Amex, Capital One, Schwab, & Others Closed Account Without Notice

[Anonymous]

Hi there,

I've researched this for weeks and spoke to multiple professionals about this issue and still no answers. 12 years ago I was convicted of a federal crime, when I was 18. I made a bad decision but I paid my debt, had no restitution, judgements, etc.-

I've had good standing accounts for 3-5  years with American Express, Capital One, Chase (consumer credit cards), along with TD Ameritrade, Charles Schwab (ROTH IRA/Investment funds). Two years ago, I noticed my AMEX account was terminated. A year later, my Capital One and USAA account was closed. I wasn't given any notifications about these closures. A few months ago, my Charles Schwab and TD Ameritrade accounts were also shut down.

I began calling each company, trying to find the reason. Almost every response was the same: "It was a business decision" or "Our terms of service allow us to shut down any account without discretion". I pulled my tri credit report to see if anything happened- it was normal (11 yrs of credit history, no late payments, no collections, low income to debt %). When I spoke to Schwab and Amex I asked if it had anything to do with my credit score or profile. Their answer was "No". 

My financial advisor who managed my ROTH IRA at Schwab called me after my account was closed and said he spoke to a friend at Schwab and apparently it had to do with me being on the 'AML' or anti-money laundering list. I have no clue how to launder money, FYI. But I then figured it may have to do with my felony over a decade ago.

I pulled my Chexsystems report and it was completely fine. I even pulled my LexisNexis Risk Solutions report and nothing was there.

My question is if anyone knows what possible third party company or screening service all these institutions are using so I can approach them directly and dispute the anti money laundering flag. 

I'm also wondering why, after 3-5 years of using these institutions with no issues, and a decade after my felony, would all of a sudden all my accounts get terminated? 

Any feedback or insights is appreciated. I know I made a bad decision, but it's been over a decade. I'm hesitant to open new accounts at different companies due to being blacklisted there as well. 

Thanks!

[FinStar]

There's third party providers such as LexisNexis and others that you can check, especially if there are public records that still have this information somewhere.

But, here's the thing, when it comes to reputational risk for any financial services firm, if the felony conviction was due to (or associated with) any financial crimes which may have placed you on any type of AML watch list, financial institutions have a way to legally share/exchange this information internally with each other and this type of information cannot be obtained from them, unfortunately.  

[CBartowski]

Hmm that is odd. Sorry you have to go through that.

Any indication of ID theft or anything like that? I would have recommended Chex, another may be EWS?

I agree with @FinStar , if the crime was financial in nature, I could definitely see that affecting things.

[USMC_Winger]

Sorry you're going through this.  Check your CoreLogic report to see if it lists your conviction or any erroneous data indicating a financial criminal conviction.  If your report does contain a financial conviction, then your financial institutions may have consulted CoreLogic for background checks to determine whether their customers have been convicted of financial crimes and terminated your accounts accordingly.  CoreLogic does criminal background checks, particularly on prospective residential tenants  (https://www.corelogic.com/products/criminal-screening.aspx) and employment background screening (https://www.lemberglaw.com/corelogic-employment-background-check/ ). According to CoreLogic's website:

"Our resident background search accesses criminal records across the country to help you determine if a potential resident has a background containing violence, property destruction, sex offense or financial crime."

And according to Lemberg Law:

"CoreLogic provides income, identity, social security, military service verification, criminal history, motor vehicle records and other data that employment background check companies and others use to create background check reports."

Also check the Dept. of the Treasury's Specially Designated Nationals And Blocked Persons List to see if your name is mistakenly on it, or even a very similarly spelled name (https://home.treasury.gov/policy-issues/financial-sanctions/specially-designated-nationals-and-block...).

[IntegerIntrovert]

I appreciate you bringing this issue up. Can you share what you were convicted of? I think that would help determine what may have caused the blacklisting.  

Irregardless I think everyone deserves a fair chance to credit and I would appreciate a clear policy from the banks and CRAs on what constitutes a blacklist.  

Have you offered to sign a NDA with any of the banks executive offices on a disclosure on why you were canceled? It's a long shot but maybe...

You could also try to go small and get in with credit unions. Especially if you are high net worth. They may be more favorable and less likely to check backgrounds. 

I would hope more people who may be affected by this to speak up. It could be a source of research and resolution by the forums. 

[IntegerIntrovert]

More thoughts here, I'm betting there is an off book government list that's being shared with banks related to criminal activity. 

In that case well you're probably out of luck. Maybe setup a Wyoming LLC and use business credit would be my best advice. 

[FinStar]

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@IntegerIntrovert wrote:

I appreciate you bringing this issue up. Can you share what you were convicted of? I think that would help determine what may have caused the blacklisting.  

Regardless, I think everyone deserves a fair chance to credit and I would appreciate a clear policy from the banks and CRAs on what constitutes a blacklist.  

Have you offered to sign a NDA with any of the banks executive offices on a disclosure on why you were canceled? It's a long shot but maybe...

You could also try to go small and get in with credit unions. Especially if you are high net worth. They may be more favorable and less likely to check backgrounds. 

I would hope more people who may be affected by this to speak up. It could be a source of research and resolution by the forums. 

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Unfortunately, due to a FI's adherence to regulatory compliance inclusive of the BSA, AML, etc., the NDA proposal suggested is not viable. 

[NRB525]

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@IntegerIntrovert wrote:

I appreciate you bringing this issue up. Can you share what you were convicted of? I think that would help determine what may have caused the blacklisting.  

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I don't think this would be appropriate additional info. It is likely too easy to triangulate to identify the OP, and all of us here avoid that for ourselves.  

I also appreciate the OP bringing up the issue. I would hope there is a contact provided above who can give more specifics to the OP, and that there is an appeal process through Treasury to get this cleared up. 

OP I would suggest contacting your US House Representative and US Senators from your state, as their offices have significantly more pull with Federal agencies.  

[longtimelurker]

This may not provide any useful info, but have you considered going to a new bank (that perhaps you aren't all that interested in!) and explain the federal conviction and ask if that would cause any issues in having an account with them.  (My assumption is that this "general" inquiry is not covered by the severe secrecy rules impacting actual accounts, SARs etc).

[Credit12Fico]

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@longtimelurker wrote:

This may not provide any useful info, but have you considered going to a new bank (that perhaps you aren't all that interested in!) and explain the federal conviction and ask if that would cause any issues in having an account with them.  (My assumption is that this "general" inquiry is not covered by the severe secrecy rules impacting actual accounts, SARs etc).

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The problem here is there is usually a big disconnect between the front line reps and bankers, and the back office folk who audit accounts. The left hand doesn't know what the right hand is doing. Account that is opened can be closed later (which is what happened to OP already).