Banking can be a great way to earn money. While some people bank online and take advantage of the services offered by their bank, others opt for a bank that offers more in-person services.
However, many banks have started to impose restrictions on cardholder activities, making it more difficult for some customers to earn money from the services offered by their bank. Sometimes these restrictions are related to banking practices, but in other cases they have to do with the type of customer a bank is trying to target.
This article lists 5 types of banking bans that you should be aware of if you are considering continuing to use a particular bank. If you are committed to a certain bank, you may want to consider other options before entering into your banking relationship.
What is a bank ban?
A banking ban is a restriction on the types of cards you can use to make purchases or withdraw money from an ATM. Although this type of restriction may make it more difficult for customers to use the bank, this is not always the intention.
Some banks have introduced banking bans to try to prevent fraud.
However, if your bank is one of the banks listed below, you can avoid the ban by ensuring that your transactions are legitimate.
Some banks institute banking bans to target high-risk customers, while other banks use a combination of factors to make their decision.
Whatever the reason, knowing what a bank ban is and how to avoid it can help you protect your bank account.
6 dangerous banking bans you need to know
Theft of the cardholder's name or account number
Your bank may not allow you to open a new account or make purchases if the name on the account or the account number is incorrect. Similarly, if you use someone else's account number, your bank may prohibit you from making transactions until you correct the problem.
If your bank detects signs that you are breaking the law or engaging in other risky or inappropriate transactions, it may ban you from using its services. Any transaction that could suggest criminal activity, money laundering, fraud, risk to the bank or other bad behaviour may be grounds for a ban.
Your bank may not allow you to open a new account or make purchases if the information on the account is incorrect. For example, if the address on the account is not your real address, your bank may prevent you from using the account.
Your bank may prevent you from making card-not-present transactions (online or telephone payments) if it determines that you are making the transaction in bad faith. It is best to ensure that you make card-not-present transactions in accordance with the bank's policies.
Potential for money laundering
Your bank may prohibit you from opening a new account or making purchases if there is evidence that you are using the account to launder money.
Why does your bank prohibit transactions?
Your bank has probably introduced a transaction restriction to prevent fraud. Banks often look out for signs of fraud in order to prevent it. For example, one sign of fraud that banks watch for is increased cash withdrawals.
Banks may choose to prohibit certain transactions to protect themselves and their customers. But this does not mean that you cannot use your bank account if it is subject to a transaction restriction. In fact, many banks allow cardholders with transaction restrictions to continue making purchases and withdrawing money with a PIN or other form of authentication.
If you are worried that your bank is watching you too closely, you can contact them to find out what you are doing wrong. You might also consider changing banks if you feel you are being targeted by a particular institution.
How to get around a bank ban
If you know that your bank has a transaction restriction, there are a few solutions that can help you get around it.
Use a debit card
Many banks offer debit cards, which may be easier to use than a signature card. If your bank offers a debit card, you may be able to get around your transaction restriction by using the card to make purchases.
Use a PIN
If your bank prohibits signature transactions, you may be able to use a PIN instead.
Use an authorised user
If you use your account for business purposes, you can ask the business owner to transfer the account as an authorised user. The business owner must submit a request to the bank, and they must have a legitimate reason for using the account.
A bank ban may prevent you from using your bank account, but it does not mean that you cannot use a debit card or make payments online.
You can use another form of authentication to complete a transaction that has been prohibited and get your money back.
If you are subject to a transaction restriction, you can find out if your bank is watching for other signs of fraud. If so, you can make sure that these signs do not reappear.