Your bank has the right to cut you off anytime it wants. But why exactly would it break up with you?
There are the customers who bounce checks, constantly overdraw their accounts, commit fraud or otherwise lose the bank money. Those are the easy ones to get rid of.
But then there are the customers who fall into a gray area.
Banks are urged by federal law enforcement agencies and regulators to close questionable accounts -- or else risk getting hit with penalties. So they often end up shutting accounts even when a customer isn't doing anything explicitly illegal.
If a customer is merely involved in an industry considered high risk or engaged in an unpopular or "unsavory" line of work, a bank may deem it safer to cut off the relationship, according to Robert Rowe, senior counsel at the American Bankers Association, which represents the nation's largest banks.
"[The government] is putting us in a position where we're expected to be the judge, jury and prosecutor," Rowe said.
In guidance to banks, the Federal Deposit Insurance Corporation lists 30 business categories that have been linked to "high-risk activity," including gun sellers, home-based charities, payday loans, dating services, escort services, fireworks suppliers, cable box de-scramblers, coin dealers, credit card repair services, gaming and gambling websites, and telemarketing companies.
Another category on the list: pornography, which became a hot button issue recently after news reports said that "hundreds" of porn stars suddenly had their bank accounts closed by Chase (though a source close to the matter said Chase doesn't have a specific policy prohibiting porn stars from having bank accounts).
When you open a business account, banks can determine if you are in a "high-risk" industry by running a background check and continuing to monitor the types of transactions that are made once the account is open.
The FDIC also recommends that banks look at the volume and nature of consumer complaints filed on websites like the Better Business Bureau. A company that requests a large number of returns or charge backs (which often occur when a customer is dissatisfied with a purchase), should also raise red flags, according to the FDIC.
Other reasons for heightened suspicion: customers who give unclear descriptions of their businesses when opening accounts, as well as those who make multiple transactions that don't seem to make sense, according to Protiviti, a consulting firm that helps banks prevent money laundering, human trafficking and terrorist financing.
For personal accounts, there's a whole other set of warning signs that banks are looking out for.
Among them: If you have no record of current or past employment but make frequent, large transactions, you don't live or work anywhere near the city or state where you've opened an account, you have many accounts under a single name, you have past convictions on your record, or you provide phone numbers that are disconnected.
A sudden surge in account activity, consistently high volumes of transaction activity, multiple round-number transactions like $50,000 or deposits just under $10,000 (since banks must report anything above that amount to law enforcement), constant visits to safe deposit boxes and big purchases of valuable items like precious metals or fine art are some of the other forms of activity that could indicate fraud like money laundering, according to Protiviti.
What it all comes down to is that your bank reserves the right to shut your account at any time, for any reason. And because the institution is held liable if an account ends up being connected to fraud or damaging the reputation of the bank, it is often going to take a "better safe than sorry" approach, said John Ulzheimer, credit expert at CreditSesame.com.
"Nobody has the right to a credit card, a bank account, a debit card or a merchant account," said Ulzheimer. "You have to earn it and the banks set the rules. If you are what they perceive to be too risky, they'll shut you down and you have no recourse."