We are looking at transactions to dormant accounts as part of our Deposit Accounts audit. There are two questions that I would please like to get opinions on:

1) An account has an automated reoccuring transfer from one account to another account of the same customer. However, this automated transfer was placed on the account ten years ago. There is no other activity on the account that the funds are being transfered from. The account is considered dormant. Is this correct? If it should be dormant is it based on the automated transfer being initiated ten years ago or do automated transfers not qualify for customer contact if that is the only activity after the account reaches dormant status?

2) When a customer calls in and speaks with a personal banker to have a transfer made from a dormant account to another account of the same customer does the dormant account now become an active account as long as the customer's identity is validated? Are there certain requirements for this validation and are their other procedures or regulations that have to be followed to consider this as customer contact for removing a dormant status?

Thank you.

Keep in mind that individual state rules on the definition of "dormant" may be different:

1- In this case we would consider the account still dormant. No "new" activity since the prior escheat report so technically the account is dormant. And the customer getting a statement showing the transfer is not sufficient (at least in my state) to prove knowledge of the account. Must be a signed transaction witin the past escheat period - which for us is July 1 - June 30.

2- We do not consider a phone transfer to activate the account. It does activate it on our system, but our procedures require that we compare the next customer-signed transaction to the signature card on file. Only then does the account become "active". This is a step we take to deter fraud as well as comply with escheat requirements.

We have an outside CPA firm hired by the Division of Unclaimed Property audit us yearly. We have to have copies of the transactions activating or closing out the account. We can also have a signed statement from the customer stating they are aware of the existence of the account.

On item #2, we would accept a phone call from the customer (if documented by the employee responsible for reviewing/monitoring Dormant accounts had it well documented).