My bank sends "reminder" letters to customers at 10 and 20 days with a final "demand" letter sent at 30 days notifying them that their account will be closed. They also receive a phone call at 15 days.
The initial letters include the total amount owed by the customer, which would be the amount overdrawn PLUS any corresponding OD/NSF fees. However, at the 30 day mark, we charge off the account so all OD/NSF fees are effectively refunded in order to bring the account to zero and close it. Therefore, the 30-day letter has only been requesting that the customer pay the amount they overdrew the account.
In some ways, this practice seems fine since it benefits the customer. However, to me this practice brings additional risk as it results in disparate treatment of customers because, assuming two customers overdrew their accounts by the same amount, the customer who pays after 10 days overdrawn WILL pay more than the customer who waits to pay until after their account was closed. Of course, there are other consequences for someone who waits to pay the overdraft until the 30-day mark/their account is forcibly closed. My logical brain tells me it is unlikely a regulator would take issue with all this as long as it is consistently applied; however, you never know...
When I asked why we refunded the fees rather than still charging the customer for them, the vague response was that "it has always been done that way," which is obviously not a good answer. I can understand it might look like we have to refund them logistically in order to bring their account to zero, but I don't believe that means we can't collect the fees that we are owed. Outside of that logistics, I can't think of any reason HAVE to refund the fees - from a compliance side. We've already disclosed the total amount due, which includes the fees, and as long as we are consistent with how we are approaching these situations, I don't see an issue with it. Am I missing something?
Any thoughts on the matter are greatly appreciated.
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