Banks work with the SSA to prevent fraudulent use of identities, so anybody who has been entered into the Death Master File database has their accounts frozen. Moreover, those people stop receiving government benefits that they may sorely need.
The Funeral Law Blog reports that those who have wrongfully been declared dead are not out of luck, but the process to be "revived" is not an easy one:
There is hope for those 14,000 people the SSA wrongfully declares dead each year. First, they will need to find a copy of their death certificate and have it amended to make them not dead. They then need to take the amended death certificate and a photo ID to their Social Security office. After the SSA declares you revived, you can then go to your bank and work with them to re-open your accounts. While this process will likely take months, it is probably a better option than dying to save time on the paperwork.Hopefully the SSA can solve this problem soon. While only a small percentage of SSA beneficiaries become "undead," the consequences of this designation are extremely inconvenient for those unlucky few.