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#1785422 - 02/12/13 11:47 PM Undeliverable Mail & Return Mail Fees
LAK Offline
Junior Member
Joined: Oct 2012
Posts: 43
I have worked for various banks, none of which charge a fee for mail which is undeliverable or for return mail. Can anyone shed some light on this within you institution. I have concerns, beginning with UDAP. We would need to controls in place to monitor, ensure that fees are not being waived, prove this is a customer issue and what would be considered "reasonable". The banks should have procedures in place for change of address, contact the customer when possible if mail continues to be returned etc. I don't feel this is a reasonable fee to charge our customers. I would greatly appreciate your feed back.

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#1786583 - 02/15/13 03:02 PM Re: Undeliverable Mail & Return Mail Fees LAK
Laura S Offline
Junior Member
Joined: Nov 2012
Posts: 32
Chicago suburb
We do not charge a fee. When we get return mail, we check to see if there are other accounts for this person with a different address, or see if their checks have a different address on them, if so we mail a letter to that address with a change of address form. Once we get return mail, we try mailing a second time in case heaven forbid, the post office made a mistake, but if it comes back a second time, we change the address to Bad Address, hold at bank, and put a hold mail status on the account, this way you aren't paying for postage. With imaging, we don't even keep the paper statements anymore, because if and when the customer ever lets us know their new address, we can print their statements off for them. And we do not charge a fee for this.

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#1786657 - 02/15/13 04:06 PM Re: Undeliverable Mail & Return Mail Fees LAK
Noah Wiseman Offline
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Posts: 182
My Bank does not but I have an account at a Bank that does. It was fully disclosed when they started to do this. I had not problem with it because there truly are costs involved in returned mail, as Laura Spearman shows regarding postage and research time.

My problem started with the fee because I moved and did provide them with my change of address but the Bank did not change it. I got hit with the fee which dropped my balance below the minimum so additional fees came. As this account is one that I barely and rarely use and I had other things going on with getting settled in to my new home, I didnt notice that I wasnt getting statements. A few months later when I finally realize I got hit with these charges, I contacted them and told them that I submitted a change of address. I was given the run around that I would be provided back the charges but never truly was because th eBranch I called isnt the branch my account was opened at and that branch didnt want it to effect there bottom line. So it took a couple months and a complaint to their regulator to get the fees reimbursed.

Sorry, I am not helping much with your actual post but I am trying to show the problems that can come of the fee especially when an error occurs and a change of address is not properly processed.

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#1787029 - 02/16/13 03:02 PM Re: Undeliverable Mail & Return Mail Fees LAK
rlcarey Offline
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Galveston, TX
A returned mail fee?? The first statement gets returned, you stop sending the statements - it saves you money. How is this fee justified?
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#1787038 - 02/16/13 05:13 PM Re: Undeliverable Mail & Return Mail Fees LAK
Elwood P. Dowd Offline
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Next to Harvey
You didn't return it; the post office did. The description is inaccurate at best.

It could be a factor in declaring an account as dormant and banks already charge hefty, generally unjustified fees for that. Don't pile on fees for symptoms of things you already charge fees for.
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#1787253 - 02/19/13 05:10 PM Re: Undeliverable Mail & Return Mail Fees LAK
LAK Offline
Junior Member
Joined: Oct 2012
Posts: 43
Thank you everyone! You all did help. In our lovely compliance environment any support to why we think the way we do is priceless! Have a great day and again...thanks!

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#1932765 - 06/16/14 02:18 PM Re: Undeliverable Mail & Return Mail Fees LAK
Kathryn0905 Offline
New Poster
Joined: Jun 2014
Posts: 2
I know this is an older post but I had a question regarding the banks that shred the mail after they receive it. Do you track it? Maybe a log that says each piece of mail that comes back for each customer?

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#1932828 - 06/16/14 04:20 PM Re: Undeliverable Mail & Return Mail Fees LAK
osucpa Offline
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Joined: May 2011
Posts: 1,406
The simple answer is some do and some dont. It is helpful to have a log, if you are trying to determine why the address was changed on the core system.

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#1933167 - 06/17/14 03:50 PM Re: Undeliverable Mail & Return Mail Fees osucpa
Kathryn0905 Offline
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Joined: Jun 2014
Posts: 2
Thanks for your help.

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#1939987 - 07/11/14 06:32 PM Re: Undeliverable Mail & Return Mail Fees LAK
acquiescent Offline
Member
acquiescent
Joined: Apr 2014
Posts: 53
Chicago, IL
I have a great piggy back on this discussion...

It has come to my attention my deposit operations area charges a $5 reoccurring monthly fee for customers with returned mail. In learning this I have also learned that when the customer corrects their address this fee continues to post to the account. In some instances this has occurred for years. The business line is justifying the error by indicating customers are responsible for reviewing their statements so we shouldn't have to do a full look back to credit those affected. They are also pushing this because of the time it will take to perform the research to remedy.

My thought process is one of two. First is the greater of evils, we do a residual risk assessment of the population and use the statement justification malarckey to validate why we are not refunding. The second, and more customer-friendly approach, is to identify the population and offer a predetermined refund for the full value of the error or a predetermined threshold for refunds (say three months) that we will credit to the customer along with a statement stuffer explaining the error. Gurus, what do you think?
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#1940042 - 07/11/14 07:07 PM Re: Undeliverable Mail & Return Mail Fees LAK
BrianC Online
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BrianC
Joined: Nov 2004
Posts: 6,693
Illinois
Since you are charging a fee for a "service" that you are not providing, I don't see an examiner buying the statement justification.

Recent UDAAP citations have resulted in lengthy lookbacks, Civil Money Penalties and customer restitution orders. The path of least risk to the institution is to take the time identify the fees that were charged in error and refund them. This process should include reviewing accounts that are closed and mailing checks for fees incorrectly charged on those accounts.

It will be cheaper to do it now that you have caught it yourself, than to have your examiner order you to do it and fine you for not providing the refunds in the first place.
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#1940059 - 07/11/14 07:14 PM Re: Undeliverable Mail & Return Mail Fees LAK
John Burnett Offline
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Cape Cod
I'll totally agree with Brian and simply add that if you don't do a thorough job of it and your regulator makes you do a complete lookback and reimbursement, you will have complicated the job by having already refunded some of the fees but not all.

Two additional thoughts:
  • Is that fee properly disclosed in the first place?
  • Has the bank now added a procedural step that at minimum turns off the flag that triggers the fee when a customer supplies a new address?
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#1940164 - 07/11/14 08:28 PM Re: Undeliverable Mail & Return Mail Fees LAK
acquiescent Offline
Member
acquiescent
Joined: Apr 2014
Posts: 53
Chicago, IL
I am in full agreement, if I were an examiner I wouldn't either.

We do disclose a return mail fee as we have a PO Box and have to pay a support person to check that mail. The issue is that sometimes we get return mail for accurate addresses.
Is charging a fee, even if properly disclosed, considered UDAP/UDAAP?

We just identified the risk today John so we're in the preliminary stages of resolution. I have asked the department to provide a full scope report of all fees collected from the time of exposure to now. From there I'm asking them to do a dive into the errors and determine what value of the total population that may be. Once we have the data I plan to present the risk of not fixing it (including CMPs and research hours) to the cost of doing what's right for the customer (refunding fees where inappropriately charged).
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#1940270 - 07/12/14 01:42 PM Re: Undeliverable Mail & Return Mail Fees LAK
Kathleen O. Blanchard Offline

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One comment re continuing to charge the fee after a good address has been provided - saying it is up to the customer to review their statement and notify the bank is saying that "we will continue to rip customers off until they individually bring it to our attention". That is an outrageous statement; does the bank really want to make that belief public? It is dishonest and will never be considered acceptable.
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#1940413 - 07/14/14 04:10 PM Re: Undeliverable Mail & Return Mail Fees LAK
acquiescent Offline
Member
acquiescent
Joined: Apr 2014
Posts: 53
Chicago, IL
It is a very rare occurrence that the fee is being imposed in situations where the address is accurate. In those instances where the charge is inaccurate, the business is crediting the fees back as the error is uncovered. Their comment was in regards to the depth of the look-back required. I told them they would need to determine the full population of customers impacted and need to perform due diligence to determine where USPS is indicating an incorrect address, despite the address provided being accurate.
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#2268570 - 04/01/22 04:34 PM Re: Undeliverable Mail & Return Mail Fees LAK
Anonymous Offline
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Posts: 187
I know this is an old post but wondering if anyone has any updated guidance on this? We are looking at implementing a returned mail fee and I see a lot of possible issues and a lot of monitoring in our future.

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#2268574 - 04/01/22 05:31 PM Re: Undeliverable Mail & Return Mail Fees LAK
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
With the CFPB going crazy on "junk fees" you are contemplating instituting a new fee?
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#2268578 - 04/01/22 05:55 PM Re: Undeliverable Mail & Return Mail Fees LAK
Anonymous Offline
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Joined: Jun 2021
Posts: 187
Oh I am with you on this one but yes the bank is looking at adding this.

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#2268593 - 04/01/22 06:39 PM Re: Undeliverable Mail & Return Mail Fees LAK
HappyGilmore Offline
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Joined: Jun 2004
Posts: 19,844
Pulling people out of the ditc...
i think you are looking to create nothing but problems if you do this. if you receive return mail, do you change the client account to "do not mail" for all future? we have moved down this path, you won't be criticized by an examiner for this, but if we were to charge a fee, no doubt criticism would be forthcoming...or worse

however, if the bank is serious, i would have a conversation with my regulatory examiner first, and seek their sage advice and guidance before doing anything else
Last edited by HappyGilmore; 04/01/22 06:40 PM.
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#2268599 - 04/01/22 07:14 PM Re: Undeliverable Mail & Return Mail Fees LAK
Anonymous Offline
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Joined: Jun 2021
Posts: 187
I did reach out to our examiner. Thanks for the input. I appreciate the guidance.

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#2278704 - 12/12/22 07:44 PM Re: Undeliverable Mail & Return Mail Fees Anonymous
Kallie Offline
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Joined: Dec 2022
Posts: 2
Are you willing to share the examiner feedback?

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