This piece first appeared in Saga Magazine in November 1997
The text here may not be identical to the published text

Banking on Indifference


Forgotten money in banks and building societies

I often start my pieces in Saga Magazine by saying there is a large amount of money waiting to be claimed by you. But this month the amount staggers even me. The market research company Mintel estimates in a recent report that there is £41 billion - that's £41,000,000,000 or £732 for every person in the UK - sitting unclaimed in forgotten and abandoned bank accounts. And my research indicates that banks and building societies are not doing very much to make sure that this money is returned to its rightful owners.

So how does so much money come to be forgotten? There are two main ways.


Typical of the smaller amounts lost is the money forgotten by Iris, a Saga reader from Avon.

"In 1947 when my husband and married he had a small amount of money from his naval gratuity in an account with what was then the District Bank in Bournemouth. Due to several moves and changes of jobs in later years the account was never closed or used again. I do know that the figure in there is £7 at a time when he was earning £5 a week."

And that £7 should have been earning interest all those years. Even at 3.5 per cent per year it would be worth £262 now, a sum Iris, who is now a widow, would find very useful. She knew the name the account was under, the branch where it was lodged, she even discovered that the District Bank was now owned by the mighty NatWest. So off she went to her local branch to make enquiries. That was two years ago and she still does not have her money.

"I went into my local bank and saw a gentleman there and he was vague, and said he couldn't do anything because I hadn't got an account number. He said he didn't think I'd have any chance. He said I could write to head office but I thought it wasn't worth it. I felt he was putting people off."

So Iris did nothing and the money - her money - still languishes somewhere in the NatWest accounts. Last year the bank's profit was £1122 million. NatWest says that Iris should have been treated differently. A spokeswoman told Saga Magazine

"It is very rare that we get an enquiry about an account that went dormant before 1970. With an account this old it's possible but it's not definite that we'd have anything. Normally people have a statement and go into the branch and it can be dealt with. If the branch can't help we do have a separate department that does the tracing computer or manually."

Other High Street banks were equally vague. Lloyds/TSB said

"They need as much information as possible, the more the better, ideally an account number or an old pass book but whatever they can give us, name, address, branch and so on. We have files, we have a whole load of things, not easy to search manually no but we have a department that has experts on tracing accounts."

Barclays is proposing to set up a central register for dormant accounts which may open in 1998. But meanwhile a spokeswoman said

"If they know the account number that's wonderful. Otherwise name, and which branch. Otherwise it will take longer to trace it. Staff will have to go back through the old records, mostly they are manual."

Stuart Cliffe is the director of the National Association of Bank Customers which deals with a lot of queries about dormant accounts. He says Iris's experience is more typical than the emollient explanations of the banks' public relations departments.

"The immediate reaction of the high street banks is 'give us the account number and we'll tell you whether that account still exists or not'. But the account number is clearly the piece of information that most people don't have. People are generating dormant accounts because they die and accounts are hidden, personal and they don't mention them in their will. It's often the nest-egg no-one knows exists and therefore the banks keep interest free loans from customers. No-one knows how much there is but I'm sure it puts lottery winners into the shade."

The banks deny that the figure is anything like £41 billion. The trouble is they refuse to give any alternative figure. Some say they simply do not know how much there is or how many accounts have lain dormant for decades. Others say they do know at least part of the answer but they will not tell us. The British Banker's Association, which is the trade body for the banks, will not give a figure publicly either. Brian Capon is its spokesman.

"I haven't got a figure to challenge it but I do honestly think that figure was using dormant in the widest possible definition. To a bank 'dormant' is all contact lost with a customer. And that doesn't mean that the bank takes that money into its own coffers. It is always a liability. We're at the moment talking to the banks to try to get an indication of the extent of what is around. A lot of them are very small amounts. Some go back before computers so those records are kept manually."

How different things are in the United States of America. Every state there has a legal definition of a dormant account - normally between three and five years when there has been no activity on the account and letters to the last known address produce no response. Once that period is passed the bank has to hand the money and all the details of the account over to the state authorities who then take on the legal responsibility of trying to find the owners. And far from waiting for people to come to them, they go out and look. They advertise in the local papers listing the names of past owners of dormant accounts, they take a laptop computer with the entire list on it to shopping malls. Some of them now have sites on the internet, where anyone can do a full search at their local library or even from home or work. One of the smallest states is Rhode Island. Despite that, last year it collected more than $10 million and paid out nearly $4 million to owners and their relatives and heirs.

Nancy A Meyer, General Treasurer of Rhode Island, says

"In 1996, we were able to give more than 5,300 people a pleasant surprise -- we returned more than $3.8 million in money and property that they had lost to them! That is a significant increase from the nearly $2.8 million that we returned to more than 4,800 people the year before."

And her deputy Richard Coffey put their mission very succinctly

"That's our job - to give away money - actually to give people back money that's theirs."

Sadly, no such law seems on the horizon in the UK. Brian Capon commented

"There are fors and againsts It's one a way of doing it but look at it from the other point of view. If you went abroad for five years and then saw details of your account and your name and whatever bank it was on a public list I don't think you'd be too pleased."

And he pointed out that under current legislation the banks could not hand over money or release details of individual accounts to a central state body. But the Association of Bank Customers thinks that is easy to overcome and is proposing the American system is introduced here.

"We will suggest to the Treasury that the law should be changed to centralise it for the future and a phased programme of putting the old accounts into it. The interest earned would be enough to set it up."

Meanwhile if you think you or a relative has money in a forgotten bank account there are five steps you can take.


And if you have a problem with a dormant bank account please write to me at Saga Magazine.


November 1997


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