Consumer complaint received 2021-02-25
Product: Checking or savings account — Checking account
Issue: Closing an account — Company closed your account
Company: CAPITAL ONE FINANCIAL CORPORATION (TX)

RE : Capitol One Bank. Customer Protection Department. Case ID XXXX XXXX XXXX XXXX On XX/XX/XXXX, we contacted the Customer Protection Department after learning our business checking account and Lines of credit had been frozen. XXXX, customer rep advised that the account was suspended due to an investigation of an electronic deposit by the U. S Small Business Administration. We advised that this was one of two Economic Injury Disaster Loan disbursements for our business, XXXX XXXX XXXX. We offered to provide immediate verification of the loans. XXXX stated there was nothing we could do and we could not speak with the investigator. We were told we would be contacted within 15 business days. 
On XX/XX/XXXX, Capitol One froze all of our personal accounts in addition to the business account. We contacted the customer protection department again. XXXX, a rep, advised that the investigation determined the electronic deposits were fraudulent and that our accounts would be closed. All debts would be due immediately. All funds in our accounts would be seized as bank property. Although the investigation was open the decision had been made to return the loan amounts in question to the SBA. We were told we could not speak to a supervisor. XXXX said we could not speak to an investigator. We could not provide any documentation. On this date, we receive one email that Capitol One was suspending the use of our daughters bank account and we would be contacted for more information. 
On XX/XX/XXXX, we contacted the SBA loan agent assigned to our case. She verified that there was no investigation for fraud or inquiry from Capitol One regarding our loan. 
On XX/XX/XXXX, we again contacted Capitol Ones customer protection department. After briefly speaking to a rep, we requested to speak with a supervisor, XXXX. At that time, the supervisor finally confirmed what was being investigated. The bank questioned three separate electronic deposits from the Small Business Administration : XXXX, XXXX on XX/XX/XXXX ; XXXX on XXXX XXXX, and XXXX, XXXX on XX/XX/XXXX. These were installments on the Economic Injury Disaster Loans from the SBA. We confirmed that these were valid deposits. XXXX confirmed that there was no concern in how the funds were used. XXXX stated that the bank determined that we did not have a business after an inquiry to the Secretary of State. The bank was in the process of closing our accounts and returning the money to the SBA. We asked what documentation we could submit to prove this was an error. She then stated that we could appeal the decision by providing a XXXX tax return and any other supporting documentation to verify our business. She stated that if this decision was overturned that this would not be reported to any agencies and any fees that were incurred would be returned to us. She stated that we would have to wait 2 business days for the documents to be attached to our case ID and it was unknown when the investigation would be reviewed. On XX/XX/XXXX, we emailed to XXXX a copy of our XXXX XXXX and Schedule C for XXXX XXXX XXXX  and copies of the loan application and letters from the SBA confirming the electronic deposits for the dates in question. 
We are an established sole proprietorship and have been in business since XXXX. We have tax returns and filings with the Secretary of State in Texas. We were financially devastated by the COVID pandemic and the EIDL assistance provided working capitol to keep our business afloat during a difficult time. We have banked with Capitol One for business and personal checking for years. We received no notice of an inquiry regarding the deposits. No request for documentation. No notice that our accounts were being frozen or closed. We have not had access to our funds for business or personal use since XX/XX/XXXX. Our home sustained damage during the Texas winter storm. We do not have funds available to fix the damage. We can not access money for food or gas. Our business reputation has been damaged by returned checks to our suppliers for business needs. We will not have access to my paycheck on XX/XX/XXXX and all our automatic debits for utilities and our house payment will bounce. This is financially devastating all because a bank decided to accuse us of fraud without proof and without a proper investigation. 
We discovered in our research of how to resolve this issue that other small business owners and sole proprietors have been in the same situation with their accounts and assets frozen for investigations into their PPP and EIDL loan payments. This should not happen to already struggling small business owners. We understand that fraud does happen but there should be some regulation to the process. Capitol One did not back this loan. These funds came directly from the SBA. The SBA should be the one to investigate concerns of fraud if there were any concerns. In this case, the SBA verified through our tax returns and bank documents that we were an operating business in need. Capitol One has overstepped and erroneously accused us of fraud while implementing penalties and severe actions without cause. This complaint could have easily been resolved prior to XXXXXX/XX/XXXX if Capitol One had only asked us for the documentation they needed to verify our legitimate business.