A Toronto man was shocked when his financial institution drained $700 in dormancy fees from one of his accounts.
Banks and credit unions charge dormancy fees when accounts have remained inactive for a period of one year, meaning no withdrawals or deposits have been made.
A CTV Toronto viewer told Consumer reporter Pat Foran that his bank withdrew hundreds of dollars from a savings account set up by his late father.
When Myron Dobromilsky was a young man, his father put $900 in a savings account for him with the Auto Workers Community Credit Union.
Dobromilsky said he wanted to spend the money right away, but his father urged him to save it just in case.
“That’s emergency money. Some day, you never know, you may be down and out and destitute. You might need that money,” Dobromilsky said his father told him.
“So, I left it,” he added.
His father died 20 years ago, and the money sat dormant in the forgotten account. Over the years, statements would come in, but since Dobromilsky wasn’t making deposits or withdrawals, he didn’t look closely at the statements.
“I know the money’s there, and it’s safe, so no worries,” he said.
The credit union called him in November, to let him know that the account would soon be empty. He said he was shocked by the news.
“I thought they were out of their minds,” he said.
Dobromilsky didn’t realize he’d been charged a dormancy fee each month of $40. Over a year and a half, the account had been depleted by $700.
He complained, but was told that the union had sent him a letter before the fees began, warning him that they would soon take effect. He was offered a refund of $350, which he refused.
He then compared the dormancy fees from the credit union with those from his regular bank. He found that there were no charges for dormant accounts at the bank he uses.
CTV Toronto contacted the Auto Workers Community Credit Union, who said it appeared that Dobromilsky didn’t read the correspondence sent by the organization about the fees.
“However, we will provide a full refund of his dormancy fees while our board conducts a review,” branch manager Donna Shields said in a statement.
Dobromilsky said he was glad that he’d be getting the money back, and that he thought his father would be proud that he fought the fees.
“There’s no way to justify $40 a month for a dormant account,” he said. “It worked out for the best.”
The credit union said its dormancy fees are fully disclosed in its product and service guide, and reminded customers to check their monthly statements to avoid surprises.
