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Information about Dormant Bank Accounts in the UK

Published by admin on December 16, 2009

Information about Dormant Bank Accounts in the UK

Banking experts estimate that up to £ 5 billion is sitting unclaimed in UK bank accounts that have gone “sleeping”. What does this mean, and you could be entitled to a share of this enormous amount of idle money?

A bank account goes dormant when, in the words of the British Bankers ‘Association, a bank and a customer’ lose touch with each other’. What this rule means in practice is that the customer either died or moved house, and the bank haven’t been told and are unable to locate the account holder any time later.

If there are no transactions in an account in a period of about 12 months, the bank will write to the account holder at the last known address to ask them if they want to keep the account open. If no reply is received, then the bank will change the status of the account to ’sleeper’. This means that from now on, no statements, cheque books or other correspondence will be sent out to the customer.

The money in the account will still earn interest on what the normal rate on the account and the bank will still keep track of your account balance and record the last known address.

There are two main reasons for an account to be dormant. The first and most obvious is to save the money, the administrative costs of issuing statements and the like, when there is activity on the account from month to month (apart from that taken by the bank itself, such as interest payments).

The more important reason is to guard against identity theft. If a bank continues to send statements to an address when the account holder is no longer there to receive them, it is all too easy for these documents to end up in the hands of fraudsters who use the sensitive information they contain to begin a campaign for ID theft.

Most dormant accounts will have very small balances, but some will inevitably contain a significant amount, often those belonging to a person who has passed away. If you think you may be entitled to money held in a dormant account, you can make a claim by completing a form available from the bank.

You’ll have to give your reasons for making a claim such as that the account belonged to a close relative whose estate was passed on to you. You will also need to prove your identity and your connection to the original account holder if applicable.

If the bank don’t agree that you’re entitled to take over the account you have the right to pursue an appeal in which your claim is reviewed. If the appeal fails, you can take your claim to an independent expert in settling complaints between consumers and businesses, whose decision is final and binding.

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