Facts on the Dormant Bank Accounts Government Act

In November 2008 the government passed the Dormant Bank and Building Society Accounts Act. One of the major principles of the act is to reinvest unclaimed money back into the community. So what exactly does this mean for those who are looking to reclaim their lost money?

Dormant Bank Accounts and Unclaimed Assets

In banking terms a bank account is dormant if there has been no customer activity within a set time period; usually between three and 15 years. Most banks will write to customers asking if they wish the account to remain active. However, in a number of cases banks will not be able to reach customers due to reasons such as moving home or name changes. Customers can still reclaim money in dormant bank accounts even if the money has been redistributed under the Dormant Bank Account Act.

The Government Wants Your Money

The Dormant Bank and Building Society Act 2008 has been introduced to redistribute unclaimed money in dormant bank accounts. This will also include building societies and National Savings and Investments (NS&I) accounts. There is a huge amount of unclaimed money sitting in dormant bank accounts. With the new act in place the government will be able to collect and distribute unclaimed money from dormant accounts after 15 years.

Where the Unclaimed Money is Going

If the government does collect the money from dormant accounts then the money should be distributed into the wider community. This can include banks donating the money to charity and funds being donated to the Big Lottery Fund with funds then distributed into various community projects. According to the government the money from dormant accounts is allegedly being taken to benefit the wider community.

Customers Will Be Able to Reclaim Their Money

There has been a rise in customers reclaiming their lost or forgotten funds. Many customers have been using unclaimed money tracking services to recover old or forgotten bank accounts. Customers who find their dormant accounts can still claim back their money plus any interest due even if the account is dormant and the money has been collected by the government.

The Dormant Account Time Period is 15 Years

Different financial institutes have different rules as to what time period an account actually becomes dormant. The government has set the dormant account time period as 15 years before they can collect the unclaimed money. If there has been no customer activity in this 15 year time period then the government will collect this money. The definition of customer activity is contact with the bank or building society or any transactions on the account.

Protection from the Dormant Bank Accounts Act

If customers are aware that they have old accounts with money still in them then it is an easy process to keep the government from taking the money. Simply contacting the bank and asking for an account balance is classed as customer activity. Depositing or withdrawing money in an account will also be classed as customer activity. By doing this the government and the banks cannot class the account as dormant.

Find Your Old Accounts

There is around £500 million in unclaimed money sitting in dormant bank accounts. There is also a further unclaimed £435 million sitting in NS&I accounts. It’s no surprise that unclaimed money trackers have grown in popularity. Companies such as the Unclaimed Assets Register can help reconnect customers with forgotten and lost accounts. They will charge a small fee for this service, around £25, but if successful the payoff could be worth the small charge.

The Dormant Bank and Building Society Act 2008 means that millions of pounds will be taken from customer’s accounts. It is in customer’s best interests to find any dormant accounts. This can include deceased relatives who have died without leaving a will. It is up to the customer to prove that the account is actually theirs before they can reclaim any funds taken by the government under this new act.