Some financial institutions began calling customers directly, while demanding financial records from both the Y2K companies and their owners. They indicated fraud. Lumen Foods contends it has maintained a spotless merchant account with its bank since 1987. As Y2K-related sales skyrocket, merchants are being accused of fraud and denied payment from banks. In most cases, the banks refuse to pay interest on the seized money, even if that money is later released.
Banks claim to be just following procedure.
We have to hold these accounts for review to verify the sales are real. In any other industry, Adams adds, increased sales are seen as an indicator of strength and profitability. But Y2K companies are looked at with suspicion. When banks seize funds from credit card merchants, they sometimes take 30 days or more to verify the sales were legitimate. During this time these potentially interest-bearing funds are held by the bank, but no interest is offered to the merchant.