Banking industry sets out its role in unclaimed accounts regime

The British Bankers’ Association has published details of its work programme to deliver the unclaimed accounts scheme announced in Parliament.

The Dormant Bank and Building Society Accounts Bill introduced into Parliament yesterday will provide the legislative framework and statutory protection for the scheme. The BBA and Building Societies Association (BSA) will work on the responsibilities of banks and building societies in delivering the non-statutory elements of the scheme, including the planned reunification initiative, changes to the Banking Code and the detailed arrangements for the operation of the scheme.

BBA Chief Executive Angela Knight says: “The Government and the banking industry have been working together to bring about an unclaimed assets regime. This will release money from unused bank and building society accounts for use on community causes and will crucially leave undisturbed the rights of account holders or their legal heirs to reclaim their money at any time.

“If you have money in an account, it will always be your property (or if you die, it will become part of your estate). This is the case no matter how many years pass.”

The key to this is the inclusion of an appropriate definition in the legislation that ensures that money is only transferred which is likely to be genuinely unclaimed. A central reclaim fund independent of the industry and Government will set aside money to meet the cost of future reclaim before handing over the balance for use on community causes.

The Bill proposes that accounts be considered dormant after 15 years. At that point, around 80 per cent of money in dormant accounts remains permanently unclaimed. With shorter periods the pattern of reclaim rapidly becomes higher and less predictable.
Other key elements - the planned use of the existing industry infrastructure, the inclusion of commitments to the customer in the Banking Code, the FSA regulation of the reclaim fund, inclusion in the Financial Services Compensation Scheme and a right of access to the Financial Ombudsman Service – all combine to provide account holders with confidence in their ability to reclaim any lost money that subsequently comes to light.

Prior to the scheme coming into operation the banking industry has also committed to undertaking a further reunification initiative aimed at re-uniting customers with their lost accounts where a trail can be found. The BBA is also working with the BSA and National Savings and Investments (NS& I) to improve the accessibility of our free central tracing services.