Answer:
Answer from Randy:This is a state law issue which governs the handling of dormant/inactive accounts.
Answer:
Answer from Andy:Some states may use the term "dormant" while others "inactive." There may be other terms as well so it is important to know what the state calls it and ensure the bank is not confusing these. Next, there may be a prohibition preventing any fees that decrease the value of the account after a specified period of inactivity. This means banks can't charge the fees that effectively close the account. Rather than close the account by sending the customer the balance, it may be advantageous to simply remind the customer of the deposit. For some accounts this may not be cost effective. But it is not uncommon to read about the bank that escheated funds when that same customer has other, active accounts with them. We also read of escheatments when the business account is in the same building as the bank. Did these banks make any attempt at keeping up with the customer? As Randy noted, applicable state laws will often indicate what is allowed and what is required.
First published on BankersOnline.com 8/09/10
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