So My Bank Account Was Closed, Now What?

September 5, 2022 | By Jessica Goedtel, CFP®

Wells Fargo notified several sex workers this week their bank accounts would be closed. No definitive reason was given by the company. It’s likely accounts were marked for closure by transactions from legal online sex work platforms.

Is this even legal? Unfortunately, yes. Read the agreement for your account carefully – most banks have the ability to shut down your account without notice. They still have to return your money, although you still may be subject to overdraft or closure fees.

What do I do if I was notified of the closure? In the case of the Wells Fargo closures, you should have been given several weeks to transition your bank account. Don’t sit on this – you’ll need time to get everything transferred.

First, download any available statements at your bank. Print off your balance and recent transactions, including pending transactions. Confirm your address on file is correct (in case they need to mail any remaining funds or tax forms).

Create a list of the following, making a note of dates due:

  • Autopayments set up with your bank.
  • Autopayments set up with the bill holder.
  • Other bills you’ve paid that were not set up for autopayment.
  • Places you receive money from directly (OnlyFans, CashApp, etc.).

Cancel any autopayments, both those set up directly at the bank and those set up elsewhere. If you’ve sent any payments from your account or written any checks that haven’t been cashed, reach out to the recipients to arrange alternate payment.

Next, pull your ChexSystems disclosure report. This report is shared between banks to disclose issues on checking and savings account holders, similar to your credit report. If there is anything listed that is incorrect, you can file a dispute. It’s important to check this report as flagged issues may make it more difficult to open another bank account.

If nothing is listed on your ChexSystems report, research new banks for a checking account. So far these types of account closures have been mostly with large institutions (Wells Fargo, Chase). You may want to avoid using one of the top ten banks in case these closures continue. Read any agreements carefully before signing up, noting what types of transactions are prohibited and under what circumstances they can close your account.

Once your new account is opened, transfer your funds over. Using your list, update your bank information where needed and restart any autopayments. Keep this list handy over the next 12 months, there are still likely to be bills and accounts you missed.

What can I do to prevent this in the future? If you have a Wells Fargo account that hasn’t been closed, switch it now before it becomes an issue. It’s possible that these closures will continue to roll in, despite the media coverage. Other large commercial banks may also follow suit. Choose a credit union or a reputable online-only bank. These types of banks aren’t necessarily friendly to sex work, but may not be as interested in closing accounts compared to larger banks.

Keep your business and personal accounts separate so there is less to move if an account is closed. You should do this for tax purposes as well. The IRS expects separate accounts for business banking and credit.

Have a backup checking account ready. Keep this account separate from your sex work (i.e., do not transfer any earnings from sites directly to this account). You’ll need to have some activity in order to keep the account open, so consider setting up small, automated deposits.

Keep only what you need to pay bills and a little extra in your checking. Move the rest to a savings account that is at a different bank than your checking. Use a high-yield savings account to earn a little extra cash as well.

I won’t beat around the bush – this sucks and is likely to keep happening unless we have broad changes as a society. Until then, take what steps you can to protect your earnings and be prepared if it happens again.

*Pavilion Financial Planning has no affiliation with any of these institutions and receives no compensation from them.

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