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ACH Debits After Notice of Death

Answered by: 
John Burnett

Question: 
We have an individual account set up. About six months ago we received electronic notification that the owner is deceased. No family member has come forth to settle this account.In the meantime, seven ACH debits are coming out of the account each month. This is seriously depleting the balance. Given that we know the owner is deceased, should we return these debits? We spoke with a president of a regional ACH association and he told us that ACH rules do not address this issue and he couldn't advise us to return the ACH. His concern was that ACHs that are payments for insurance premiums, house payment, utilities, etc., might have a serious impact to beneficiaries or other folks once that ACH is returned as unpaid. On the other hand, it doesn't make sense to allow an ACH to continue on for months and months. When a check is involved, we return it after 10 days. Seems like ACH should be handled the same way! Any help, guidance or advice is greatly appreciated!
Answer: 

Concerns for any lapse of payments notwithstanding, the bank has no authority to continue to allow ACH debits from the account if the sole owner of the account is deceased.

I'd take whatever steps you can reasonable take to verify the death of your customer. That done, I suggest you write to the estate of the deceased at the address in your files, indicating that you've been notified of the death and must now terminate activity from the account. Including a list of regular debits would be a service to any family who might read the letter.

Then start returning the debits.

First published on BankersOnline.com 121/06/04

First published on 09/23/2013

Filed under: 
Operations
Filed under operations as: 
ACH
Estate
IT

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