Consultation on dormant bank accounts launched
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Issued 17 February 2009
The Government today launched a consultation document on secondary
legislation to establish a UK dormant accounts scheme. Subject to responses, the
Government will introduce the secondary legislation in Parliament later this
year.
Many people forget about, or lose track of, small deposits of money in bank
and building society accounts. Despite the efforts of banks and building
societies to reunite these funds with their owners, they build up as unclaimed
assets in the banking system.
The consultation document sets out draft secondary legislation to extend the
scope of the Financial Services Authority’s regulation to include dormant
accounts reclaim funds. It also places a requirement on building societies
participating in the scheme for smaller institutions to publicly disclose
information in line with the requirements placed on smaller banks by the Act.
Ian Pearson, Economic Secretary to the Treasury said:
“The Government is committed to carefully investing this unclaimed money back
into society, while making sure that people can retrieve money they may have
forgotten that they had. I want to welcome this consultation as a step
towards delivering a scheme that is fair for bank account holders while
benefiting good causes right across the UK.”
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Notes
- As announced in the 2005 Pre-Budget Report (PBR), the Government has been
working with the banking industry to design a scheme to allow money in dormant
accounts otherwise known as 'unclaimed assets' to be reinvested in society.
- Following preparatory work with industry, the Government issued, in 2007,
two consultation documents on a proposed scheme. The first, A UK Unclaimed
Asset Scheme: a consultation was published in March 2007 and set out proposals
for the operation of the scheme. A second consultation, Unclaimed Assets
Distribution Mechanism: a consultation was published in May 2007 and set out
the Government’s proposed principles for the distribution of available money
in England, Scotland, Wales and Northern Ireland.
- This consultation document follows the successful passage of the Dormant
Bank and Building Society Accounts Act 2008, which received Royal Assent on 26
November 2008.
- The Act enables banks and building societies to transfer dormant accounts
to a central reclaim fund for distribution to the benefit of the community,
while ensuring that the right of account holders to reclaim their money is
protected.
- In the March 2007, consultation paper, the industry committed to
participate in the scheme and to take the lead in selecting or setting up a
reclaim fund.
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Article Published/Sorted/Amended on Scopulus 2009-02-18 19:02:33 in Business Articles
