How do you have your dormant accounts set up with regard to allowing access to information on the online banking side? To me, it would be better to simply have the customer notify the bank that they would like for the dormant account to be activated and then they would be able to view/perform transactions online, but if they are done online, I don't think our system would make the transaction reject for the usual internal control review. If not, we would have to set the account as active just to let the customer have access and I am not comfortable with this by itself.

If they were trying to transact over the internet, they would get an error message and would have to contact the bank to get is reinstated.

One point - since the customer must use a PIN to access their account online, wouldn't that be a form of identification? So you have identified him/her, and they have expressed interest in the account, or done a transaction.
A bit weak on the ID side, but....

Yeah but I think I would want more, since you have no signature/ID to check back to and anyone can get a pin #, depending on how you have your online banking systems set up. I still like the idea of just not having them available online at all until the customer contacts us to notify us they want the account activated and then we can do verification processes then. Good point, though.