Category: 

What Is a Blocked Account?

Article Details
  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 11 October 2014
  • Copyright Protected:
    2003-2014
    Conjecture Corporation
  • Print this Article
Free Widgets for your Site/Blog
Coloring your hair in the ‘30s often came with swollen eyelids, blisters and headaches.  more...

October 21 ,  1879 :  Thomas Edison lit up a light bulb for the first time.  more...

Blocked accounts are any type of bank accounts that have been frozen for political reasons, or that contain funds that are subject to some sort of exchange controls. The term is also sometimes applied to any account that is frozen when the account holder dies. Depending on the reasons behind the action, releasing a blocked account may require the intervention of a federal treasury or revenue agency, rather than a directive from a local court.

A blocked account is a more serious matter than a frozen account. Local authorities can have bank accounts frozen for a number of reasons, such as in relation to a pending divorce action. Those same authorities can lift the freeze once the court case has been settled in some manner. In contrast, a blocked account is rarely related to civil matters between private citizens. Instead, the focus is on issues with the account and the currency contained within that account, and how they relate to some issue that has an impact on the nation.

Ad

One of the main reasons for a blocked account has to do with the exchange rate between currencies. In the event that the currency relevant to the contents of the account is blocked from trading for some reason, there is a good chance that the account will also be blocked until the currency is allowed to be traded on foreign exchange markets once more. In the interim, the account holder is not able to remove funds from the account, although there are situations where the funds can be transferred to another account for internal use in the country that issues the currency.

A blocked account may also come about as a response to some sort of national emergency. In the event there is some sort of political upheaval within a given country, steps may be taken to freeze or block the bank accounts for a period of time. The same strategy may be employed if some sort of natural disaster takes place or if war is declared, since events of this type can and sometimes do render the normal security measures that protect the funds within the accounts inoperable. In situations of this nature, a federal agency or department would be charged with the responsibility of deciding when or if to unblock the accounts. For example, in the United States, the U.S. Treasury department has the power to block and unblock bank accounts under circumstances that impact national security.

Ad

More from Wisegeek

You might also Like

Discuss this Article

lluviaporos
Post 2

You have to be very careful about emails which mention blocked bank accounts.

There is a bunch of scams that go around claiming that your account has been blocked. They sometimes ask you to give them your details directly, relying on your shock at being blocked.

They might even have a link to a fake version of your bank website, so they can get your password details off you and then they have full access to your accounts.

I do a lot of banking online and if someone got access to my account it would be awful. Not that I have all that much money, but still.

Be very careful about any email like this and always go directly to the bank website by typing in the address.

Mor
Post 1

I've heard that this can be a problem with Paypal accounts. I've read a few forums where people hang out who work online and they often depend on Paypal to get their pay check.

But, because Paypal doesn't necessarily need to worry about government intervention, they can block your account for arbitrary reasons or no reason at all. They can do it without warning as well.

There are quite a few help groups set up for people who have had this happen to them. There are hundreds of thousands of people who use Paypal without a hitch, but it is scary that they can hold your money at their whim.

Until there is another option for an online bank account though, most people will continue to use them.

Post your comments

Post Anonymously

Login

username
password
forgot password?

Register

username
password
confirm
email