I am starting an audit of Dormant account and will use the Dormant Account Audit Program from Bankers Tools. Can someone please explain to me why the Bank would send positive confirmations? This is the first audit performed on dormant accounts.

Any help is greatly appreciated.

Don't know if this is the right answer, but my thinking is that these people haven't come in, mailed in or answered anything else from you, if they tossed out a negative confirmation, you wouldn't gain anything. The confirmation would serve no audit purpose if they were just given the opportunity to ignore another piece of mail from you.

If you want to hear from them, institute a dormant account fee. We have many many small dormant accounts. We enacted a $4 dormant account fee. First we disclosed it on our website and our newsletter and statement stuffer. We waived the fee if their balance is over $1,000, if they are a minor, or if they have a CD or an IRA type account also. Not only did we hear from many people that had forgotten all about us, we boosted our income!

We agreed to refund one statement cycle's fees when they brought the account active. You would be surprised how many people had a year's charges or more before they even looked at their quarterly statements - then complained. But, we have less dormant accounts now!

Check state law before instituting a fee. It is illegal in CA to charge a fee just because an account is inactive.

Al

Texas is the same in that you can't cause the account to be devalued. Texas uses "inactive" I believe, in place of the term "dormant." So watch any keyword searches too.

Does it make a difference if you are a national bank and the OCC permits charging dormant accounts; therefore superceding state law?

Many years ago, possibly before the thought of federal preemption, the decision against BofA made it abundantly clear that service charges could continue on dormant account, but that any new charges, including increasing charges on existing accounts, was not allowed.

That was so long ago that BofA was only in CA.

Being relatively new to OCC regulation, could you please provide a cite stating that national banks can impose such a fee.

Al

Here is some old discussion on the topic. See my comments about an unofficial opinion I'd read about, in this Texas thread.