Bank Account Searches: Are They Permissible

September 26th, 2022 by admin Leave a reply »

Lawyers and other professionals contact our office every day and ask whether it is permissible for an asset search company or private investigator to conduct bank,Guest Posting stock, bond or mutual fund account searches on a subject. The short answer is “no”.

Not only is conducting a bank, stock, bond, or mutual fund search considered to be an invasion of privacy, but it is also considered to be an unfair and deceptive business practice. More important, any company that claims to be capable of conducting bank account searches in this day and age, (and there are a number of them) is doing so by using false pretenses. If that was not enough, the Board of Bar Overseers has also come out and stated that an attorney, who has a bank account search conducted on their behalf, could be held vicariously liable. Finally, the Attorney General’s offices, in a large number of states, have aggressively sought and obtained injunctions and heavy fines against asset search companies who conduct bank account searches.

Therefore, when you have to satisfy your “due diligence” on behalf of your clients by conducting an asset search, contact a reputable company who knows what is permissible and what is not. At Asset Searches Plus, Inc., we only use trained asset recovery attorneys to conduct asset searches. We provide our clients with access to each and every asset and liability of a subject that is permissible to obtain, in all 50 states, so that our clients can receive the necessary data to fully satisfy their due diligence within (1) to (3) business days.

The long answer as to why you are no longer able to conduct a bank account search is that on November 12, 1999, President Clinton signed the Financial Services Modernization Act into law. Since then, using false pretenses to obtain bank account information, from either banks or bank customers, is considered a federal crime.

The law applies to all banks and financial institutions, including stock brokerage firms, insurance companies, loan companies, credit card issuers, and credit bureaus.

The Act applies to those persons who use false pretenses and any third party requesting the information when it is known, or should be known, that false pretenses will be used.

Certain limited exemptions do apply. Exempt parties include law enforcement agencies, financial institutions, insurance companies conducting claims related investigations, and state-licensed private investigators that are attempting to collect delinquent child support. However, in this case, private investigators must have a court order in hand authorizing the bank investigation.

Financial Services Modernization Act of 1999 – An Excerpt:

Subtitle B–Fraudulent Access to Financial Information

SEC. 521. PRIVACY PROTECTION FOR CUSTOMER INFORMATION OF FINANCIAL INSTITUTIONS.

(a) PROHIBITION ON OBTAINING CUSTOMER INFORMATION BY FALSE PRETENSES- It shall be a violation of this subtitle for any person to obtain or attempt to obtain, or cause to be disclosed or attempt to cause to be disclosed to any person, customer information of a financial institution relating to another person–

(1) by making a false, fictitious, or fraudulent statement or representation to an officer, employee, or agent of a financial institution;

(2) by making a false, fictitious, or fraudulent statement or representation to a customer of a financial institution; or

(3) by providing any document to an officer, employee, or agent of a financial institution, knowing that the document is forged, counterfeit, lost, or stolen, was fraudulently obtained, or contains a false, fictitious, or fraudulent statement or representation.

(b) PROHIBITION ON SOLICITATION OF A PERSON TO OBTAIN CUSTOMER INFORMATION FROM FINANCIAL INSTITUTION UNDER FALSE PRETENSES – It shall be a violation of this subtitle to request a person to obtain customer information of a financial institution, knowing that the person will obtain, or attempt to obtain, the information from the institution in any manner described in subsection (a).

(c) NONAPPLICABILITY TO LAW ENFORCEMENT AGENCIES- No provision of this section shall be construed so as to prevent any action by a law enforcement agency, or any officer, employee, or agent of such agency, to obtain customer information of a financial institution in connection with the performance of the official duties of the agency.

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