Recently, we are seeing a great number of people having all their accounts shut down by Chase. Many people recently reached out to us for assistance on this matter.
Why do Chase shutdowns happen?
Chase is trying to fight what is called bust out fraud. Fraudulent people were building credit by paying their bills on time and keeping their utilization low. Slowly, they were able to build up trust by banks and get approved for high credit card limits. Then they ran up high balances and disappeared.
Experian white papers pointed out the following activities to be considered indicators of a bust out scam:
- Frequent convenience checks
- Frequent cash advances
- Multiple payments made within one billing period from different accounts and different sources
- Purchases from high risk, high-value merchants
- Unusual purchase amounts ($1000 at the dry cleaners)
- Credit line increases
- A lot of new accounts
- Unusual balance growth
It is believed that Chase is following very similar guidelines to detect bust-out fraud. It seems that Chase is also closing down accounts for the following reasons:
- Paying Chase credit card bills with third party checks (even checks that are written out to Chase but coming from a third party bank account)
- Paying Chase credit card bills with cash
- Gaming with reward points, like selling points, etc.
- Lowering your credit limit to avoid paying the annual fee on the Chase Sapphire Reserve, and, Ritz Carlton credit card
Avoiding a Chase shut-down
Obviously, the way to avoid a Chase shut down is by avoiding any of the activities expressed above. Convenience checks, cash advances, multiple payments within the same billing cycles coming from different accounts, third party checks, cash payments, high risk or high-value purchases, unusual purchasing patterns, should all be avoided while using any of your Chase credit card accounts (if one goes then so will all).
What happened frequently, when a person was shut down by Chase, the authorized users on their accounts had their own accounts shut down too. So another way to avoid a Chase shutdown is not to be an AU on any other Chase account without checking into it first! (Bad friends were never good for anything!)
Also, make sure not to apply for a Chase account or ask for a credit line increase if your credit report is showing many recent credit inquiries, a lot of new credit, or high credit utilization. This may cause your existing credit cards to get shut down too.
Reviews may also be triggered randomly, even if you don’t apply for a credit card. Chase always has the right to make a soft credit pull on any customer’s credit report. (When I recently reviewed my Experian credit report I found 3 soft credit inquiries done by Chase).
What can be done after I was shut down by Chase?
Chase claims they have the right to close any customer’s accounts at any time for any reason. They usually do not give much of a reason to the consumer as to why they were shut down.
Some people are reporting that they have managed to have their accounts reinstated after reaching out to Chase to be reconsidered.
If you feel you were unfairly shut down by Chase, I recommend you call Chase corporate to have it investigated and reconsidered. You can ask your local banker or branch manager to help you get connected to the corporate office.
If you feel your accounts were shut down due to discrimination you can file a complaint against Chase with the Consumer Protection Financial Bureau. Chase will need to respond to your complaint.
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Chase shutdowns are not for life
Once you’re shut down by Chase it can take years for you to get back in. But shutdowns are not for life. At the same rate that I hear people getting shut down I also hear people getting back in. The average is about 7 years but I have seen some going quicker as well (and some longer). If you’re shut down, I recommend you try to apply for a Chase credit card once a year and see if you get approved or not. If you do get declined, don’t try again every day, wait till next year and hopefully one day you will get the good news and your account will be approved.
Conclusion
The recent Chase shutdowns target many people for many reasons. You can try to have shutdowns avoided by being a really perfect consumer without any ‘shtick’. If you run a life or a business that requires you to behave in a bit more of a complicated manner than what was outlined above, then rather don’t bother with Chase.
At Help Me Build Credit we can help you choose the perfect new credit card. Just go to our Ultimate Credit Card Finder and choose one from there.
Thank you!
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wow! very INFORMATIVE, straight to the point post!
awesome info WITHOUT the nagging to apply for new credit cards !
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i RECENTLY HAD ALL MY CHASE ACCNTS CLOSED, I WAS SEARCHING THE WEB FOR ANYTHING THAT CAN BE DONE , BUT DIDNT FIND ANY SOLUTION UNTIL……. I CAME ACROSS THIS ARTICLE, I CLAIMED CHASE AT THE SMALL CLAIMS COURT I GOT BACK MORE THAN $5000 WORTH OF POINTS! [THATS EVEN MORE OF WHAT HAS BEN TAKEN AWAY]
THANKS BILLO GREAT SITE,
I am very happy to hear that. Nice job!
hello sam!
I hope you can help me with this,
Amex just closed all of my accounts due to F/R, But I did provide the requested doc., they claimed I was deemed risky….blah blah blah……. IS there anything i can do to get reinstated? I called the reg. F/R department, but they are just robotically UNHELPFUL
any help is greatly appreciated, tnx!
Did you ever try reapplying?
Hey Sam, I was shut down by chase two years ago. I recently called the executive office and opened a dispute case to have chase review my account closing to see if I am eligible to possibly reopen my account. The process took approximately 3 weeks. They just called me back and told me that they cannot give the me reasoning behind their decision but that I can now reapply for chase credit cards, but NOT any chase banking accounts. The number that I called was 877-658-5560.
Thanks for sharing your experience. Did you try to apply for a credit card and get approved?
Once you are shut down by chase, how long can they KEEP you shut down? Meaning is there a time period that will allow you to reapply for a new account, let’s say 3-4 years later?
Not sure about a specific time frame. It depends on case by case. You can keep o trying to reapply and see if they will approve you.
Thanks sam!you always have great informative articles
Thanks, Tzvi!
thanks for the quality article.
is chase known to shut down accounts that do heavy MS, specifically through buying groups (like spending 40k a month at bestbuy, amazon etc… which on personal cards could definitely look suspicious)?
and secondly, if the answer to the question is yes, can you explain why they would care if your spend is MS? because they’re still making the interchange fees on the spend regardless of whether it’s MS or not!?
obviously you also have to account for the fact that those that do MS know how to maximize the value of the UR which chase pays out on the spend, so that ends up eating into the money they make from interchange, but i would think that their net net is still in the positive (something like +0.5% on all spend). so shouldn’t they love heavy MS’ers??
thanks.
MS is considered gaming with points as they are mostly used to knock out a welcome bonus etc. or getting cash from your credit cards which Chase wants you to pay cash advance fees, not MS. With buying groups they might have an issue with the third-party checks or the many luxury items purchased as this can be indications of bust-out fraud based on the triggers they set.
@sam Yes, I understand that the account activity patterns of heavy MS’ers/churners looks similar to the patterns of credit seeking behavior/bust out fraud, which can trigger the algorithms to group them into the same category and ר”ל initiate a shutdown even though the MS’er has a completely different agenda than the actual “bustouter”.
But besides for the robotic algorithm and low level CSR’s (not that much less robotic), do corporate executives/decision makers at chase deep down in their hearts really love heavy MS’ers for the consistent revenue they generate for the bank?
I hear what you’re saying about SUB’s and free 0% cash advances. but in the case of SUB’s chase has already instituted “anti churning” measures to limit the exploitation of them with hard rules such as 5/24, so i’m not really talking about typical small time MS to hit SUB’s, rather consistent heavy MS that doesn’t stop after getting the SUB (thus at some point chase makes back their “investment” of the SUB and from then on all spend is profitable for them).
And in the case of “cash advances” real MS’ers are not doing their MS for that, and if in theory chase would be able to eliminate all MS it’s not like all those MS’ers would now go and start taking real cash advances.
if you have any insight on this I would much appreciate.
Is ok to pay chase credit card from a bank account that I’m not a user on it? (spouse father etc.)
Chase does not like it
Chase is the Stereotypical, heartless, cold hearted institution.
The closed my wife’s account out of nowhere yesterday.
Thankfully, we inherited my father-in-laws’ money manager! We are now using the bank he works for- UBS.
BYE-BYE, CHASE!!!
Chase closed our account yesterday, no warning, no reason, after branch manager called twice to “corporate”, he could only tell me they have that discretion. Not sure why two old people with direct deposit of their payroll and auto pay for utilities would be cancelled, but oh well, a 27 year customer must not be that important. We are not gamers, cash only, drug dealers, just common folks with never an overdraft. We are now with a credit union. And will never go back to chase.
They closed out all my accounts which affected my credit score tremendously and left me with no money to pay my bill it look as if I never had an account there no recent transactions or anything I think they are crooks and should be jailed