I was told by a friend that their bank cancelled their debit card because they had not used it in 6 months. Do any of your banks have the same or similar policy? Thanks for information.

FWIW, I've never heard of a bank doing this for debit cards, but I've had it happen with credit cards.

It is common practice around here to cancel debit and ATM cards after a certain period of non-use. We close all inactive cards periodically thoughout the year - so in the range of 6-9 months of non-use. It is only occasionally that a customer is inconvenienced.

This is a good idea from a security perspective and would a) reduce unknown losses under Reg E because the card hasn't been seen in 4 months and b) encourages use.

noctrl02 - Where do you disclose the fact that you will cancel it after a certain period of non-use? The Reg E disclosure? I ask because we may look into doing this and I'm curious as to where you put that information. Thanks!

We follow the same process for unused debit cards. I don't know that it has to be disclosed anywhere. It's not as if you are closing an account, you are just turning off an unused access devise. Some systems allow you to reinstate the card if the customer calls requesting, or you can always issue them another card. There is language on the back of the card itself stating, "This card is property of 'BANK' and must be surrendered upon demand." That in and of itself may cover it.

You should be able to disclose on the debit card application/agreement.

I would put it in the Agreement of use so you can at least inform the customer. I would also do it at issuance and to spur use, I would notify the customer a few weeks before termination that it will be turned off if not used.

If the customer forgets about a required use but has it set aside for an emergency, you'll have customer service issues if they have that bona fide emergency and you turned off their card.

Part of the thrust here is to ensure they know where it is, and that they use this convenient access device. Remind them about it if need be. If they really don't use it or plan to, turn it off as it is a liability.

Wouldn't the cancellation of an ATM or debit card be considered termination of an EFT service requiring a change in terms notice under Reg. E?

We cancel cards on dormant accounts or on accounts that have not been used for a year. We also do not reissue them. It doesn't state anywhere in our Reg E disclosure this policy, but our Reg E disclosure states "The Bank reserves the right to cancel use of an Access Device at any time without notice." It also states in another place "The Card remains our property and we have the right to refuse to issue the Card or to revoke the Card at any time with or without cause or notice."

Apparently the answer is in the commentary to 205.8(a). The only question then is whether or not a bank would want to notify its customers out of courtesy.