Refusing & Returning Drafts on Savings Accounts

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Question:

We are seeing an increasing number of drafts come through on savings accounts, including a few fraudulent items which we were not able to identify as fraudulent within 24 hours. In our depositor's agreement we state that "We may refuse any withdrawal or transfer request which you attempt on forms not approved by us, by any method we do not specifically permit..." Operationally, we have discovered a way to identify the drafts drawn on savings accounts the day they come in. Can we legally say that we do not accept drafts on savings accounts and return any that come in?

Answer:

If you have notified your customers of that policy, I see no reason that you would be required to accept such drafts. Understand that some customers have come to expect an ability to authorize occasional payments of that type, or ACH debits. You may ruffle a few feathers, but you do call the shots on this.

First published on BankersOnline.com 4/24/06