A temporary hold on a customer’s account must be justified under which conditions?

A temporary hold on a customer’s account is primarily justified when there is suspicion of fraud. This action is crucial in protecting both the customer and the financial institution from potential losses. When there are unusual patterns of activity or discrepancies that suggest fraudulent behavior, placing a hold allows the firm to investigate the situation thoroughly before any further transactions occur. This precaution helps prevent unauthorized access to the customer's funds and is typically in line with regulatory requirements to ensure customer security and trust.

The other situations, such as a low account balance, a customer request, or difficulties in contacting the customer, do not provide the necessary basis for imposing a hold. While those circumstances may warrant additional attention or discussion with the customer, they do not inherently indicate a risk that justifies a proactive measure like a temporary hold. Thus, the soundest reason for applying a hold is the need to mitigate risks associated with potential fraud.