Our bank is considering a new fee for returned mail. I am assuming we would need to notify all of our existing customers of this new fee before we begin charging it, correct? Would this include loan, IRA, Savings, and Deposit account customers?

Thanks for your help!

If the mail is being returned, how are you going to contact the customers who should be the ones impacted the most? Before beginning to charge, I would find out what other methods you have to contact them and ensure that you've got their mailing addresses correct. You might be able to query staff as well; we are in a small enough community that sometimes bank staff will know that the person died, left town, etc.

We looked at this possiblity last year, and backed off, feeling it would be a UDAAP landmine.

Since there woudl be no way to charge the fee on certain accounts (loans, IRAs, etc.), we couldnt' treat all customers consistently. Then, do you charge per-item or per-month, or only once? How much time to you give a customer to correct a faulty address before charging the fee?

These are all questions that we couldn't answer cleanly.

We do make an effort to locate the customer's new address, but sometimes we the bank have been charged for the returned mail and then it takes time to do the research to locate a correct address and sometimes we have to just put a memo on the account stating we need a new address. Management is wanting to charge a fee because of all of this effort involved in returned mail. Another bank in town charges this type of fee. I was just curious if we needed to notify all of our existing customers before we actually start charging the fee. Basically telling customers to notify us of address changes or they could be charged for returned mail.

Thanks

I agree that there are a lot of ambiguities in this! I wish management would stop looking for new fees!

How are you going to assess a new fee on contracts that are closed-end in nature, i.e., closed-end loans, CD's, etc. You can't modify those contracts. There are some things that are just a cost of doing business. If management wants to make more money, then raise their overall prices and quit looking for the nickel and dimes.

Amen! Apparently they must be only thinking of charging this on demand deposits or something because all these questions didn't come up in the meeting. Poor ol' deposit account holders always get charged for things.

Like JacFSB I have no taste for this. In my mind, it's only a little weaker than the dormant account fee; i.e. it relates more to a "fee opportunity" than charging for a customer action or inaction that actually has an effect on the bank.

I've always been big on attempting to locate customers immediately after our communications have been interrupted. If you can produce a laundry list of things you actually do to reestablish contact and they represent a direct expense, then I could be persuaded that a one time fee is justified. If your bank just plans to take a few bucks out of the account just because no one is watching, then, No.

As for checking and savings account customers where you have a legal responsibility to provide periodic statements, from my perspective it's a fee "in connection with the account" and disclosure would be required. I'm uncertain as to how you are inconvenienced when I have a time deposit and I get lost. Same for a loan.

We starting charging a fee because of the time and expense of trying to track down current addresses of customers. We put a warning on an account with the first returned piece of mail. If there is a PO sticker that has a forwarding address, we send a letter informing the customer that we have received returned mail, we enclude a "Change of Address" form for them to complete and a postage paid envelope to return it in. We track all the returned mail on a spreadsheet and when the second statement is returned after we have done this, we charge a fee. We don't charge for notices that are returned. So what we charge really does not offset the time and expense for trying to get the required "statement" to the customer. And we don't overdraw an account with a charge. Just wish people who want a bank account would make sure they give us their correct address. It's really for their protection.