Dormant asset regime to be extended beyond bank accounts | Banking

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Why are bank accounts marked as dormant?
A “dormant” or “inactive” bank or real estate account is an account that has not been used for an extended period of time. Officially in the UK, this is an account in which no transactions have been made for 15 years and the owner cannot be traced.

However, banks will often act much sooner than that. For example, HSBC says that if a customer does not use an account, they can restrict incoming or outgoing payments “to protect against fraud”. It will do so after 12 months for current accounts and after two years for savings accounts.

Barclays does the same after 18 months for current accounts and five years for savings. The NatWest Group applies the change after five years and Lloyds Banking Group after three years.

Do I need to be informed if my account has been declared inactive?
In most cases, yes. However, there are no formal rules on how or how often banks should attempt to get customers together with their money. A short section of the FCA’s banking conduct manual simply states that banks must “allow” customers to find and access lost or dormant funds “to the extent possible” even if they cannot provide enough. information about their account.

Rather, the banking sector is driven by its own commitments. These indicate that a bank will write to the most recent address held for the customer before freezing the account unless mail has already been bounced from that address. “He may also make other attempts to find you,” the promises state.

Banks are under no obligation to actively seek out and contact customers with “lost” accounts – which generally means it is up to individuals to initiate a search, if they are even aware that they are. have lost track of an account.

FCA rules governing other parts of the financial services industry – like life insurance and pensions – set much stricter rules for contacting clients in the event of account loss. If insurers initially lose contact with customers, they are forced to try to find them again after 18 months and again every three years.

What should I do if my account is put on hold?
If you think your account has been inactive for less than 15 years, contact your bank directly. Accounts can usually only be reactivated after verification of customer identification and verification.

What if my account has been inactive for more than 15 years and I have lost the details?
After 15 years, most banks transfer deposits from dormant accounts into the government-backed dormant asset scheme. It is managed by Reclaim Fund Ltd, which aims to hold sufficient funds to cover the money given to the people who get their money back, while also distributing the surplus to the National Lottery Community Fund so that it can go to good causes.

Customers of inactive bank accounts still have the right to get all of their money back after it is transferred to the fund.

They may wish to start the process of tracking their old accounts using a free tracking service called My Lost Account.

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