Time is running out for banks and building societies to reunite savers with the money they have forgotten that they own.
In a few weeks, the Government is set to introduce legislation allowing money held in "dormant" bank and building society accounts to be moved into a central pot for distribution to good causes. From early 2009, up to £500m could start to flow out of accounts that have remained untouched for 15 years into the Government's Unclaimed Assets Scheme (UAS).
"With 3.2 million people moving home each year, and changing personal circumstances, it is unsurprising that funds in dormant accounts are so high," says Melanie Mitchley, spokeswoman for credit reference agency Call Credit.
So with less than 18 months to go, what are banks and building societies doing to reunite savers with their cash?
The truth is their response, to date, has been mixed. Nationwide, which holds £42m in dormant accounts, has written to 24,000 members encouraging them to claim account cash. It is also appointing a search agent to trace people with whom contact has been lost. Likewise, Skipton building society is seeking out members using its Call Credit arm. Meanwhile, the Yorkshire and Coventry building societies are both drawing up plans to contact account holders.
More active still has been HBOS, including the Halifax, Bank of Scotland and Birmingham Midshires. HBOS is probably the biggest fish in the dormant account pool, with £50m poised to go to the UAS in 2009. Since spring 2006, it has been writing to customers with dormant accounts and using tracing agents. So far it has reunited savers with around £5m.
But other big high-street names – including HSBC, Lloyds TSB and Royal Bank of Scotland – are wholly relying on an industry scheme run by the British Bankers' Association. This, and a similar one run by the Building Societies Association, relies on savers coming forward to claim their cash.
As the clock ticks for savers, Ms Mitchley says banks have to do more. However, the reluctance of some financial institutions may be explained by the boost to their balance sheets provided by dormant- account cash.
Better news is the Government's pledge that, even beyond 2009 and the launch of UAS, savers will still have a legal right to reclaim their cash at any time.
With so many banks and building societies being slow to act, consumer groups recommend that people comb their financial records and claim what's rightfully theirs.Reuse content