What to Do When Your Bank Blocks a Transaction

It’s no secret: traditional banks are heavily regulated, particularly since the 2008 global financial crisis ripped through the world economy like wildfire.

Banks have boxes to tick. Compliance hurdles to jump through. Obligations to meet. And ultimately, these financial monoliths are out to protect their interests.

Sometimes this affects your business severely, resulting in a problem: your bank may block your transactions — leading to needlessly long delays before your client or supplier can even receive your funds.

If you’re running a business, this can be infuriating — especially during difficult times. Let’s say there’s a supply chain rupture — how will you keep your customers and suppliers onside when they’re dogging you for late payments?

However, there are steps you can take. Let’s delve into the details.

This article at a glance

Blocked or delayed transactions are a detrimental but inevitable by-product of a global supply chain dominated by traditional financial institutions. Banks block transactions to safeguard their interests in the event of suspicious activity in your account or to comply with regulatory standards. You can work with your bank’s anti-fraud team to tackle the problem, but if it persists, choose an alternative to traditional banking that protects 100% of your money.

Why did my bank block a transaction?

There are various reasons why your bank blocked your transaction. They include the following:

1. Low threshold for suspicion
2. Highstreet banks use sensitive systems to detect potential concerns regarding funds and customers. They might also file Suspicious Activity Reports (SARs) to safeguard their interests.
3. Compliance with regulatory obligations
4. Sometimes, your bank may not even divulge any information to avoid alerting anyone of a SAR or investigation. In these instances, your bank may tell you that they’re complying with regulatory obligations.
5. Human errors or mistakes by automated systems
6. Highstreet banks are usually still running on outdated banking systems, and their automated systems make mistakes. Furthermore, banks still rely heavily on paperwork, which is vulnerable to human error.

What can I do when my bank blocks a transaction?

1. Scrutinise your online banking transactions
2. If you can still access your online banking, look through your recent transactions and note anything suspicious.
3. Contact your bank’s fraud team
4. While the bank may not divulge the exact reason for declining your transaction, you can still try to clarify matters with them. Request to speak to the fraud team — they have the ability and resources to take an in-depth look into your account. If there’s a transaction causing the block, ask if they can explain the reason. If your bank refuses to assist, you can file a formal complaint.
5. Take it to the Financial Ombudsman Service (FOS)
6. If you receive a deadlock letter after complaining to your bank, consider escalating things to the Financial Ombudsman Service (FOS). However, this can only be done eight weeks after you have filed your complaint with your bank.
7. Create a new business/payments account as soon as possible
8. If you can’t resolve the issue, consider setting up a business account with a new provider to facilitate a smoother payment process. Choose another high street bank (and be faced with the same system predisposed to blocking transactions) or an alternative payment process to optimise your business’s efficiency.

I need to make an urgent payment. What else can I do?

There are options beyond traditional banking. Fintech payment service providers cost less in account maintenance fees and are often free to set up. And most are less stringent in regulatory requirements.

The choice is simple: choose Silverbird.

Silverbird is the first fintech designed exclusively for international trade, offering support for large international transfers, global business accounts, attractive foreign exchange rates, and local EU/UK bank details.

Opening a Silverbird account is free, 100% online and boasts 0% maintenance fees. Best of all, Silverbird accepts over 98% of international trade applicants.

With a Silverbird global account, you will no longer be restricted to only SWIFT international payments when sending money overseas. Silverbird also offers local payment solutions in 20 countries to pave the way for more efficient and cost-effective business international transfers. Silverbird allows you to rest easy with its safeguarding process — 100% of your funds are kept at reputable Tier-1 banks in the UK and EU.

Author: Melissa Yeo

Illustration: Kate Faldina

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