The Department of Finance is finalising legislation that will clear the way for the State to seize unclaimed funds lying in dormant bank accounts. It is likely to be some months yet before its provisions will be known, but if you suspect you may have some unclaimed funds it would be wise to check with your bank.
Of course, the account need not be in a bank. It could be a building society account, An Post deposits or even credit union savings. The nature of such savings means the problem may even be more acute there than in traditional bank accounts.
The Government has yet to define the time period during which an account must be untouched before it should be classified as dormant and this will have a bearing on the amount of money that can be claimed by the State.
In a number of European states, the time period ranges from 10 years to 30 years and the Minister for Finance is thought most likely to settle on 15 years. If this is adopted in the Republic, the Department of Finance has estimated that more than £139 million (€176 million) will be seized from dormant accounts.
If the ceiling rests at 20 years, the total amount of funds in qualifying accounts is substantially less, with official estimates pointing to a sum of around £54 million. But if the timeframe is narrowed to 10 or five years, the sums of money involved are huge, ranging from £469 million to £1.7 billion.
The figures include money lodged in national savings certificates, which by definition tie up money for long periods, and life assurance policies.
When the legislation is published, the Department of Finance has indicated it will begin a notification process in a bid to flush out account holders. A process will also exist to facilitate anyone trying to re-claim these funds once they are under the State's control.
Its first objective is to return dormant funds to their legitimate owners, proponents say. Only when the account-holders are not contactable will the balance be transferred from the financial institutions to a State-controlled board of trustees, which will be under the remit of the National Treasury Management Agency. The funds will be used for charitable causes.
For now though it may be worth your while making enquiries at your financial institution about whether you have an account with even a small amount of money in it that you have overlooked.
Some readers have noted that recently they have been receiving statements for the first time in years relating to a bank account containing a few pounds.
Bank of Ireland says it is actively trying to alert customers where accounts have been lying dormant for some time. AIB says it has no such campaign underway but customers can make enquiries and will receive assistance in tracing accounts upon request.
To reclaim a bank account now, you will be expected to provide details on the branch in which it was held. It would be helpful to have a statement or deposit book.
Enquiries can be made for relatives or friends. If you are making the enquiry for a relative or a friend, you will have to provide evidence of your legitimate interest, such as a letter of consent or other documents which may provide sufficient proof.
In all cases, you will be asked to fill out a Dormant Account Claim Form, which should be available at all bank branches. You should bring identification, such as a passport or driver's licence with you when initiating you enquiry.
If it is your own account, the key requirement for the bank will be to be satisfied that your signature and other personal details correspond with those supplied when the account was opened.
Should the bank agree that you have a valid claim, it will notify you of the balance of that account and any interest which may have accrued, as well as details on how to access those funds.
If the bank is unable to validate your claim, a representative will notify you and supply the reasons why they are unable to proceed any further. Where you are dissatisfied with this explanation, do not be afraid to raise the issue with the bank's internal complaints officer, or ultimately contact the Ombudsman for the Credit Institutions.
The banks claim that dormant accounts have been a problem for many years and are keen to play down the financial impact they make on their day-to-day business. In many cases where in-house fraud has been uncovered at a bank, it has largely centred on dormant accounts and procedures have been tightened up around them over the years.
Bank of Ireland doesn't send out statements unless a customer has more than £10 in their account and if this money is untouched for three years, it is automatically transferred into a central bank account for administrative reasons. AIB will also deactivate a customer's account if it has not been operational for three years. Both banks stress that interest continues to accrue on those funds while held in a central account.
There are many reasons why accounts become dormant such as forgetfulness, emigration, death and change of address. The fact that statements are not sent out for bank accounts in which very small amounts are held makes it easier to forget about their existence.
To ensure that accounts are not forgotten, it is advisable to at least make one transaction annually. You should also make sure the institution has an up-to-date address.
