Can the bank charge an NSF or overdraft fee while the account is frozen?

A freeze does not by itself cancel a payment that was already set up. If the payment does not clear, the statement can show a returned item or NSF fee. If the bank pays it and the balance goes negative, it can show an overdraft fee. CFPB says yes, a bank can charge an overdraft fee when it takes back a fraudulent check and the account is overdrawn.

Is there a Canadian cap on that NSF fee?

Yes, for a personal deposit account at a federally regulated bank. FCAC says the rules came into force on 12 March 2026: not more than $10, not more than once in 2 business days on the same account, and no NSF fee when the overdraft is less than $10. Business accounts are not covered. A provincial credit union that is not federally regulated follows its own regulator.

Does confirming the fraud mean the fee comes off?

Not as a rule on the pages opened for this guide. Ask the bank to reverse the fee, with the date and the amount. The bank can say no. If an unauthorized pre-authorized debit caused the NSF fee, FCAC says to ask the institution to reverse those extra charges.

Who waives the biller's late fee?

The biller, if they agree. CFPB says a declined payment may trigger a returned item fee from the merchant. That fee is separate from the bank line. Ask the biller with the date the payment was returned. They can say no.

Home / Guides

Fees when a bank account is frozen for fraud

A fraud hold can stop you from using the account while a payment you already set up still tries to leave. If that payment does not clear, the bank can charge a returned payment fee or an overdraft fee, and the biller can charge its own late fee. This page is how to read those lines and what to ask. It does not promise the fee comes off.

Last updated: October 20, 2026

Last checked: Oct 2026

Why a bank restricts the account

Opened 20 October 2026. Two different problems get called a freeze. One is a deposit the bank thinks may not be real. The Consumer Financial Protection Bureau says a bank or credit union can take back a check that turns out to be fraudulent, even after it made the money available and you withdrew it. If taking the money back leaves the account overdrawn, CFPB's answer to whether they can charge an overdraft fee is yes, and it says to contact the bank or credit union about how to fix the situation. That page was last reviewed on 22 August 2024.

The other problem is money that left, or tried to leave, without your permission. CFPB calls that an unauthorized transaction: a charge or withdrawal you did not make or allow. In Canada, the Financial Consumer Agency of Canada says an unauthorized transaction is generally one you did not make or approve, and that each institution defines it in the account agreement. FCAC says to notify the institution immediately, and that a federally regulated institution must investigate and consider the circumstances before it finds you at fault.

Neither page prints a number of days that every bank must keep an account frozen. A hold on one deposit is also different from a block on the whole account. Use the words the bank used with you, and write down the date the restriction started and the date it ended.

Fees that can still hit while you cannot pay

A restriction does not cancel a cheque or a pre-authorized payment that was already set up. If the bank does not pay it, you can see a returned item, NSF, or non-sufficient funds line. If the bank pays it and the balance goes below zero, you can see an overdraft line. The payment and the fee are different lines. Write down both.

In the United States, CFPB says banks cannot charge an overdraft fee on a one time debit card purchase or an ATM withdrawal unless you opted in. Banks may still charge an overdraft fee on a check or a recurring electronic payment without that opt in. If you opted out and the bank returns the item, CFPB says you may be charged a non-sufficient funds fee, and that a declined payment may also trigger a returned item fee from the merchant. This page does not copy a dollar from one bank onto another. Named amounts are on Overdraft and NSF fees by bank (2026).

In Canada, FCAC's 12 March 2026 news release says new rules came into force that day for federally regulated banks. On a personal deposit account they cannot charge more than $10 in NSF fees when the account cannot cover a payment, they cannot charge an NSF fee more than once in 2 business days on the same account, and they cannot charge an NSF fee when the overdraft is less than $10. FCAC's chequing account page says the same three limits, and says they do not apply to business accounts. A provincial credit union that is not federally regulated is outside that page. The dollar each named bank prints is on Canada NSF fees by bank.

The biller's late fee is not the bank's NSF line. CFPB only says the merchant may charge a returned item fee when a payment is declined. It does not print that merchant's price. If your bill shows a late fee, that figure is the one to ask about. Do not invent it from a forum post.

How to ask the bank to reverse the fee

Ask after you know what the bank decided about the fraud, and ask even if you are still waiting, so the fee does not get old. Use the phone number on the statement. Have the date the account was restricted, the date of the payment that failed, the payee, the payment amount, the fee name, and the fee amount.

You can read this and fill in the blanks. "The account was restricted while you reviewed possible fraud. On [date] a payment to [name] for [amount] did not clear. You charged [fee name] of [amount]. I am asking you to reverse that fee. Please tell me whether the fraud review is finished, and please send the decision in writing if you can." Then stop and let them answer.

No CFPB or FCAC page opened for this guide says a bank must remove an NSF or overdraft fee just because the account was restricted. Asking is a request. The bank can say no. If the fee came from an unauthorized pre-authorized debit, FCAC is more direct: ask the institution to reverse the extra charges, and it gives the NSF fee as the example of a payment that then fails. You usually have 90 calendar days from the date the unauthorized debit left the account to report it and ask for the money back. That 90 day window is about the debit you did not approve. It is not a promise about a bill you did authorize.

If the problem is an electronic transfer you did not allow, CFPB says the bank generally has 10 business days to investigate, or 20 business days if the account has been open less than 30 days. It must correct an error within one business day after it decides an error happened, and it then has 3 business days to report the result. If it cannot finish in those 10 or 20 business days, it generally must give a temporary credit, minus at most $50, unless it asked you to confirm the error in writing and you did not do that within 10 business days. The full review can take 45 days, or 90 days for a foreign transaction, an account open less than 30 days, or a debit card purchase at a store. For a lost or stolen debit card, telling the bank within 2 business days of discovering the loss caps your responsibility at $50. Waiting longer can raise that to $500. You should also tell the bank within 60 days after it sends the statement that shows the unauthorized withdrawal.

In Canada, FCAC says a deposit account dispute is often due within 30 days after the statement date, and that your agreement can set a different time. If the answer on the fee is no, complain to the bank. FCAC says the bank must give a detailed written response within 56 calendar days. FCAC does not decide that complaint and does not pay the fee back. After 56 calendar days, or sooner if the bank already closed the file in writing, you can go to the Ombudsman for Banking Services and Investments. The steps are on how to ask your bank to refund a fee. In the US you can also submit a complaint to the Consumer Financial Protection Bureau. The complaint is a record. It is not a guarantee of a refund.

How to ask the biller

Call or write the company that was supposed to be paid. Give the date the bank returned or blocked the payment, the amount, and that the account was restricted for a fraud review. Ask them to waive the late fee or returned item fee and to accept a new payment date. Keep their answer. They can say no. Cancelling a pre-authorized debit does not cancel the bill. FCAC says you still owe the biller and you need another way to pay.

How to spot the fee on the statement

Look for NSF, NON-SUFFICIENT FUNDS, insufficient funds, returned item, returned payment, overdraft, or OD fee. Those words are explained on what an NSF or insufficient funds fee means. A US overdraft and a Canadian NSF are different schedules. Do not copy one country's number onto the other statement.

Named refund pages, still without a promise, are Chase, Bank of America, Wells Fargo, U.S. Bank, PNC, USAA, TD Canada Trust, RBC, Scotiabank, CIBC, BMO, National Bank, and Desjardins.

The line on your own statement is the one that counts. Upload it on the upload page. The PDF stays on your device. Expenvo lists the lines. It does not sign in to the bank.

Questions

Can the bank charge an NSF or overdraft fee while the account is frozen?: A freeze does not by itself cancel a payment that was already set up. If the payment does not clear, the statement can show a returned item or NSF fee. If the bank pays it and the balance goes negative, it can show an overdraft fee. CFPB says yes, a bank can charge an overdraft fee when it takes back a fraudulent check and the account is overdrawn.
Is there a Canadian cap on that NSF fee?: Yes, for a personal deposit account at a federally regulated bank. FCAC says the rules came into force on 12 March 2026: not more than $10, not more than once in 2 business days on the same account, and no NSF fee when the overdraft is less than $10. Business accounts are not covered. A provincial credit union that is not federally regulated follows its own regulator.
Does confirming the fraud mean the fee comes off?: Not as a rule on the pages opened for this guide. Ask the bank to reverse the fee, with the date and the amount. The bank can say no. If an unauthorized pre-authorized debit caused the NSF fee, FCAC says to ask the institution to reverse those extra charges.
Who waives the biller's late fee?: The biller, if they agree. CFPB says a declined payment may trigger a returned item fee from the merchant. That fee is separate from the bank line. Ask the biller with the date the payment was returned. They can say no.

Sources

Banks

Related guides

Upload a statement free

Free is $0 USD. The PDF stays on your device.