No, we are not aware of a state law that expressly provides for freezing an account for suspected fraud. We believe your bank’s authority to freeze your customer’s account is governed by your account agreement.

Most financial institutions have language in their deposit account agreements that authorize the placement of a hold on the funds in an account if the bank suspects fraudulent activity with respect to the account. If you do not think that your account agreement contains adequate language for imposing such a freeze, we recommend consulting with your bank counsel.