How to Fix a Suspended or Frozen HK Bank Account

Hong Kong serves as a well-established and respected financial center, which means opening a company bank account for businesses is a no-brainer.

However, some Hong Kong companies have their bank account or business account frozen, suspended or closed.

Your bank might suspend or freeze your account for many reasons.

But no matter why it happens, trying to run your business without a bank account is tough, maybe even impossible.

This article gives you a straightforward guide to figuring out how to fix suspended or frozen bank accounts in Hong Kong.

What's the Difference Between Bank Account Suspension and Freeze?

When your account is frozen, you won't be able to access your funds—no withdrawals, transfers, etc.

A frozen account is different from an account closure. It usually comes from legal reasons, like a court order or if the bank suspects illegal activity. 

This can also lead to a negative report to the credit bureaus which leads to low credit score.

Meanwhile, suspended accounts are different: the bank might let you deposit money but not withdraw it. 

Account suspension happens when the bank investigates suspicious activity, if your account has missing information, or if there's a technical issue.

Note that a suspended account can be problematic if you receive regular payments or transactions through direct deposit.

The bank might return those direct deposits because you can't access funds in a suspended account.

What About Closed Bank Accounts?

On a side note, a closed account means you can't use it anymore and can't be reopened.

Banks typically require a valid reason to close your account and must confirm it.

For example, someone who repeatedly bounces checks are subject to bank account closures.

After a bank closes an account, it will not allow banking activities on the account, such as deposits or withdrawals.

If your bank closes your current account, consider opening a new account type (e.g., savings accounts or second chance bank accounts), either with the same bank or with a different financial institution.

Ways to Reactivate a Suspended Bank Account

Contact your bank immediately. They can explain why your account is suspended and what you need to do to fix it.

Be ready to share your account info and details about recent transactions. If there are any strange transactions, explain them and provide proof if you can.

Also, if the bank is looking into suspicious activity, cooperate and wait for their findings.

Another reason for suspension is because of unusual transactions. Explain to them and provide proof like receipts or invoices if you can.

Sometimes, the reason is that your contact info or account details might be outdated. Update them to get your account back.

If missing info is the problem, provide your bank with the required documents.

Sometimes it's just a glitch. The bank will take care of it.

Why Do Banks Freeze Accounts?

Your bank might freeze your account for a few reasons. They keep an eye out for anything suspicious to stop suspected fraud and illegal stuff like money laundering.

If they spot something suspicious, they'll look into it and might freeze your funds until it's sorted out. You can't get to your money until they figure things out.

For example, if you have a checking account and violate the terms and conditions of your agreement, the bank may suspend it.

This could happen if you don't keep a minimum balance, overdraft too much, or use the account for a fraudulent activity.

Another is if you're doing transactions that seem odd, like moving big amounts of money around or doing business in weird places, the bank might freeze your account to make sure everything's legit.

This is to stop things like money laundering or identity theft.

Owing money to someone, like credit card companies or another financial institution, can cause them to get a court order to freeze your account until you pay up.

Regularly reviewing your monthly bank statements can help you identify any unauthorized transactions quickly and report them to the bank.

Usually, the bank will tell you about the unpaid debts and to whom you owe money.

Banks are all about security. 

If they see you spending way more than usual, buying stuff in strange places, or suddenly making a ton of transactions, they might think someone's messing with your account. 

They'll probably get in touch with you to check if everything's okay before they do anything else.

Ways to Unfreeze a Bank Account

First, contact your bank directly. This step is crucial, even if you haven't been informed about the freeze.

By contacting them, you can confirm whether the freeze is a mistake or what caused it.

Next, understand why your account is frozen and learn what steps to take to unfreeze your account.

Upon reaching out to your bank, they may explain the specific transactions that caused the freeze or if you have to provide any documents to fix the issue.

In some cases, your bank might ask for a face-to-face meeting with a bank representative, especially if you're a company director.

The bank may also ask for updated information about the account holder.

Remember, cooperating with your bank is necessary in this kind of situation. 

It's usually the fastest and most effective way to reactivate your account. 

Processing times can vary depending on the bank, so being efficient in your cooperation can speed up the process.

Additional Costs When a Bank Closes Your Account

If your account goes into overdraft because of the suspension and you have automatic payments set up, the bank might charge you overdraft fees.

These fees can pile up fast, especially if the suspension lasts a long time.

Banks might view frequent overdrafts or a consistently negative balance as signs of financial mismanagement.

They could suspend the account to stop more problems from happening.

Preventing Overdraft Fees

The good news is, you can minimize the additional fees.

Once you know are aware of the suspension, reach out to any creditors with automatic payments set up on the account.

Tell them what's going on and ask if they can pause the automatic payments for now to prevent overdraft fees.

Also, even if you can't get to your money, try to keep an eye on your account activity online. Watch out for any debits or fees being added.

How to Recover Your Funds?

If you are in a situation where you can no longer withdraw your funds, we at Air Corporate can help. There is a solution.

We have helped many Hong Kong companies get their funds returned by the bank to their directors or shareholders.

We are successful most of the time. You have nothing to lose.

If you work with us, we will only invoice you if and when you get the funds back.

We only charge a small percentage of the funds you recover.

So, if you have a Hong Kong company with a closed, suspended, or frozen bank account, please contact us at team@air-corporate.com, and we will take it from there.