Does anyone have certain policies and procedures they follow when a dormant/inactive account is re-activated? Our auditors asked questions such as, "what are the special procedures tellers follow when taking transactions on dormant and inactive accounts." We dont have any. And also, should dormant account transactions be looked at seperatley when they go thorugh the system? Our bank looks at closing withdrawal slips but that is it. I think the auditors are implying that all transactions that go through dormant accounts should be looked at. Any thoughts?? Thanks

At a bank I worked for recently- all dormant/inactive sig cards where located in a restricted file- so that it made tellers verify ID prior to transacting business with a customer. Some systems will allow you to place an overide on the transaction- so that a head teller will have to verify that the teller followed proper procedures to take the account out of dormancy. You must take special steps to verify a customer who shows up after having an account dormant for a period of time. Once the ID of the customer was verified, we moved the sig card out of the restricted file, back into active. Same thing when we went to imaged sig cards-

We require that the transaction ticket be initialed by the teller, and a 2nd party [preferably head teller or branch manager], along with a notation of the ID used to identify the customer [typically driver's license #] and the name of the customer to whom the ID belongs [for multiple ownership accounts]. This ticket, once completed with the required notations, is copied and kept with the status report which shows the change from "Dormant."

Here are my thoughts. We have two ways that accounts are activated from dormant status. 1. The customer comes and transacts in the account and the authorization is the deposit or withdrawal slip. 2. We have the customer sign a reactivation form stating that they are aware that the account is here, customer signs the form and we bump the date of last contact to the current day.
As far as watching all activity in dormant accounts, if there is activity in the account, it wouldn't be dormant anymore. Our system is set up to non-post if a transaction goes through on a dormant account and we make sure that the procedures were properly followed and then it is posted to the system the next day. The reactiviation form is what we keep on file along with a deposit or withdrawal slip if it was reactivated by a transaction.
I hope that this helps.

I apologize for leaving that out. Yes, our procedures include incoming check items also. If they write a check out of the account and it clears, then that would also reactive the account.

At a recent bank I worked for the CIF system actually allowed us to restrict total access to the account unless your user ID was profiled to view dormant accounts. Therefore, no one except management could view the account. The rest of our procedures were the same as mrenderman's.

Anon, Dormant accounts are highly susceptible to internal fraud because an unauthorized transaction by an employee (or anyone for that matter) could go unnoticed for quite some time.

Several (many) years ago, a loan secretary at my previous previous, previous bank was withdrawing money from a dormant account to fund her Bingo habit. At first she would redeposit the funds after she won, but when she lost.......well, there were no funds to redeposit!

Thus the need for extra precaution on dormant account transactions.

We place a "reject all" code on the system, so each transaction can be verified. Tellers are also required to send a copy of the transaction, sig card, and customer ID to the audit dept.

Amen to that.

Check with state laws as well. You may find guidance there on what your responsibilities are when processing transactions on a dormant account.

I'm delighted to see a thread that is concerned about dormant accounts as a source of risk to the bank and the customer rather than a fee opportunity.

At our bank we even have an alert on the account placed into "dormant" status. We do restrict activity to the account as all debit transaction unpost and the status is changed to post the transaction after checking on the transaction and signature card. Only certain employee access levels may maintance those accounts. The dormant accounts are always scrutinized by the auditors and examiners so we keep a very close watch on those accounts. Internal fraud is a very high risk on those accounts as long as I have been in banking.