Posted by Chuck on June 12, 2017
Misc

Published on June 12th, 2017 | by Chuck

81

Chase Account Freeze due to Financial Review

This is a guest post from my buddy Allen. He has some experience with getting Chase accounts frozen and released multiple times. I also added a few notes of my own and Final Thoughts at the end.

Remember Chuck’s recent post on Chase Cancelling All Accounts of Recent Card Applicants who they Deem Risky? Actually I believe the process they went through are Chase Financial Review (FR). We’re used to hearing about Amex FR, but apparently Chase recently introduced their own review process too.

Introducing CHASE Financial Review

My FR Story

I was newly approved for the Amazon Prime Rewards Visa Signature card in March and British Airways Credit card in April. In mid-May my cards were declined. When I contacted Chase on the number on the back of the credit cards, after some verification questions the representative stated she could not access my account due to “periodic review”. The representative stated it is not a fraud concern, but a periodic review of credit report and a specific team handles it.

After several more calls on both accounts and reaching out to the “periodic review” team, I was able to gather the following info.

What is Chase FR?

Sometimes an account goes through “periodic review”. You will not be able to use the account in question while it is under review. Think of the process Chase’s version of FR.

It’s important to realize that this is an individual credit card freeze. Unlike Amex, Chase doesn’t freeze your entire card portfolio. I can still use all my other Chase cards as normal except the ones under review.

You know you are under Chase FR when your card gets declined. When you contact front-level reps, they can’t access the account, or will tell you to wait maximum of 10 business days, or that someone will call you.

My significant-other also went through the same review process a few months ago on her Ink Business card. The new Ink Business card was declined and frozen for several days.

What Causes It?

The common indicators seem to be:

  • Brand new Chase accounts (regardless of how long you’ve been with Chase)
  • Lots of recent hard pulls
  • Suspicious usage of the new account such as high amount transactions, gift card purchases

Possible Outcomes

There are three possible outcomes of the FR:

  1. Shutdown: This is what got a bunch of people shutdown recently for people that had fairly short history with Chase. Note that this decision is potentially reversible. See Chase Cancelling All Accounts of Recent Card Applicants who they Deem Risky
  2. Clearance: After two weeks under review I was again able to use my accounts normally.
  3. Partial result: This isn’t common, but we’ve seen a report of slashed credit lines and reports of shut down which did not affect all business cards.

How to Deal with Chase FR

There isn’t really anything to do on your end during the review. In fact, if you happen not to use your credit card for a couple of weeks, you may never notice that you were ever reviewed. You can call the department directly at 1-800-290-1316, but they can’t help you until the review is actually finished.

The only indication of the FR in my case was that Chase hard-pulled me (Experian). They never told me they’d do it, I just found a pull on my credit report. My SO didn’t get any hard pull during her FR. [I suspect the hard pull does not come in most cases since they take information off the credit report that they’ve just recently pulled.]

If you do get shut down, you’ll get a letter from Chase indicating such. Before that, you won’t get any sort of communication.

Tips

  1. Do not go crazy with spending on new Chase accounts. My suggestion would be to wait at least wait until the initial 90 days has passed before MSing.
  2. Avoid obviously red flags such as gift card purchases if you can.
  3. The longer history you have with Chase, the better.

My FR Timeline

  • March 31 – approved for the Amazon card
  • April 27 – approved for BA card
  • May 12 – BA card got frozen (after giftcards.com purchase)
  • May 14 – Amazon card got frozen (after large Amazon gc transaction)
  • May 18 – Chase pulled my credit report
  • May 30 – both accounts were unfrozen on same day

Final Thoughts 

While many people have gotten shut down by Chase, it’s interesting to know that there’s actually an FR process during which time the accounts are frozen and reviewed.

The review process seems somewhat similar to the Amex FR process, except that Amex freezes all accounts and asks for your tax returns while Chase freezes specific accounts and might even hard pull. Also, Amex doesn’t usually shut you down while Chase does.

Importantly, the process seems to always start with one or more cards being frozen for review, eventually often resulting in all Chase cards being shut down.

As noted, many people are able to get their accounts reinstated upon request or official complaint. I wonder if some these cases never really got them reinstated, rather were naturally reopened after the review.

Please let us know if you’ve experienced a Chase FR as well.



81 Responses to Chase Account Freeze due to Financial Review

  1. projectx says:

    “The only indication of the FR in my case was that Chase hard-pulled me (Experian). They never told me they’d do it, I just found a pull on my credit report.”

    I didn’t think a financial institution can legally perform a hard pull without your consent. Yes/no? In this case was it because they just took a closer look at your CR from the BA CC app? Your review came just three weeks after approval.

    • joE says:

      Once you have a relationship with them they can hard pull any time they want, it’s stated in their terms. They just choose to do a soft because for their typical marketing or basic review that is all they need.

      Now if you don’t have a relationship with a bank and you did not consent/applied for anything, they can’t just to a hard pull for promotional purposes etc.

      • Jesse says:

        If I saw an unauthorized hard-pull, I’d just report it as fraud and have it removed.

      • Alex says:

        No way that is true.
        They can softpull you at any time (if you are in relationship with them) but they can not hard pull.
        BTW they can get all the same info from a soft pull as they do from hard. Point of a hard pull is to alert other lenders that you are asking for a loan.

      • Maria says:

        “Once you have a relationship with them they can hard pull any time they want, it’s stated in their terms.” -joE
        Completely wrong…and a hard pull without ypur explicit consent is illegal. Thankfully, you don’t write a blog to spread nonsense.

      • TYRONE says:

        “Once you have a relationship with them they can hard pull any time they want, it’s stated in their terms. ”

        No financial institution is allow to do a HP without your permission regardless your relationship with them. If it’s really stated in their terms then they are clearly violated the Fair Credit Reporting Act. They might be looking for a federal lawsuit.

        • Bob says:

          Please provide proof that it’s illegal.

          • Mark Rex says:

            Ill search the act and regulations later if I can find time and post it. Even if they (Chase or anyone) has it in their terms and you agree that doesn’t override state or federal laws and regulations. It is clear though some a few minutes of searching that companies are only allow to request a hard pull of credit with your consent in connection to obtaining credit, employment, housing, security clearances, utilities and some others dealing with you possibly owing them money if things go south.

            I am very busy but Ill try to find the wording for you. If someone beats to me to punch. I would file a dispute siting the code (Sec2b.2.1 or whatever) and futhermore asking for proof from the creditor that you applied for credit or authorized a HP. Most disputes over inquires can only done via mail and will serve you better anyhow as you have more room to explain it all and not tied down to explaining it a Twitter post (140 characters).

            —-

            For the Chase FR, do you have to send in tax documents like the Amex FR, or what exactly do you have to do?

          • Mark Rex says:

            I also meant to add to post this, I hope it goes below my first one. But if in fact it proves to be illegal you could take further actions like filing a complaint with the CFB or file a suit. I think a complaint would be enough to ensure it doesn’t happen to others. If there are others this is happening to then maybe a suit or class action suit could be called for. Then if Chase messes with you anymore because of you complaining and doing something about this it would just get worse for them.

    • Sexy_Kitten7 says:

      Yes, JoE and Chuck are right. Banks can HP wo/consent if you have an existing relat. Of course, most banks don’t as a courtesy but you wouldn’t have a legal case to dispute IMO.

      Here’s the relevant law 15 USC § 1681b “FCRA” (a)(1)(F)(ii)

      “[A]ny consumer reporting agency may furnish a consumer report […] To a person which it has reason to believe […] has a legitimate business need for the information […] to review an account to determine whether the consumer continues to meet the terms of the account.”

      https://www.law.cornell.edu/uscode/text/15/1681b

      • Mark Rex says:

        I see nowhere in this where it states they can do a hard pull because you have a relationship with them. Only that they can pull a report for account review which is a soft pull. Again, out of time but Ill look more into later. Thanks for the link.

        • Bob says:

          The law doesn’t distinguish between a hard pull and a soft pull. If Chase does a hard pull, this law says its legal.

  2. Curmudgeon says:

    I usually “break in” my new Chase cards with large purchases – $5,000-10,000 as the first or second purchase and have never had an issue. I’ve had multiple Chase cards for several years and spend at least $50k/year on them, so maybe they are used to that type of spending from me.

    Then again, my wife just got her first Chase card (Sapphire Reserve) and the first purchase was $9500 at a Simon mall and we had no issues.

  3. scott says:

    I find the pattern of spend interesting: get approved for BA card and then made a giftcards.com purchase. Five weeks after getting Amazon card made a large Amazon giftcard purchase. I think the key is not to MS on Chase cards. I stopped doing this about a year ago.

    • Mo says:

      But there are, like, a billion people who MS Chase all the time. I believe its more due to the new accounts, combined with sudden large purchases. And, this whole thing may be due to a recent influx of people defaulting on their credit.

      • scott says:

        Many people have slowed down on MS’ing with Chase cards. I’ve read this on several blogs. Banks such as Amex and US Bank have already totally shut this method down. Chase has been creating stricter rules and looking into unusual spending more. I used to get a new Chase card and immediately put thousands of MS on them with no issues. Now we’re hearing about financial reviews and shutdowns. Chase just has too many good cards to mess with them these days.

  4. ihg newbie says:

    i plan to buy $200 to 300 amazon GC from staples using ink cash every month for my own consumption. would this raise a red flag?

    • joE says:

      that’s small potatoes, I wouldn’t worry about it. Plenty of people that max out their $50k easily, so relax and enjoy the card.

      • The Value Traveler says:

        yeah those are those red small round potatoes for steaks 🙂 Its people that flip that credit line 2-5x in a MONTH…even after going over the 50K limit for INK.

    • VL says:

      The comment not related to MS… just something to bring your attention to

      With such small amounts of GC purchases you do not get much cashback even at 5% rate, but you loose a lot by not using your card for your purchases directly. You do not get any purchase protection, price matching or extended warranty benefits, which are very common on premium cards.

      I personally got to use extra year of warranty on a couple of occasions.

      If you do not care about it – it is totally up to you, but just FYI.

  5. DSP says:

    “regardless of how long you’ve been with Chase”

    So how long has this guy had other Chase accounts and what were they? What were the typical spend patterns on the other Chase accounts? What was the timeline leading up to the Amazon card approval? I find it highly unlikely that Chase would do as described for a veteran customer with other accounts with similar spend patterns.

    Also, please disclose the amount of the purchases and what the CLs are. These are critical details that are not included and make this DP worthless IMO.

  6. Darv says:

    Any new card is going to get a little “crazy” spending since, uh, we need to hit that minimum spend target. There’s no easing into it, as perhaps would be the perfect world. There’s only 90 days or maybe 115 with Chase.

    Thanks for the fresh info DoC.

    With both my wife and I, I’ve been trying to keep cards paid down to zero before statements cut so any soft pulls done by any issuers won’t reveal anything they might perceive as “crazy.” We don’t manufacture spend, but Plastiq is our best friend. We “checking spending power” on any large purchases with new Amex cards and calling into Chase to tell them about imminent large purchases, they note the accounts.

    Hopefully this strategy keeps us in the clear. I wouldn’t mind going through a FR so much, although prefer to avoid, but I certainly don’t want my wife to go through that.

    I’ve also read that Barclay does soft pulls and can close accounts or significantly reduce CLs, and we’re into them too, so main thing for us is keeping statement balances close to zero across all cards.

    • Guy Bucktastik says:

      Barclays just sent me a letter. They raised my credit limit on my commence mc from 12500 to 13000.

      I asked for a credit limit last December and was denied with a hard pull.

      • Darv says:

        People say Barclay is quirky. I’ve never had any unusual interactions with them or atypical things happen with my accounts or requests. But yours is one of those quirky datapoints-:)

  7. Gene says:

    What happens to your UR points balance if your account is shut down?

  8. Miles Hustler says:

    About how much were spent on the Amazon and giftcards.com purchase?

  9. Allen says:

    Hey all. I was the original author of this article. I don’t want too into too specific of detail in case Chase tries to track me down. I started my banking relationship with Chase since 2011. I have 9 personal cards and 2 business cards with them.

    For Amazon it was after >90% credit limit utilization on the first statement, approx 40k spent then I got the freeze.
    For BA it was <50% credit limit utilization, before first statement even closed and less than 10k giftcards.com spend.

    I've done similar pattern on BA on my partner's card before in 2015, nothing happened. I believe this is a fairly recent development after 5/24 to catch churners.

    • HarryTheFirstHandle says:

      Wow, that is huge even by the standards on this site. Anyway I think some kind of review is required for such spend in such short time even for your own security – though I would think they should notify before freezing. Thanks for the article and the heads up though I am never going to reach anywhere close to those numbers.

    • Eric says:

      What did you buy on Amazon that added up to $40K?

    • Bob says:

      HAHAHA! You had over 90% utilization in your FIRST month, $40k spend on a card with less than a $44k limit, and you wonder why Chase froze your account?

  10. cm says:

    So, this doesn’t sound like any sort of an actual review, then, does it?

    More like a 2 or 3-week suspension to see if anything else that’s abnormal will come up?

    • Chuck says:

      To me, it sounds like there is a 2-week review process after which they either close your accounts or unfreeze them.

      • cm says:

        But no documentation is required. What exactly is it that they’re reviewing?

        With AmEx, they explicitly require you to produce independently-verifiable proof of income.

        Here, it’s more of a, “gee, is it a case of someone being in distress? Slow down, mate, will you?”

        • Chuck says:

          They look at your credit report and check out how many new accounts you have, your balances, etc.

          • cm says:

            That’s not a financial review, and clearly wouldn’t take two weeks.

          • Chuck says:

            I went through a similar process recently when trying to get a credit limit increase on a Chase card. It took them a solid hour going through my report, speaking to a supervisor, etc. I can imagine such a process taking 2 weeks as it makes it’s way through the powers-that-be.

        • What would you call it if not a financial review?

          • Aahz says:

            “What would you call it if not a financial review?”

            It’s an account review, not a financial review, since they’re not actually reviewing your finances (income, assets, etc) in any way. They’re simply reviewing your accounts (both with Chase and other banks).

          • cm says:

            I’d call it a 2-week slowdown-freeze.

            They probably just want to make sure that the identity of the person isn’t being simply pumped-and-dumped.

            I’d imagine they ensure an absence of certain factors at the end of the two weeks before unfreezing the accounts.

          • I’d say that a two week slowdown freeze is pretty similar to a freeze. Distinction without a difference IMO.

          • cm says:

            > I’d say that a two week slowdown freeze is pretty similar to a freeze. Distinction without a difference IMO.

            But it’s not the “freeze” description that’s wrong… Please re-read your own question. 🙂

          • I don’t understand why you don’t think it’s a financial review, the fact that they are shutting down some accounts after this period (when there is no identity theft) means they are reviewing something, no?

          • cm says:

            I think someone has gotten a whole lot of unrelated DPs together into a table to pretend to be real data, without even providing any links to original.

            IMHO, you’re getting into the #fakenews territory.

          • NinjaX says:

            haha. this is a hilarious conversation. doc, dont worry about what n00bs want to think. i always enjoy a good show. let them do what they want with their naive expectations. i welcome all “deserved” shut downs. tired of seeing CSRs all around me.

          • We will agree to disagree, I’m sorry you don’t get any value out of posts like this but I personally find them interesting and useful.

          • V says:

            Will,
            I find such posts extremely useful because they give me a heads up about which direction the wind is blowing in. Even if such things don’t happen to me now, it’s nice to know what else is out there and what kind of a process and what outcome each bank has for such scenarios.

  11. B says:

    How does this differ when compared to just Chase “closing” the accounts. Is it possible to have the same department review closed accounts? I’ve filed a CPFB complaint for them closing my accounts without any explanation. The only thing I was given is Chase no longer wants me as a client, although my business (Ink Plus) card remains open.

    • Chuck says:

      As we wrote it the post, it seems that they first freeze a card and put it under review, then they decide whether to close all/some accounts.

      • Max says:

        Hey Chuck,

        I was told equivocally that when they close accounts, they close all accounts, ie a full termination of credit card relationship with the customer.

        They closed all my cards but left my checking account.

        • Jimmy Deals says:

          I recently had the opposite happen. I had a couple personal and business credit cards opened at various times the past few years. I recently opened a personal and a business checking account simultaneously in branch on a Saturday with sign up bonuses. By Tuesday they had frozen my online access and I subsequently found out they terminated my banking relationship, both personal and business checking accounts closed. No explanation but I have to speculate I am
          not a profitable banking relationship as I have previously held those same checking accounts with sign up bonus. They tell me It takes 10 business days to get my online access back (checking and credit were the same login). They will mail me checks for my opening checking balances at that time too, which is annoying waiting on the mail for thousands of dollars in checks not to mention no access to my UR until the they unfreeze online access.

  12. Kate says:

    What happens to your ultimate reward points when you get shutdown by Chase? I was thinking of applying for Chase Ink maybe next month (Jul) but I am now scared of losing my existing points.

    Here are the most recent cards I got in the last 24 months:
    Nov 2015: AA Biz
    Apr 2016: AMEX Biz Gold
    Oct 2016: CSR
    Jan 2017: CSP
    4/18/2017 : AMEX blue for Biz
    4/26/2017: AMEX rewards Gold

    So I had 3 personal cards and 3 biz card in the last 24 months…probably more than an average person but fewer than an avid churner…if you can provide any insight on whether it may put me at risk for review/account closure it would be greatly appreciated. I guess if the 3 biz cards doesn’t show up in their review I would be fine.

    • Chuck says:

      You don’t have that many, hopefully you’ll be okay. (The Blue Business shouldn’t count since it’s a biz card.)

    • James B. says:

      Chase is more generous than other banks like US Bank or Amex. After an account freeze, Chase will give you 30 days to unload your URs. US Bank will permanantly forfeit all your Flex Rewards. Amex will freeze your MRs and possibly forfeit them afterwards.

  13. Thanks for the post, Allen. I enjoyed reading it and it’s always good to get discussion and data points started and shared!

  14. JLa says:

    Ummm…. what is “MSing”?

  15. Avi says:

    New CSP frozen today and gone under financial review. Happened after tried buying 2k AGC and the order didn’t go through. Had spend ~$100 in three days before attempting to buy AGC.

    • Chuck says:

      Let us know how it goes.

    • AL says:

      Gutsy! I do hope it works out for you. At the very least it will be a good DP. Personally, I would season my card a little longer before 2k of GC.

    • James B. says:

      In the future, try to gradually increase spending on you credit card accounts. When banks see a sudden increase in spending the fraud dept. automatically reviews the transactions and financial reviews are more likely.

      So the key to successful MS is to gradually increase spending.

  16. Bob says:

    Chuck and William,

    You can’t seriously use this guy as proof that Chase is starting to do reviews on new applicants. He spent $40,000 in the first month on a card with a limit of around $44,000 and it really sounds like he let the card close with that much spend.

    There is absolutely no way Chase would be in business if they didn’t watch out for this kind of behavior.

  17. Mike says:

    The lessons I’m taking from this interesting piece is mainly that risks are higher than I might have thought. If I wanted to MS on Chase credit accounts going forward while steering wide of those risks, I’d:
    + Keep my monthly balances under 50% of the credit line, pay-as-you-go above that.
    + Alert Chase beforehand when buying anything priced at ~10% or more of the credit line, or before purchasing anything at office supply stores that is divisible by $206.95.
    + Make plenty of swipes in non-bonus spend categories.
    + Don’t include MOs to your Chase account transactions.

  18. zaid says:

    I have good credit, i was apply on credit card Chase I have 12,000 approval , When I called to activate the card I was informed that my account was closed and I was given this number to call 800-290-1316
    When contacted, they told me your card was closed

    I told them I will appeal to you in court , why I was given consent and also receipt of the card after you close my account

    This is a scam and a lie
    This bank Chase has become a mockery of customers and transactions

  19. James B. says:

    Hi zaid,

    Can you provide more information? Were all you accounts closed? What reason did Chase give you for the shutdown? Did you make large purchases on other Chase cards?

    • zaid says:

      It’s a new credit card, I received it last Thursday, I called to activate the card and was informed by customer service that my account was closed

      I have not already used the card

      What should I do? Do you raise a case in court?

  20. James B. says:

    Do you have other cards with Chase?

    Probably not worth the trouble to sue Chase.

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to Top ↑