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#352962 - 04/28/05 09:43 PM
dormant accounts
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Anonymous
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we currently have a procedure that when an account goes dormant, we pull the signature card from the active file and keep it under seperate control. There is discussion on what purpose this serves, since there are other controls in place to safeguard funds in dormant accounts. What are other banks doing when an account goes dormant?
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#352963 - 04/28/05 09:55 PM
Re: dormant accounts
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That is an important control. Dormant accounts are considered vulnerable to fraud due to the fact that the account holder may not be reviewing their statement. If the signature card is not kept under dual control, it would be possible for an employee to access the card, forge a withdrawal authorization, and maybe not be caught when the statement is mailed.
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#352964 - 04/28/05 10:06 PM
Re: dormant accounts
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Anonymous
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I agree. the discussion then brought up the fact that 40-60% of people don't look at their statement anyway and that active accounts are more at risk. With our system a transaction to a dormant accoutn generates a log and it is reviewd by the cashier and audit the next day
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#352966 - 04/29/05 12:45 PM
Re: dormant accounts
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NJ
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We stopped moving the signature cards to a seperate file after we began to use a signature capture software program at account opening. We realized that the tellers were comparing the signatures online at their window vs using the signature cards, which was the whole point of this system. So moving the signature cards made no pratical sense. But, we did begin to be more vigilant in reviewing any activity againist dormant accounts, requiring the teller to get ID and document it on the transaction. For large accounts the teller must call over a supervisor to do additional matches againist the customer's profile (ie DOB, Mother's Maiden Name, SSN, etc).
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#352967 - 04/29/05 01:29 PM
Re: dormant accounts
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Quote:
We stopped moving the signature cards to a seperate file after we began to use a signature capture software program at account opening. We realized that the tellers were comparing the signatures online at their window vs using the signature cards, which was the whole point of this system. So moving the signature cards made no pratical sense. But, we did begin to be more vigilant in reviewing any activity againist dormant accounts, requiring the teller to get ID and document it on the transaction. For large accounts the teller must call over a supervisor to do additional matches againist the customer's profile (ie DOB, Mother's Maiden Name, SSN, etc).
So, basically, anyone in your bank can access a signature card for a dormant account?
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#352968 - 04/29/05 02:21 PM
Re: dormant accounts
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NJ
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The signature cards are still maintained in a locking cabinet behind the teller line. But they are only the hard copies of the information that is contained online and on signature retrieval. So anyone with the proper level of security anywhere in our branch network can see the information that is contained on the signature cards. Here is a situation that occured recently in NJ 9 charged in bank data scheme . This shows that securing information contained on our computer network is becoming as crucial, if not more crucial, then the documents. It's easy to place a dormant signature card in a seperate, secure file but if the information readily available elsewhere what are we really accomplishing? We've created a false sense of security if we have not also protected the the information on our computer network.
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#352969 - 04/29/05 03:42 PM
Re: dormant accounts
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Quote:
We've created a false sense of security if we have not also protected the the information on our computer network.
Oh, I agree entirely. I think that both should be secured. But your bank, from my understanding, allows the information to be access electronically by anyone. Isn't that a control weakness?
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#352970 - 04/29/05 04:16 PM
Re: dormant accounts
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NJ
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Anyone, with the proper security level can access accounts. ie tellers, CSRs, Branch Manangement, Back Office Staff, Compliance Staff, etc. Access to account information based on their position and responsabilities.
If we secure the signature card what does that do to secure the information. The infomration is what is important and it resides in bits and bytes on the host system, back up tapes, etc (we even have signature cards that are stored on micro fiche.) The information needs to be secure in whatever form it is stored in. What does securing dormant account signature cards elsewhere in the bank accomplish if the everything is online and that is now the main access point. When I was a teller we would go to the signature file to compare signatures on the withdrawal. Now my staff just clicks an icon and the signature appears in front of them. Most days the signature card file remains locked the entire day because no one needs to access it anymore except to pull closed accounts and file new signature cards.
In the past we would secure dormant account signatures into the vault, to prevent someone in the bank from retrieving the information that they contained and using it for unscrupulous purposes. Now they can access the same information from their desktop. So we monitor, in addition to transcations, any other access of dormant account records.
Last edited by mountainmannj; 04/29/05 04:22 PM.
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#352971 - 04/29/05 04:41 PM
Re: dormant accounts
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Joined: Nov 2001
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At a former bank, we had dormant signature cards locked away but no other controls in place. A bookkeeper wiped out a dormant account to the tune of $40,000 because she was the one who reviewed the dormant account report and could change the status to allow transactions if the account wasn't truely dormant. In that state, if the customer had other active accounts then 1 account that was inactive wouldn't be considered dormant. She also ran proof part-time and it was easy just to transfer the funds to her account in proof. We caught her only because she ran the overages from other active customer's deposits as a deposit to her personal checking account. It didn't take us too long to place that function under dual control.
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#352972 - 04/29/05 05:33 PM
Re: dormant accounts
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Quote:
So we monitor, in addition to transcations, any other access of dormant account records.
Well, that is a mitigating control. If it were my bank, however, I would still recommend that access to both the physical cards and the electronic records of same be controlled.
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#352973 - 04/29/05 05:42 PM
Re: dormant accounts
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Gold Star
Joined: May 2004
Posts: 458
Smack dab in the middle of IL
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Quote:
At a former bank, we had dormant signature cards locked away but no other controls in place. A bookkeeper wiped out a dormant account to the tune of $40,000 because she was the one who reviewed the dormant account report and could change the status to allow transactions if the account wasn't truely dormant. In that state, if the customer had other active accounts then 1 account that was inactive wouldn't be considered dormant. She also ran proof part-time and it was easy just to transfer the funds to her account in proof. We caught her only because she ran the overages from other active customer's deposits as a deposit to her personal checking account. It didn't take us too long to place that function under dual control.
I, as compliance officer, review the dormant account monthly. I do not have the ability to change a dormant status. And a dormant status can only be removed under dual control. So actually there are at least 3 people involved in removing and monitoring dormant accounts.
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#352974 - 04/29/05 09:07 PM
Re: dormant accounts
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Joined: Aug 2001
Posts: 1,033
Marysville, Ca.
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How do you protect the signature from being updated when you store them on line. I am sure customers come in to change or add a signer later. What protections do you have in place to mitigate risk in that area?
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#352975 - 04/29/05 10:13 PM
Re: dormant accounts
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Anonymous
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Our system requires a proprietary software that is only available to handful of people.
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#352976 - 05/02/05 04:51 PM
Re: dormant accounts
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Diamond Poster
Joined: Jun 2002
Posts: 1,044
The banana bin
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It didn't take us too long to place that function under dual control.>>>
And I think this is the way to go. Think about it, anyone can get a signature if you really wanted to. Find when the last transaction occurred, get a copy of the transaction, and there ya go. Anyone with any type of research capability could do it. And anyone could request research on it as well. So, basically, anyone in the bank, theoretically could get access to it. You don't need the physical item.
There's always a way around it.
But dual control...that's harder to circumvent. Is it foolproof? Nope. But it makes it harder.
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#352977 - 05/02/05 05:07 PM
Re: dormant accounts
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Find when the last transaction occurred, get a copy of the transaction, and there ya go. Anyone with any type of research capability could do it.
A lot of banks place these accounts under restricted inquiry access. So that not just anyone can access the activity.
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#352978 - 05/02/05 06:26 PM
Re: dormant accounts
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Posts: 1,044
The banana bin
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A lot of banks place these accounts under restricted inquiry access. So that not just anyone can access the activity.>>>
So, then you're removing any applications of credit card, auto transfer, direct deposit, PMR, Corp Resolution (if business), CIP sheets, etc.? That's a lot of moving paper documents to hide a signature that, let's face it, isn't all that important in today's day and age.
For example, I can order checks off of an account that I know is dormant (how I know is an entirely different argument). And I can write a check for let's say to my credit card. See, I know that a store down the street that uses POP. Now, if you didn't have proper controls on the backend with nonpost or some type of monitoring...where's the signature? What was the point of the signature?
In my opinion, it's the backend controls of monitoring that is the most important. It hits the non-post where it has to be approved by two people before posting. Contacting the customer is crucial. No approval or logical reason for the transaction? Return it. I mean, even if I had a check with a signature, shouldn't you go through those same steps of verification anyway? Don't signatures change over time or if you're in a hurry?
(Granted, every bank is different and I'm speaking with mine in mind.)
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#352979 - 05/02/05 06:43 PM
Re: dormant accounts
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Oh, I have no disagreement with moving dormant accounts to a status where the transactions non-post, and I think requiring dual approval for those transactions is a good control, I'm just saying that it is possible to restrict access to account information, too.
How are you going to determine whether there was a logical reason for a transaction coming in through the cash letter?
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#352980 - 05/02/05 06:54 PM
Re: dormant accounts
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Joined: Jun 2002
Posts: 1,044
The banana bin
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How do you determine it either way? For example, you have an elderly customer and their account is dormant. Usually, we'll call them to make sure that they're alright but we'll also use it as verification. But say you can't get a hold of them. Where is the check to? Grocery store and they got cash back? That's a red flag. Check to a pharmacy or to a doctor or to a number of places that an elderly customer would write one too? You kind of have to use common sense.
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#352981 - 05/02/05 08:16 PM
Re: dormant accounts
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Grocery store and they got cash back? That's a red flag.
Does the store note that the customer received back cash on the check?
My thought is, you do the best you can to verify the signature.
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#352982 - 05/02/05 08:44 PM
Re: dormant accounts
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Posts: 1,044
The banana bin
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<
My thought is, you do the best you can to verify the signature. >>
Most grocery stores around here notate it as part of their endorsement.
And you're right, check the signature but it can't be the end all-be all. So, how practical is it that you're going into a locked and secure cabinet that is possbily in an entire different part of the bank everyday to review a signature that is possibly years old?
Again, in my opinion, if you have all of the other controls in place, you really don't need to secure a dormant signature card. But that's just me.
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My opinions are definately my own. I could be wrong. But I don't think so.
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