Legal Resolution of Unlawfully Blocked Settlement Funds

Background

Our client, an individual who had been awarded a substantial financial settlement following a personal injury case, encountered a serious obstacle when their bank blocked access to the funds immediately upon receipt. Despite numerous attempts to resolve the issue directly, the client was met with persistent resistance and was unable to access the money that was rightfully theirs.

Legal Context

Banks are required to comply with stringent anti-fraud and anti-money laundering (AML) regulations. While these safeguards are essential in combating financial crime, they occasionally result in the unjustified freezing of legitimate funds. In this instance, the bank’s actions caused unnecessary financial hardship and emotional distress to our client, prompting the need for urgent legal intervention.

Our Legal Strategy

Given the time-sensitive nature of the situation, our team responded promptly and strategically. Our actions included:

1. Direct Engagement with the Bank

We contacted the bank on our client’s behalf, providing full legal documentation to verify the origin and legitimacy of the settlement funds. Despite our clear and prompt communication, the bank continued to withhold access without offering a valid explanation.

2. Escalation to the Financial Ombudsman Service (FOS)

Due to the lack of cooperation from the bank, we escalated the matter by filing a formal complaint with the Financial Ombudsman Service. We submitted all relevant evidence, including court documents and proof of the lawful source of funds, along with a detailed explanation of the impact the bank’s actions had on our client.

3. Legal Submissions and Advocacy

We demonstrated that the bank had failed to act proportionately or reasonably in handling the transaction. We argued that the freezing of the account was unjustified and had caused avoidable financial and emotional harm.

Outcome

The Financial Ombudsman ruled in favour of our client, directing the bank to:

• Immediately lift the block and release the settlement funds;
• Reimburse all legal costs incurred by the client in pursuing the complaint;
• Pay interest on the withheld sum, compensating for the period during which the funds were inaccessible.

This resolution allowed our client to access their compensation without further delay and provided a sense of justice after an unnecessarily prolonged ordeal.

Conclusion

This case illustrates the value of prompt and effective legal action when financial institutions act unreasonably. By advocating strongly for our client and escalating the matter to the appropriate regulatory authority, we ensured a fair and timely resolution.

If you are experiencing similar issues with blocked accounts or unfair banking decisions, our experienced legal team is here to help. Contact us today to discuss your situation and find out how we can assist you.