I have a question. I am curently reviewing dormant accounts and we segregate dormant account contracts from "active" contracts. Does your bank do this? Why? What are the dangers in keeping the contract with the actives?

The idea is that since the depositor is not receiving a statement on a dormant account, the bank should place the signature card under tighter controls to prevent a rogue employee from forging the signature and presenting a fraudulent item. This fraud would be easier to conceal since the depositor is not receiving the statement.

When an account comes dormant, we put it under dual control in a safe deposit box, when a customer wants a withdraw, we pull the card to verify signatures before we release any funds. The withdrawal has to be signed by the teller and an officer. The account however is not taken off dormant until the next day. It will show up as a reject, but this way it enables the bookkeeping dept to know what accounts are related to dormant. SInce the dormant account and the # of accounts that are dormant are checked each day, this enables us to know exactly when any transaction is done. The account is then taken off dormant and the signature card is added to the active ones. The same applies if a deposit is made, however on deposits the officer/teller isn't required to sign. At the first of each month we get a report showing all dormant accnts plus any new. Those are pulled and go to s/keep.
The way we have done provide us not only a day to day check, but also able to make sure the other branches, have their system in place.

Additionally, internal fraud is also easier to conceal with dormant accounts so you would want to make sure your software has the capability of "restricting" use of those accounts from most employees. Also, check your state's laws regarding escheatment and dormacy, there maybe some addtional guidance there.

If your signature cards are imaged, how do you control access to the imaged card when the account becomes dormant? And, how does your system work when a transaction is presented and the card needs to be available to verify the signature?

Unfortunately, we don't have imaging right now. Your imaging system may have an archive function that would allow you to limit viewing of those dormant cards to a few appropriate employees. As for the system, it flags the account and doesn't allow employees to view the balance or any information about the account other than the account number. If by chance the employee takes the transaction without looking at the system (we are not on-line for processing so this occures from time to time), the proof process will 'reject' the transaction and it is reviewed by the appropriate personnel. If we see it at the front line, however, we will have the customer sign a form and record their ID to make sure they are really the customer conducting the transaction. Hope this helps.

RE: Anonymous response to "Jokerman"...Just a thought...but since problems can arise from "split" deposits, maybe you might want to have 2 people sign off on deposits as well [with the concept in mind that they are actually giving attention to the information about the transaction and not just "blindly" initialling a ticket].
Maybe that's not as likely a source of long-term fraud, but those who are determined can get quite creative, and perhaps be able to circumvent for awhile any notices that might come back to a depositor when a check in a split deposit is returned...in any case, just a thought...