Written Answers. - Dormant Accounts.
Richard Bruton
Ceist:
455
Mr. R. Bruton
asked the
Minister for Finance
if his attention has been drawn to the fact that when certain financial institutions have demutualised, accounts which have previously been dormant have conferred significant benefits on their owners through the distribution of shareholders; his views on the implications of the Dormant Accounts Act, 2001, on the rights of the holders of such accounts to benefit from demutualisation and if he will introduce an obligation which in the event of demutalisation, the institution involved would be obliged to make direct contact with all account holders, even those with a holding of less than ?100 in order to fully protect their rights.
[17390/02]
Richard Bruton
Ceist:
456
Mr. R. Bruton
asked the
Minister for Finance
if his attention has been drawn to the fact that holders of An Post certificates and bonds will, under the Dormant Accounts Act, 2001, be regarded as dormant account holders if they do not regularly cash some small part of these holdings; and if arrangements will be made to ensure that this extraordinary anomaly is quickly removed.
[17393/02]
Richard Bruton
Ceist:
457
Mr. R. Bruton
asked the
Minister for Finance
the procedures under the Dormant Accounts Act, 2001, which occur where an account holder of a dormant account is deceased, and the initial enquiry from the financial institution does not uncover any immediate relatives; and his views on whether it is appropriate in such cases that the financial institution publish the name of dormant account holders who are deceased and whose relatives have not contacted them.
[17394/02]
I propose to take Questions Nos. 455 to 457, inclusive, together.
The main purpose of the Dormant Accounts Act, 2001, is to reunite the beneficial owners of dormant accounts with their money, by obliging the credit institutions in which those accounts are held to notify the account holders of their existence. Where the owners of the accounts cannot be traced, the Act provides for the transfer of the moneys in the accounts to the dormant accounts fund, so they can be used for community and charitable purposes. The Act preserves the rights of the account holders – and of their heirs and legal representatives – to reclaim the moneys from those accounts, together with any accrued interest, in the event of claimants coming forward to claim them after the transfer to the fund.
In essence, the procedure is as follows. Where the balance in an account is €100 or more, and the account has been deemed "dormant", the institution is obliged to make reasonable efforts to contact the account holder to inform him-her of the existence of the account and his-her rights in relation to the moneys therein. This notification will be sent to "the last known address of the account holder". The notification requirement does not apply where the balance in an account is less than €100, or where the account holder has requested that no notifications in respect of his-her account be sent by the institution, or where the institution has previously tried to contact the account holder to no avail. However, appropriate notices must be placed by, or on behalf of, the institution in two or more national newspapers. The first such notices were published on 30 April last, and thereafter they are to be published on the first weekday in October each year, commencing this year. Where no communication in respect of an account is received by the institution by the following March, the moneys from that account will be transferred to the dormant accounts fund in April, commencing next year. This transfer does not affect the rights of future claimants, that is, the account holder or their heirs or beneficiaries, to lay valid claim to the moneys and to any interest which may have since accrued.
Section 16 of the Act provides that the transfer of moneys to the fund, by a building society, is without prejudice to the rights of share account holders and preserves all membership rights in accordance with the Building Societies Act, 1989. The rules of each society provide, in accordance with the Building Societies Act, that members holding shares to the value of €125 or more, for the preceding six months and holding such shares on the date of voting in relation to the demutualisation, as well as "borrowing" members, are entitled to vote on a demutualisation resolution. Furthermore, the building societies are obliged to retain a record of the account holders whose moneys have been transferred to the dormant accounts fund, so that the societies can continue to note the existence of these account holders, and their rights, in the event of demutualisation. In effect, the holders of "dormant" accounts will be treated in the same manner, in these circumstances, as any other account holder.
Effectively, therefore, the dormant accounts notification procedures are completely independent of those operating in respect of building societies' demutualisation resolutions. Nevertheless, these procedures provide for a separate notification to holders of dormant share accounts, who may be entitled to vote on a demutualisation. Therefore, it would not be appropriate to introduce the obligation suggested by the Deputy under dormant accounts legislation when it is already addressed under building societies legislation.
As is the case with banks and building societies, Government savings products are treated as "dormant" if the customer has not carried out a transaction in respect of the product for at least 15 years. However, from the nature of these products, it is not possible to deal with them in exactly the same manner as bank and building society accounts, where it is normal practice to be able to debit or credit such accounts and thereby register a transaction. In effect, the only "transaction" that could be carried out on such a product, if it were to be captured on the An Post computer systems, is in the form of an encashment or partial encashment. Regular or frequent encashments are not a requirement since it suffices if one such transaction is carried out on one of the account holder's savings products.
While such a transaction will have the effect of re-setting the clock to zero for "dormancy" purposes, it should be noted that many of these products were issued with a fixed maturity date and specific terms in relation to the rollover or reinvestment of the moneys concerned. Therefore, the holder should ensure that the current terms relating to each such product are in accordance with his or her expectations. In any case, the holders will, at all times, be able to claim back any of their money that is transferred to the dormant accounts fund, together with any interest that was due on that money from the date of transfer by reference to the holder's original contract with An Post. In this way, the account holder will suffer no loss if the moneys from his-her savings products are transferred to the dormant accounts fund.
As regards whether it would be appropriate to oblige the institutions to publish the names of deceased holders of dormant accounts, an institution may have no knowledge of whether an account holder, with whom it may have had no dealings for 15 years or more, is alive or dead. To attempt to provide for publication of the names in such circumstances would raise major legal implications for the account holder's privacy rights on several fronts – the right under statute, for example, the Data Protection Act 1988, private law – on foot of the account holder's contract with the institution – and the Constitution, which guarantees the right to privacy. Therefore, considering that the Act provides for notification of the account holder and guarantees the right to reclaim all moneys transferred to the Fund it is my view that the legislation achieves the right balance in this regard.
