Can the police freeze your bank account?

The police have a wide range of powers that they can use during and after criminal investigations. Unfortunately for some, this includes the ability to freeze bank accounts, and these freezing orders can be applied in a wide range of different contexts. 

In this article, we outline which laws allow the police to freeze bank accounts, the kinds of situations in which account freezing orders might apply, and what you can do in these various situations. 

 

Account freezing orders defined

Account Freezing Orders (or AFOs) were introduced in 2018, through an amendment to Part 5, Chapter 3B of the Proceeds of Crime Act 2002 (or POCA). 

This act allows a range of different enforcement agencies, including the police, HMRC, the Serious Fraud Office (SFO) and the National Crime Agency (NCA), to apply to the Magistrates’ Court to stop money being moved into or out of specific bank accounts. 

The duration over which these freezing orders might apply can vary. The initial order will generally last for up to about 6 months. This can be extended, however, for up to a maximum of 2 years. After this, the agency must either initiate forfeiture proceedings or return the funds. 

 

When are freezing orders used?

AFOs can be used in an incredibly wide range of circumstances. They could be used on accounts that are suspected of holding money related to other people’s or parties’ criminal activity, or on accounts that are directly implicated in financial crimes like fraud. 

Most AFOs aren’t actually applied for by the police. The majority of applications are made by the NCA, often after receiving a suspicious activity report (SAR) from the bank that manages the account.

 

Civil burden of proof

One really important thing to note about account freezing orders is that they usually operate under a civil burden of proof. What this means is that you don’t have to be found guilty of a criminal offence, or even be under formal investigation for an offence, for an AFO to be used. 

Instead, the court only needs to be shown that there are reasonable grounds to suspect that there is a link to criminality. If this can be shown, then the magistrates’ court will likely grant the freezing order. 

This lower burden of proof means that it can be a lot trickier to prevent these kinds of orders. It isn’t impossible, however; it just becomes a lot more important that your legal team has experience dealing with these kinds of orders, and knows how to properly scrutinise the evidence of suspicion that is presented by the NCA, the police or some other agency. 

 

Opposing an AFO

Luckily, you don’t always just have to wait for the authorities to finish their investigations for the AFO to be released. There are a few different ways to challenge an AFO using much more proactive strategies. 

Apply for exclusions

Even without actually contesting the order itself, it is often possible to apply to have certain funds released. Typically, these funds might be released in order to pay for reasonable living expenses, like household bills, or to pay for business operating costs such as payroll and business rents. 

Contest the reasonable grounds

The most direct and complete way to challenge an AFO is to show that there is no reasonable suspicion that the accounts involved are associated with criminal activity. 

The bar can be relatively high here, due to the civil burden of proof. Still, an experienced solicitor will be able to carry out a detailed audit of your financial history, and if each and every transaction can be shown as legitimate, they should be able to successfully challenge and overturn the freezing order. 

Procedural grounds

There are also a range of rules which govern how these orders are processed. Even if the facts of the agency’s argument aren’t clearly contestable, it can be possible to find issues in other areas that can be used to your advantage.  

Importantly, the agency which applies for the order has a responsibility to give the court any evidence which might help your case. If they do not disclose everything, you can apply to have the AFO dismissed based on these procedural issues.

 

Preventing forfeiture

While AFOs are not permanent, they do often lead to forfeiture, which is permanent. In these situations, if the forfeiture order is successful, the frozen funds will be permanently transferred to the state. 

One of the most important things to do to avoid forfeiture is to investigate and contest the grounds for the Account Freezing Order itself, as soon as reasonably possible. The arguments made in this order will lay the groundwork for the arguments made for forfeiture, and you want to get on top of it as soon as you can.

The longer you leave things, the stronger the position of the agency in question will likely become. Forfeiture is not an inevitability and will require an additional Account Forfeiture Order to be made and accepted. 

 

What you should do

If the police or another agency has frozen your accounts, you’ll need to act fast. Start by checking with the bank whether this is actually due to an AFO, or whether you’re experiencing another issue. Beware, the bank may not be able to provide you with much information. 

Get further legal advice as soon as reasonably possible, and start to collect records. Every email, letter and document that you exchange with the bank or enforcement should go to your solicitor, so that it can be used as evidence. Likewise, start to gather evidence of the legitimacy of your funds, whether that’s payslips, invoices or something else. 

Account freezing and forfeiture orders can have an immense impact on your life, and it’s crucial that you take steps to minimise this impact wherever possible. With timely assistance from an experienced legal team, you will often be able to contest the order or, at the very least, ensure that you free up enough funds to live your life, pay your bills and limit any further impacts on any legitimate businesses you’re involved in.