When a frozen account threatens your operations
A frozen business bank account can bring trading to a standstill. Payroll cannot be met, suppliers go unpaid, and day-to-day operations halt — often with no advance notice. For Jersey businesses, the effects can be both drastic and immediate.
Parslows LLP advises directors, shareholders and business owners facing urgent account freezes, helping you understand the legal position and take decisive steps to restore access to funds.
What happens when a business account is frozen?
The bank blocks outgoing payments and restricts access to funds. Card payments, standing orders and transfers may fail without explanation. Incoming payments are often affected as well.
For businesses, this can quickly result in missed payroll, ITIS, Social Security and GST obligations, supplier disputes and contractual breaches, and serious cash-flow and reputational damage. Businesses often discover the issue only after payments bounce or suppliers raise concerns.
Why do banks freeze business accounts?
Banks are under strict regulatory obligations and may freeze accounts where they suspect:
- Fraud or money laundering
- Unusual or high-risk transactions
- Regulatory or compliance breaches
- Court judgments or enforcement action
- An Account Freezing Order under the Proceeds of Crime legislation
In some cases, accounts are frozen while the bank conducts internal reviews or awaits further information.
Can a bank freeze a business account without notice?
Yes. Banks are entitled to freeze accounts without prior notice. Informing the account holder in advance may be unlawful where an investigation is ongoing. Notification typically follows only after restrictions are in place.
How long can a business account stay frozen?
Timeframes vary significantly. Administrative issues may be resolved within days. Regulatory investigations and Account Freezing Orders can last months and, in some cases, longer. The longer a freeze continues, the greater the risk to business continuity.
How Parslows helps businesses resolve account freezes
We assist businesses by:
- Identifying the legal basis for the freeze
- Engaging directly with banks and regulators
- Challenging unjustified or prolonged restrictions
- Applying to the court where necessary
- Advising on business continuity and risk management
Early legal intervention can significantly reduce disruption.
Get urgent legal advice for your business
If your business bank account has been frozen, time is critical. Contact Parslows to speak directly with a Jersey litigation specialist.
Frequently asked questions
Yes. Banks are legally permitted to freeze business accounts without prior notice, particularly where they suspect fraud, money laundering or regulatory breaches, or are acting under a court order. Notification usually follows after restrictions are imposed.
Outgoing payments are normally blocked. Wages, supplier invoices, rent and tax payments may not be processed, which can quickly create operational and reputational risks.
Common reasons include suspected suspicious activity, compliance or KYC issues, court judgments, unpaid liabilities, or an Account Freezing Order linked to a regulatory or criminal investigation.
This depends on the cause. Administrative or compliance issues may be resolved within days, while investigations or Account Freezing Orders can last months and may be extended by the court.
In most cases, no. However, where payroll or essential expenses are at risk, it may be possible to apply for restricted access with legal support.
An Account Freezing Order is a court order preventing access to funds while an investigation is ongoing. It can severely restrict trading and may last up to three months initially, with the possibility of extension.
This depends on the reason for the freeze. In some cases, new accounts may also be restricted. Legal advice is strongly recommended before taking action.
Immediately. Early legal intervention can reduce disruption, challenge unjustified freezes and help protect business continuity.
Alexander English is a Partner at Parslows LLP and heads the litigation and dispute resolution department, with more than 20 years’ experience across commercial and civil litigation matters.