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How to dispute a fraud notation on Early Warning Services

Question: I was placed in to EWS by Bank of America. I sent a letter to ask that I be removed as I owe them nothing. I was place there due to my business practices. I utilize a local bank in my area for my normal business and personal accounts. I have a customer in a different state. To speed up our payment I open a business Bank of America account and had them deposit our check in that account. Then I wrote a check from that account to the local bank we use. I never wrote a check back and forth to each account as that is kitting. I only wrote checks going one way and on deposited funds from our customer. They closed my account Feb 2014 and held $23,000 of our money for 1 month.

A few months after this was release I got a call from our local branch manager stating that all of my accounts was being closed due to EWS reported by B of A. This was a complete devastation as I have not been able to open a new account. I begged the bank to remove us as we owe no bank any money. They said it stays no other reply. I am stuck not understand what to do next or how long this is on there.

Answer: It sounds like Bank of America may have suspected fraud. Some banks use that term generically even if there is no fraud activity on the account. It’s unfortunate because a fraud notation is extremely detrimental and makes it harder to open a new account elsewhere. A negative notation in EWS remains for 7 years.

There is no guarantee this will work but here is something you can do:

Step 1. Contact the bank and try to get something in writing showing the date the account was closed, why the account was closed and what was reported to EWS.

Step 2. Order your EWS report to see exactly what Bank of America reported. Once you know what has been reported you will be in a better position to dispute the record.

Step 3. Look for reporting errors on the EWS report. Banks will sometimes tell you one thing but report something else to EWS. If this is the case you can request a deletion because the law requires banks to report information that is 100% accurate. Other examples of errors can be incorrect name, SSN, address, amounts, date of last activity, date account first became negative.

Step 4. Dispute the negative item on with EWS. It takes 30 days to complete the investigation. If Bank of America verifies the record as accurate then you can take further steps.

Step 5. If the dispute is verified as accurate by Bank of America then you should make a formal dispute with the Consumer Financial Protection Bureau and your State's Banking Commission Office. In your complaint to the CFPB let them know you have done nothing wrong. If Bank of America is claiming you committed fraud or account abuse, request the CFPB make them prove it. Fraud can mean anything that a bank wants it to. What proof do they have to flag an account as fraud or abuse? What proof do they have that you intended to commit fraud?

I realize it’s a lot to do but in order to make a complaint with the CFPB or your State Banking Commission Office you should first have evidence you attempted to resolve the issue on your own. You may get lucky and the bank may remove the notation based on the dispute. If not, complaints to CFPB and the State Banking Commission Office could help.

Step 6. If none of the above work then it may be time to pursue legal action. Early Warning Services can be sued for reporting inaccurate and erroneous information.

Good luck to you.


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