My wife and I have an E or S savings account with an ATM facility. One year back, the bank verbally reported that we overdrew our account by a certain amount, though we did not have any overdraft facility in our account.
Since then we have stopped using the account, but whenever we meet the bank person, he asks us to pay the amount in cash. Are we in any way legally vulnerable to the bank as the issue is a constant tension for us. The account is not active now as we have not used it for more than one year now.
It's not necessary for a formal overdraft facility to be in place for an account to go overdrawn. It's possible that the bank simply decided to approve one or more transactions that resulted in an overdraft. You can certainly inquire about how the overdraft occurred.
If the account, indeed, has an overdraft balance, ignoring that fact won't make it go away. That your bank hasn't taken more aggressive action to recover the funds is, frankly, surprising.
We urge you to find out the details of the overdraft and resolve the matter quickly. If the overdraft is not resolved, the bank could take collection action against you, and that could include court action. It could also report the overdraft to credit reporting agencies, and such a report could adversely affect your credit ratings.
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It's not necessary for a formal overdraft facility to be in place for an account to go overdrawn. It's possible that the bank simply decided to approve one or more transactions that resulted in an overdraft. You can certainly inquire about how the overdraft occurred.