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#1984201 - 12/18/14 07:46 PM Bank held liable4SS/VA funds deposited after death
MSmith5 Offline
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Joined: Mar 2013
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We are experiencing an increase in treasury/VA deposits after customer death, which are being withdrawn by surviving party. The treasury/VA debits the Bank if funds are not recovered from survivor. Is anyone else experiencing an increase in survivors unwilling to pay funds back, resulting in Bank loss? If so, what do you all have in place to mitigate this?

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#1984218 - 12/18/14 08:16 PM Re: Bank held liable4SS/VA funds deposited after death MSmith5
Doug Hendrickson Offline
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Doug Hendrickson
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I haven't seen such an increase yet. Unfortunately, as you may know, the ACH transactions for VA don't usually come with a SSN, so you don't know whose it is. However, if we get a an ACH DNE from the SSA, I generally return any of the VA or other deposits going into that same account and let them sort it out.
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#1984430 - 12/19/14 05:33 PM Re: Bank held liable4SS/VA funds deposited after death MSmith5
rlcarey Online
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rlcarey
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Galveston, TX
If you are handling the reclamation process correctly, it is not the bank's responsibility to recover the funds or take the loss:

https://secure.ssa.gov/poms.nsf/lnx/0202408610

If you are suffering losses, then no one is completing a FMS-133 on these instances.
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#1984460 - 12/19/14 07:24 PM Re: Bank held liable4SS/VA funds deposited after death MSmith5
JacF Offline

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PA
Also take a look at your processes for responding to notice of a customer's death. It's prudent to review the customer's relationship at that time and protect any funds that are subject to reclamation, as well as take steps to ensure that no subsequent deposits in the decedent's name are posted.

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#1986010 - 01/02/15 04:12 PM Re: Bank held liable4SS/VA funds deposited after death MSmith5
Susielou Offline
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Posts: 342
Midwest
If it is a retirement from the State, would that need to be returned as well?

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#1986109 - 01/02/15 08:16 PM Re: Bank held liable4SS/VA funds deposited after death MSmith5
John Burnett Offline
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John Burnett
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Cape Cod
As a general rule, if a bank has received a notice of death from SSA or other confirmed knowledge of its customer's death from whatever source, any ACH credits arriving after learning of the death that are recurring benefit, retirement or annuity payments in the name of the decedent should be returned.
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#2000241 - 03/06/15 04:08 PM Re: Bank held liable4SS/VA funds deposited after death MSmith5
Valley girl Online
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TX
How would you handle an unverified death? We had a legal firm from another state come in to our main office to tell us that a member had passed away. We have never received and death notice from family, Social Security, VA, and have checked local newspaper, internet, etc. for information but found none. The legal firm has sued the member and had on-going litigation with our member for a couple of years. There have not been any transactions on the account since the legal firm stopped by approximately five weeks ago other than 1 SS deposit and 2 VA deposits.

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#2000445 - 03/07/15 05:20 PM Re: Bank held liable4SS/VA funds deposited after death MSmith5
John Burnett Offline
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John Burnett
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Cape Cod
I have to ask this question, and please don't take it as a challenge of your diligence: Have you attempted to contact the member by mail or telephone?

The notice from the law firm is at minimum a red flag that you must investigate to determine whether the member has passed away. For this, you can certainly start with family, but tread gently, and don't stop there if a family member says the member is still with us. If death records are filed with local city or county government offices, check there. If need be, ask the law firm the source of its information.

If you can confirm that the member has died and can provide a date of death, I'd flag the account and be certain you return any future SS or VA benefit payment for which the member is named as beneficiary. Make a careful record of when you first learned of the death and confirmed it, so that you can argue your case in any reclamation attempt.
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John S. Burnett
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#2001924 - 03/16/15 09:11 PM Re: Bank held liable4SS/VA funds deposited after death John Burnett
Valley girl Online
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TX
There isn't any family contact information available. The law firm told me that they would have "family" provide a copy of the death certificate, but we have not received anything.

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