Example of the Process of Monitoring Dormant Accounts 

Scenario

For many years, the Sample Bank in Newtown in the state of Highland has managed a checking account for Ms Adam. The address specified by the account holder is Valley Road, Mount City, in the state of Lowland. There is only a small amount on the account. Since opened, it has had the initial activity status Active.

Account Inactive

Recently, the customer has neither deposited money nor triggered bank transfers for her account. The Account Management system last posted a withdrawal on 01/03/2000 and stored this as time of the last customer-initiated payment item. The Sample Bank regards checking accounts for which the last customer-initiated payment item is at least a year old as inactive accounts. For this reason, exactly one year later on 01/03/2001, the Account Management system converts the activity status of Ms. Adam’s account from Active to Inactive.

Customer Contact

Almost two and a half years after the account was labeled as Inactive, Ms. Adam comes to the branch personally and collects her bank statements at the counter. The customer service representative notes 05/26/2003 as date of the last customer contact in the SAP Business Partner for Financial Services. Since an inactive checking account can only be reactivated (returned to the initial activity status) by the customer-initiated payment item event, this customer contact initially has no effect.

Dormant Account

The Sample Bank also regards inactive accounts to whose holders there has been no contact for at least 18 months as dormant accounts. On 10/26/2004, one month before the pending activity status conversion, using SAP Correspondence, the Sample Bank generates a notification to the correspondence recipient. In a letter, the account holder Ms. Adam is requested to get in touch with the bank. In this way, the activity status of her checking account could be reset to the initial one, namely Active. However, since Ms. Adam has moved in the meantime, she does not receive the letter. Additionally, even without having received the letter, she has neither initiated payment items, nor has she contacted the bank in any other way.. She no longer bothers about the old checking account because she has opened a new on with another bank in her new place of residence. For this reason, on 11/26/2004 - exactly 18 months after the date of the last customer contact - the Account Management system converts the activity status of Ms. Adam's checking account from Inactive to Dormant.

Abandon Account

It is now 2006. The Sample Bank is still regularly updating account maintenance charges and interest on Ms. Adam’s checking account. However, since these payment items are not defined as being customer-initiated, another status transition rule becomes effective on 05/26/2006; three years have now passed since the last customer contact. The customer has also not reacted to the second notification, sent automatically on 02/26/2006. Three months later, the Account Management system converts the activity status of the account from Dormant to Abandoned.

If the customer contact event takes place, the Account Management system automatically reactivates Ms. Adam’s checking account and manages it again as active account.

Continuation

After the process of monitoring dormant accounts you can continue with the process of escheat . For a continuation of this example, see Example for the Process of Escheat.