Don't let your sleeping cash lie
Ministers are set to grab money languishing in dormant accounts. Julian Knight reports
Sunday 24 August 2008
The clock is ticking for those people who have money sitting in dormant bank accounts. Next year, the Government plans to siphon off an estimated £400m held in accounts that have seen no customer activity for the past 15 years and use it to fund youth projects and other good causes.
The second reading of the Bill legalising the account grab is taking place on 6 October, and bank and building society insiders are urging people who think they have money in dormant accounts to get their skates on and reclaim their cash.
Rachel Le Brocq of the Building Societies Association (BSA) reckons that the money will start leaving accounts destined for government coffers as soon as next summer. "It is important to note that, even after distribution, the money legally remains the property of the account holder," she says, "but it would be easier on all concerned – including the charities set to benefit – if people come forward now rather than wait for the account to be closed and the money moved away."
The BSA, the British Bankers' Association (BBA) and National Savings and Investments have joined forces to set up the website mylostaccount.org.uk, which aims to reunite savers with their money.
However, Ms Le Brocq admits that success in tracking down a dormant account through the site is far from guaranteed: "The account holder logs on to the website and inputs their personal data, as many previous addresses as they have and as much as they know about the account that may be missing. This info is then forwarded to any financial institutions in their area or specifically mentioned in the application. They then search their records and see if an account exists. This takes up to three months to complete and the more information offered initially the more likely the success of the search."
Those people who manage to find a dormant account in their name will be expected to jump through security hoops before they get their cash, Ms Le Brocq adds. "They will be asked to produce identity documents to prove they are who they say they are. Which documents and whether originals or copies suffice will vary between financial institutions."
Not all financial institutions are relying on mylostaccount's "if we will build it, they will come" approach. Some, most notably the Halifax, are actively seeking out people who may have a dormant account with them.
Claire Miller, spokeswoman for Halifax, says: "We have written to the last address we have for our dormant customers and also asked the credit reference agency Experian to track people down for us who might have moved.
"We then write to them and give them the option of moving money to another account or signing a piece of paper to ensure it is no longer dormant, protecting it from being siphoned off."
To date, Halifax has managed to reunite more than 7,000 customers with nearly £17m in cash. But the bank estimates that there is still more than £30m languishing in its accounts.
Some smaller building societies are following a similar approach but in a less high-profile way, Ms Le Brocq saysp. "They are going through their records and writing to members they haven't heard from in 15 years. They are speaking to the local press and some are even employing credit reference agencies to trace customers on a case-by-case basis.
"However, there has to be a cost benefit analysis done. Some of the accounts won't have enough cash in them to warrant going to the expense of a trace."
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