Answer:
Answer by John Burnett: There is no requirement in the UCC that you notify your customer that he/she/it is overdrawn. There may be a state rule.
However, it's certainly important to note that the recently-issued overdraft protection program guidance includes in its list of best practices the prompt notification of overdraft status.
Answer:
Answer by Andy Zavoina: The advantage to the bank in doing this is customer service and if there is fraud, early detection. If that early detection reveals unauthorized electronic fund transfers, the money you save may be your own.
The guidance John mentioned is not a requirement. But if you have an overdraft protection program, it is certainly a best practice.
Answer:
Answer by Ken Golliher: As noted, the notice serves to protect your institution as well as advise the customer. Moreover, today's NSF fees are steep to the point where they are difficult to justify. Sending the notice is part of the rationale for the fee...
First published on BankersOnline.com 07/18/05
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