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#1414202 - 07/13/10 01:51 PM "Inactive" vs. "Dormant"
Jenn-Lynn Offline
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Joined: Aug 2006
Posts: 95
Oklahoma
Is there a technical difference between the term "inactive account" versus a "dormant account"? I'm not talking about escheatment time frames, just wondering if there is an actual difference or if it's just one word over the other.

If a customer has not had a debit or credit in one year what would be the proper term? Inactive or dormant. We still have working addresses for the customers so we have not lost contact.

I appreciate your help.

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#1414809 - 07/14/10 03:50 PM Re: "Inactive" vs. "Dormant" Jenn-Lynn
el guapo Offline
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"inactive" and "dormant" are not defined in any legislation that I know of. It's really up to each financial institution to define those terms for themselves, while making sure that they follow each state's escheat laws. Our institution chooses to identify an account as inactive at one year of inactivity or documented contact with the client(s) and dormant after 2 years. This is because most of our clients are in California and the legislation requires an escheat notice to be sent after 2 years of inactivity, so it's a convenient landmark to use.

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#1415183 - 07/15/10 10:25 AM Re: "Inactive" vs. "Dormant" Jenn-Lynn
Elwood P. Dowd Offline
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As you have distinguished between "abandoned" property as defined by state law, whether you call an account "inactive" or "dormant" is a bank to bank decision. Neither term has a specific definition under federal law; there is no universal time frame where the lack of customer intitiated activity would indicate such a label is appropriate.

In my opinion, "dormant" would be more readily understood by customers and employees.
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#1417139 - 07/19/10 11:02 PM Re: "Inactive" vs. "Dormant" el guapo
JoAnne Offline
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Joined: Feb 2001
Posts: 795
Michigan
Originally Posted By: el guapo
"documented contact with the client(s)"


What do you consider documented contact with the client(s? Would a phone call initiated by the bank count as contact?
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#1417162 - 07/20/10 01:01 AM Re: "Inactive" vs. "Dormant" JoAnne
rlcarey Online
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Galveston, TX
You will have to check with State law to determine what constitutes contact.
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#1417415 - 07/20/10 04:59 PM Re: "Inactive" vs. "Dormant" rlcarey
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