Is anyone charging a "bad address fee"? This is where the account is flagged when a statement comes back undeliverable and the system charges a monthly fee for a "bad address"?

My old bank did....$2 per statement returned, and once returned, they did not flag the account...they would just keep sending them.

I thought it was not an appropriate fee to charge.

Of all of the nuisance fees that banks can charge, this one actually makes a lot of sense. The customer needs to keep the bank current on his address. When he doesn't, it causes the bank aggravation, since it has to special handle returned statements, etc.

I have never heard of such a fee, but I would imagine to be fair, the fee should only be charged once. When you receive the first statement back as a bad address, the account should be properly coded and you shouldn't be mailing any more statements out, therefore it shouldn't be charged for each statement, IMO. I agree with bbs that continuing to charge and not coding the account is not appropriate. I also think you could run into problems if you knowingly continue to send a statement to a bad address and the customer's information ends up being used fraudulently.

I should clarify that it is a good fee to charge, no objection to the fee itself.

Objection to keep sending mail to a known bad address, just so you can continue to collect the fee.

I agree with bbsgrant and GuitarDude's comment about it being unfair for a bank to continue to send statements when the bank knows the address is bad and charges a bad address fee for each returned statement. I think if a bank adopted that practice it opens itself up for a lawsuit (perhaps a class action lawsuit depending on the number of customer in the similar situation) under any applicable state unfair business practices statute.

Even if your bank will only charge one fee for the first returned statement, the fee better be listed in your fee disclosures that were given the customer.

Some States also disallow dormant account fees and I can see a State claiming this as a quasi dormant account fee.

I personally feel that returned mail is a pain in the you-know-what. But, I would have a really hard time implementing a fee for it. I'm hoping that if your bank does this, you are located in my town and you are my bank's competition.

Our bank charges a one time fee of $3.00 and flags the account so no other correspondence goes out to that customer.

If implemented, this fee would be charged monthly as long as the bad address remained on our system. When the discussion comes up about "change-in-terms" notices to inform existing customers of the new fee, it does not seem appropriate to charge customers with existing bad addresses the fee when we know that the statement message or insert will not be received at the bad address. Your thoughts? Thanks!

Refer to Randy's comments above and check with your state laws.

Consider: Once you get back a statement for bad address, most likely you will refrain from sending them additonal statements until you have the correct address, right? If so, what additional costs do you incur by not mailing a statement on a monthly basis that you can justify charging them each month?

If you think it will be a tool to get the customer to rush in and change their address, your wrong. Most customers do not read their fee updates and will not be aware of it.

Plus, if they are not getting a monthly statement, how will they know that you are charging them each month? Hence, how can they fix it or stop if they do not know?

It will appear to customers, and perhaps examiners, that your management found a great resouce of a little extra fee income that requires no extra work! Most customers can justify and accept the first charge...many will not tolerate additonal ones when they are not in the position to be aware of it and to fix it.