Are any of your banks still reading the obituaries daily looking for deceased customers? The question has come up here at my bank and I just wondered if other banks are still doing this.

Also are you a big regional bank or a small community bank?

We do not. We are a small community bank. The reason we don't is 1) we don't have extra time- we are using our resources on BSA/AML 2)the newspaper isn't a "legal" source to verify a death.
I've worked for different institutions from <100m to BIG bank (WF) and never viewed the obituaries on behalf of the business.

We do, and everywhere I have worked before did also.

We still do. We have 11 branches, we're not "small" but not huge either. When I started as a teller years ago this was one of my jobs, I always thought it was so morbid. Especially when we "found one."

For those of you that do this practice, be aware that it has been used against banks when things go wrong and this is not the only case law:

On motion for summary judgment, the trial court held that there was a fact question as to whether the bank's employees customarily reviewed the obituaries in the local newspaper, and as to the effect of such a custom. The trial court ultimately ruled in favor of Schock:

After a bench trial, where it was established that the bank did indeed have such a procedure , the district court concluded as to the contract claim that the bank should have known that Miller died because his obituary was published in a local newspaper. That the bank had notice of Miller's death, the court concluded, extinguished Nero's apparent authority, and the bank therefore was not entitled to invoke R.I. Gen. Laws § 18-4-16 as a defense to liability for breach of contract.

Schock v. United States, 254 F.3d 1, 4 (1st Cir. 2001).

What does that mean in plain English?

When a bank's procedures include reviewing obitutaries and an obituary was actually published the bank is deemed to have notice of the death regardless of whether it saw that particular obituary. A practice of reading obituaries may increase your liability.

Is this the time for me to bring up the client bank who calls all four local funeral homes every morning to see who died last night? (No point in waiting on the newspaper.)

It means that the bank had a standing procedure in place to check obituaries and they missed one or did not take appropriate action and the bank was held liable for the losses that occurred on the account.

Also from the case original case:

"Schock also offered evidence that the bank had actual notice when it permitted the Nero savings account withdrawal that Miller had died. Schock's new evidence included a bank employee's statement that the bank had in place a procedure for checking the obituaries in the local paper to see whether bank clients had died, and that an obituary for Miller appeared in that paper."

The defendant, although listed as the United States - was actually the FDIC who had taken this specific bank into receivership. If the FDIC can lose a case like this with their significant legal resources - where might that leave you?

So, I guess that brings up the question as to why so many banks do this. I know it has saved our bank from some losses in the past. I think where we have prevented the losses is with Social Security benefits and other governmental benefits.

I just wanted to point out that it can be a two-edged sword and all banks should fully understand that the second blade of the sword may be as sharp as the first. Each bank has to weigh the risks and not go into this process blind. Many banks continue to do this because of the old phrase "Well we have always done this in the past". Since many newspapers now charge for the printing of obituaries and individual banks are expanding their geographical presence, it is becoming a less and less effective means of monitoring. Think of the banks that have multiple branches in multiple towns or that are served by multiple newspapers. One branch checks - another branch doesn't - what is the policy of the bank when you stand in front of a judge????

Just food of thought.........

Thanks for you help. We have expanded to four counties and you are right we have several different newspapers to check although it is done on-line for most of them

Bringing this item back to the surface...I wasn't sure in what context this question was raised. We are currently reviewing obituaries for ACH customers in addition to receiving the death notifications. From what I have found,nothing in NACHA rules require this - that it is up to the bank to determine best practice. Anyone have a strong opinion on this?

I have this issue at my bank and would like to know if anyone can point me to court cases where this practice caused a bank to loose money. Thanks for your help.

I have a number of bank client that do such monitoring and....it sounds like to me.....if you do this DON'T WRITE IT IN A POLICY or call it a "standard procedure".