Adjournment Debate. - Dormant Bank Accounts. – Dáil Éireann (27th Dáil) – Thursday, 6 Jun 1996

Adjournment Debate. - Dormant Bank Accounts.

Mrs. O'Rourke

I raise this matter because there is no other way of giving it the due notice it deserves or impinging it on the minds of those who make decisions on the matter. I recently received correspondence from a very well versed lady in Dublin who is well able to express her opinion. She explained that she had a bank account which she had forgotten about and the bank had chosen not to remind her of it. She asked me to follow up the issue of dormant bank accounts. I would ask the Minister to request the financial institutions to do a trawl of all dormant bank accounts and send statements of those accounts to the customers involved or their representatives.

The lady who brought this matter to my attention discovered a balance of approximately £250 in a bank account of about a decade previously, about which she had forgotten. She discovered the account by accident when she found a statement from the 1980s and inquired if there was money in the account. It is interesting that no statement of the account had issued for years — no transaction had been made on the account in eight years. The woman was told by the bank that the account was considered dormant.

I would ask the Minister to establish with banks and other financial institutions how many dormant accounts exist. There could be thousands of such accounts, including those of deceased persons, involving many millions of pounds, which is due to the people concerned or their representatives. While it would be labour intensive to establish the position of all accounts, banks are in a strong enough financial position to undertake such a programme of work. Given that they are quick to seek charges from customers, such a service on dormant accounts would be a good way of giving consumers value for money. Once dormant accounts, as they are called by banks, are identified, banks should make an effort to contact the owners. That would also deal with the position where people lose track of accounts. The Minister should request banks to send at least one statement per annum on accounts with a plus balance. Such a review would uncover quite an amount of money which is due to individuals or their representatives.

Minister of State at the Department of Finance (Mr. Coveney)

Before I deal with the question of the issuing by financial institutions of statements to holders of so-called dormant accounts it is necessary to consider the issue of dormant accounts generally and what constitutes a dormant account. This whole question of dormant accounts is not an easy one as there is no legal or industry definition of when an account becomes "dormant". As a general rule a dormant account is one on which no transaction has taken place within a specified timeframe. I would exclude from this definition accounts where the holder has other active accounts with the institution. However, what this timeframe is or should be is far from clear.

My Department has been undertakeing an examination of the whole issue of dormant accounts, involving the representatives of both banks and building societies. This examination includes a process of identification of the number of such accounts in existence and the amount of money held in such accounts. This in turn requires clarification of what accounts could properly be recognised as dormant. This has involved the collection and collation of data relating to accounts on which there have been no transactions in, say, ten or 15 years, or some other number of years in order to ascertain when an account is truly extinct, rather than just dormant.

Given that we are talking about an examination of some millions of accounts, this is no easy task. Both the banks and the building societies have provided data based on a number of criteria and these have been examined. Without going into details, I can assure Deputies that the figures disclosed give no indication that these dormant accounts, in the aggregate, contain significant sums. Consideration of this matter is not yet completed.

In relation to the specific question posed by the Deputy I would like to point out that because of the variety of bank accounts now available in the market and the greater range of account options it may not be possible to issue statements in all cases. In regard to all statement-based accounts, such as current accounts, cashsave accounts and deposit-savings accounts, customers with these accounts generally receive a statement on these accounts annually, where there has been a transaction during the year. In certain circumstances, customers specifically request the credit institution concerned not to issue statements. In regard to other types of deposit accounts — generally pass-book or receipt based — it is the book or the receipt, as the case may be, which is evidence of the deposit.

In general, the Deputy will accept that a requirement to issue statements for all accounts to all customers could in the long run increase the level of charges levied on these customers because of the extra time and expense involved for the financial institutions concerned. Moreover, the consumer too must accept some responsibility for their own actions. If a consumer is unsure if he or she holds an account with any financial institution, they can write to the institution concerned to seek confirmation.

In relation to customers who have died I have been advised that solicitors, and appointed personal representatives, can readily obtain information on the state of a deceased customer's balances from his or her bank. Banks also variously provide an effective tracing service for solicitors or personal representatives seeking to establish whether or not accounts exist in the names of deceased persons, by means of which the whole of a banks' network may be checked. As a general rule, where an institution becomes aware of the death of a customer, branches endeavour to draw the attention of the next-of-kin to the existence of an account. That is the Department's general response to the issue but the Deputy raised a specific case. There is still a gap in terms of an account which a person has forgotten about and where no transaction has taken place.

Dáil Éireann debate -
Thursday, 6 Jun 1996