I'm going to try and keep things anonymous and discreet, so please don't ask for specific details as I'd rather not put too much out there.

I recently stumbled upon an out of state credit union offering prepaid VGCs for next to nothing. Reloadable cards with a high balance, at least as far as GCs are concerned. I won't say how many I purchased but it was more than one - not much more than that. The cards can be loaded from any standard C.C. either over the tel. or directly online. I did so numerous times using several cards. Here's where I got sloppy: I called each time and had the balance transferred back to my checking account, thinking the credit union wouldn't care, since I'm not earning any points from them. I gave a different though reasonable (imo) excuse each time. I then transferred the funds out of the credit union to an external checking acct with another bank, and then paid off the cards.

Now I just want to be clear that the I did not make excessive reloads nor carry excessive balances on any of the cards. Apparently, my activity was enough to flag the acct. (fair enough) but it could also have been a reasonable misunderstanding with explanation... were the situation and circumstances different. Before I conjure up an explanation, I want to consult the forum.

Here's the problem - the card was flagged for fraud protection and frozen. The card is carrying a full balance (substantial amount though under 10k). I've received a voice mail indicating that they suspect the GC was used to earn points on rewards cards. They stated that they've reached out to all credit cards involved. I've also just discovered the credit union acct. was shut down or at least it's inaccessible online.

What to do?

If the CU acct is closed out, is the bank not obligated to either release the hold on the prepaid card or return the balance via check? While I understand that there is no obligation on their end to retain me as a member/customer, surely it's not lawful for them to seize my funds when I haven't done anything illegal or fraudulent myself, nor gone against the T&C (technically) of the acct.

How do I get the CU to release the funds from the card? It's not an amount that I'm able to simply write off and I'm very worried.

Thank you and please try to offer helpful advice rather than "proceed at own risk - told you so" type responses, as I'm genuinely concerned and seeing input.

Thanks in advance.


PS - Should I immediately dump all points in associated credit card accts out to travel partners? I've never done any manufactured spend on any of these cards before and always used them VERY responsibly, so I'm doubtful that these accts would also be terminated, but again, I defer to the forum's better judgement.