Notice on Account Freeze, Levy or Garnishment?

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Question:

Is a bank required to notify a customer that a hold is being placed on his account when a freeze, levy, or garnishment is received?

Answer:

Your best reading resource would be the document you received or a review of the statute that authorized the governmental entity to send the claim. For example, the notification of an IRS levy clearly indicates you are to notify the customer after the levy is processed. The notices of garnishment or attachement in my home state include copies that the bank is required to forward to the customer.

Regardless of whether you are required to notify the customer of the claim, I encourage you to do so as a courtesy if nothing else. I would recommend that your notice also indicate the action you took on the claim; i.e., how much money did you take/hold and from which account.

First published on BankersOnline.com 3/01/10