Account Scam.

Not all frozen accounts are fraudulent

As high tech as our systems are, and as competent as our team is, we don’t always get things quite right. However, we believe it is better to be safe than sorry. From time to time, there are going to be false positives in any system and after freezing your account and speaking with you, we will see that everything is clearly in order. In these cases we’ll unfreeze your account as quickly as possible.

Keeping you safe 

While it may worry you when we freeze your account, you can be assured that we’re only doing this to keep your money safe, and it’s in everybody’s interests to get you using your account again as quickly as possible. Whether we’re helping to fight financial crime, or protecting our own customers from being a victim of fraud, the ability to freeze accounts is a really important tool we use to look after our customers, their money and meet our responsibilities as a financial service provider. 

We hope that if your account does ever get frozen, or you read stories about frozen accounts again in the future, you’ll be able to understand a little better why that is and trust that we’re working hard to get you back to enjoying your Mode account!

 
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