When Your Bank App Freezes You Out
Neobanks (Chime, CashApp, Varo) are popular for their speed. But they are notorious for their lack of customer service. Their fraud algorithms often flag legitimate accounts, freezing your rent money and grocery funds instantly.
The “10-Day Rule”
Under Regulation E, if you dispute an error (like a missing deposit or an unauthorized charge), the bank has 10 business days to complete its investigation. If they cannot finish in 10 days, they must provide Provisional Credit (put the money back in your account) while they keep looking.
The Violation
Neobanks often skip this step. They freeze the account for “security review” for weeks or months, leaving you with $0 balance and no way to pay bills. This is a violation of the EFTA.
Damages
If a bank’s failure to follow the 10-day rule causes you to bounce checks, miss rent, or suffer emotional distress, you can sue for:
- Actual Damages: Late fees, eviction costs, etc.
- Statutory Damages: Up to $1,000.
- Attorney’s Fees.
We file federal lawsuits to force these apps to unlock your money and follow the law.