The Co-op establishes the Reclaim Fund
The Co-operative Financial Services has announced that its application to establish a central Reclaim Fund for dormant account monies on behalf of the industry has been approved by the Financial Services Authority (FSA) today. The new Fund will be known as Reclaim Fund Ltd, and forms a wholly owned subsidiary of The Co-operative Financial Services. It will operate independently with an appointed Board and Executive. The Fund will be run as a non-profit making organisation, and there will be no financial benefits to The Co-operative Financial Services administering the Fund. The accounts will be reported annually, with an additional report into Parliament every three years.
Following the authorisation from the FSA, Reclaim Fund is now ready to receive the initial tranche of dormant account monies from banks and building societies. These will be followed by further tranches as more institutions sign up to the scheme and periodical transfers in future years as and when accounts become dormant.
Reclaim Fund will then transfer any money considered surplus to that needed for customer reunification to the Big Lottery Fund, for onwards distribution to good causes, including for example the Big Society Bank in England.
It is important for bank and building society customers to be aware that they will still be able to reclaim their dormant account money, at any point in time. They should do this by getting in touch with their bank or building society as usual. Customers who think that they may have forgotten about an old account can also visit mylostaccount.org.uk which provides a free service to help trace lost accounts.
Reclaim Fund will be operated in a prudent manner to ensure that there are sufficient funds available to meet any requirements for refund of dormant accounts. Banks and building societies will then interact with Reclaim Fund to claim back money needed to re-unify customers with their dormant balances.
Neville Richardson, Chief Executive of The Co-operative Financial Services comments: "As a trusted financial organisation, we have been delighted to step forward and offer our support to the Government and the industry in establishing Reclaim Fund. We do recognise the need for the fund and the benefits that it offers both the industry and wider community."
Paul Mills, Executive Director of Reclaim Fund, said: "Our aims are very clear. While we will give as much money as possible to Big Lottery Fund for good causes, we will also be prudent in keeping back enough for customers who come forward to claim accounts they had forgotten about.
"I am very pleased that, after many months of careful planning and hard work on the part of my team, the financial institutions, including their trade bodies, and the Financial Services Authority, we are now ready to carry out those aims, as prescribed by the Dormant Bank and Building Society Accounts Act of 2008."
Based on the current industry view that the amount of money that the Reclaim Fund will receive is around £400 million, it is estimated that the first distribution to Big Lottery Fund will be in the region of £60-100 million and will be transferred in phases over the next twelve months.