Accounts are considered frozen or dormant when no transactions are carried out for a certain period of time.
After this period, which are determined by the regulator or the institution’s internal policies, the account must be considered frozen or dormant.
Dormancy periods are usually different, depending on the type of account; current accounts, deposit accounts etc.
Risks from dormant accounts are high, due to the possibility of internal fraud, rather than money laundering.
There is the possibility that one of the bank’s employees could be aware of the account, and see an opportunity to take advantage of the dormant account through a fraud scheme.
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