Banks appeal on dormant accounts

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The Independent Online

Leading banks and building societies are planning a last-ditch attempt to water down plans to force them to hand over up to £20bn of cash held in dormant accounts.

Leading banks and building societies are planning a last-ditch attempt to water down plans to force them to hand over up to £20bn of cash held in dormant accounts.

Bank bosses warned last night they did not accept the growing political consensus that unclaimed assets - held in accounts that customers have often forgotten about - should automatically be used for good causes. Rachel Le Brocq, of the Building Societies Association, said: "We will continue to campaign against these proposals because we believe the money held in these accounts belongs to the people who put it there."

Nigel Shattock, of the British Bankers Association, said that while the BBA now accepted banks would have to give up some dormant account money, it remained very difficult to define what constituted unclaimed assets. "There are widespread taxation, legal and accounting concerns about using this money for a purpose other than the benefit of the original account holder," he said.

The warnings follow the publication this week of the Labour and Conservative manifestos, both of which include plans for a raid on unclaimed bank accounts. Labour's said: "We will work with the financial services industry to establish a common definition and a comprehensive record of unclaimed assets."

The pledge follows a Budget commitment from Gordon Brown to set up a charitable fund using dormant bank account cash. If Labour is re-elected, he is expected to announce definitive plans before November's pre-Budget report.

The Tories want to use the same funds to shore up rescue funds for victims of companies that have gone under leaving a shortfall in their pension schemes.

Industry analysts estimate unclaimed assets total between £10bn and £20bn.

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