Example of the Escheat Process 

This example illustrates the process of escheat. The contents of this example are based on the example of the process for monitoring dormant accounts and is a continuation of the scenario described there.

Scenario

30 years later: It is the year 2033. Ms. Adam’s checking account still reflects activity status abandoned, because the customer is no longer in contact with the Sample Bank.

Account Reverted by Escheat

In accordance with the laws in the state of Highland in which the Sample Bank is located, when more than thirty years have passed since the last customer contact, the account holder loses entitlement to the account balance. If the bank has tried in vain to contact the customer, after a waiting period of 120 days it can transfer the account balance to the clearing account.

On 05/26/2033, using SAP Correspondence, the Sample Bank generates the third notification to the correspondence recipient Ms Adam. Since she does not react to this letter either, on 09/26/2033,the Account Management system assigns Ms. Adam’s checking account activity status reverted by escheat. Now it can no longer be reactivated, neither through a customer-initiated payment item, nor through customer contact.

Provisional Report

The laws in the state of Highland require creation of a provisional report on 10/31 of the year. This has to list all checking accounts that are scheduled for escheat on 10/01 of the year. Using Business Intelligence, the Sample Bank creates a report covering all checking accounts that are due for escheatment in 2033 and transfers the details to the authorities responsible. The report includes all checking accounts that reflect an activity status that has the Relevant for Escheat indicator in the Customizing for Account Management on the reference date.

Cash Transfer

On 09/28/2033, two days after the activity status of Ms. Adam’s checking account becomes reverted by escheat, the Sample Bank transfers the balance of the account amounting to € 176.98, first to an own clearing account and then to an account of the authorities responsible.

Again, the prevailing laws must be adhered to: The laws in the state of the Sample Bank stipulate that the escheated balances must be transferred to accounts of the state in which the account holder is resident. Since the address of the account holder is Mount City in the state of Lowland, the Sample Bank transfers the account balance to its clearing account CHECKING_1. This clearing account collects the amounts of all escheated checking accounts whose account holders have specified the state of Lowland as address. Then the Sample Bank transfers the escheated amounts from the clearing account CHECKING_1 to an account of the state of Lowland.

Account Closure

On the very same day as the checking account is reverted by escheat, the Sample Bank finally closes Ms Adam’s account as it is no longer needed. It specifies Escheat as notice reason. The system stores 09/230/2033 as account closure date.

Final Report

The laws required that the Sample Bank creates a second report on 12/15 of the year. This has to list all checking accounts in the state of Lowland that have been closed due to escheat up until 10/01 of the year. Using Business Intelligence, the Sample Bank creates a report covering all checking accounts that are due for escheatment in 2033 and transfers the details to the authorities responsible. The report also includes details about Ms Adam’s account, such as account number, escheated amount, and the last address of the account holder.