Bank Abruptly Freezes $48,000 in Customer’s Account, Denying Access to Funds and Refusing to Verify Identity: Report

A Tennessean woman says her bank has abruptly frozen tens of thousands of dollars in her account – even after she took additional steps to prove her identity and verify the source of her funds.

Torrie Jackson says she and her husband received more than $68,000 in back taxes from the IRS earlier this year, depositing the money into their Green Dot Bank account, reports the NBC-affiliated news station WSMV.

Jackson says she began withdrawing large sums of money in July with the intention of closing the account, when the bank blocked her from accessing the remaining $48,000.

“You freak out because you need those funds to take care of your business. Our kids had some things, so we were going to help them pay off some bills.”

According to Jackson, her account was flagged due to a vague and unexplained suspicion of unusual activity.

“All I did was withdraw my money, and they could not explain to me what the unusual activity was.”

Green Dot Bank is partnered with Walmart and TurboTax and specializes in processing tax refunds for its 33 million customers. In the first six months of 2023, the bank processed about 13.78 million in tax refunds, according to a U.S. Securities and Exchange (SEC) filing.

Jackson says Green Dot requested that she verify her identity to regain access to her account. So she sent the bank a copy of her driver’s license, a utility bill and a copy of her IRS refund letter.

But according to Jackson, the bank refused to validate her documents, and the funds in her account remain frozen more than two months later.

“I call them every day and they have the same answer. It’s devastating. I really don’t know what to do at this point.”

In a statement, Green Dot says it has reached out to the IRS about Jackson’s funds.

“We have communicated our concerns regarding the funds to the customer and have provided guidance on who to contact, including the IRS, for information and updates on the status of the funds. It is our understanding the IRS is processing this case and more information should be available for the customer soon.”

Green Dot has also suggested that the Internal Revenue Service will step in directly, requesting the bank reroute Jackson’s remaining funds back to the government agency.

Jackson says she’s received an entirely different message from the IRS.

“I’ve called the IRS. The IRS said they have no idea what they’re talking about. I was told once the IRS issues a tax refund, their hands are out of it.”

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