Julian Ryall reports for the South China Morning Post, Jan. 21, 2014, that the Japanese government, saddled with a public debt that is running at 214% of GDP, is planning to raid dormant private bank accounts to boost its bottom line.
The ruling Liberal Democratic Party and its main ally in government, New Komeito, are planning to submit a bill to allow the government to access bank accounts that have not been touched for 10 years or more. The funds, expected to be about 50 billion yen ($488.65 million) each year, would be transferred to the government-run Deposit Insurance Corporation of Japan and used for welfare and education projects.
Ryall says “The bill is likely to sail through the legislative process with the backing of the opposition as a similar suggestion was put forward by the equally desperate Democratic Party of Japan when it was in power.”
News.com.au reports, Feb. 26, 2013, that Australian households face losing up to $109 million from their family savings as the Federal government moves to seize cash from inactive bank accounts.
Legislation was rushed through parliament authorizing the government, beginning May 31, 2013, to transfer all money from accounts that have not been used for three years into the government’s own revenues. Previously, the rule was seven years.
This means that accounts with anything from $1 upwards that have not had any deposit or withdrawals in the past three years will be transferred to the Australian Securities and Investment Commission. The law is forecast to raise $109 million in 2013 as inactive accounts for three years or more are raided by Treasury.
Elysse Morgan reports for ABCNews that the banking industry believes the Government’s changes to inactive bank accounts legislation is just revenue raising. Australian Bankers Association chief executive Steven Munchenburg says many accounts will be affected: “If you’ve put some money away to save for the future and you’re not adding any more deposits to that, and if you’ve got trust accounts where money is being held for some reason in the future, if you’ve got bond money for example where you’re a landlord and the tenant’s bond money is sitting in an account for more than three years, any of those sorts of those accounts, and the banks are obliged to move the money to the Government.”
Money seized by the government can be reclaimed through the Australian Securities and Investments Commission (ASIC).
By August 2013, the Sydney Morning Herald reports that the Australian government has collected more than $400 million in unclaimed money from inactive bank accounts in 2013. $85 million is money owned by account holders living or working overseas.
Gary Parkinson reports for The Independent that as early as in December 2005, then-Chancellor Gordon Brown ruled that cash in accounts untouched for at least 15 years could no longer be left in the hands of the banks. Hundreds of millions of pounds are to be withdrawn from dormant bank accounts and returned to their rightful owners or given to worthy causes in deprived areas.
But, as reported by Mark King for The Guardian, Brown was forced to back down after critics warned there would be administrative chaos and questioned whether the government had the legal right to seize the funds. Brown raised the idea again in 2007 and in 2008 the Dormant Bank and Building Society Act was passed, giving the government the right to collect and distribute unclaimed money from dormant accounts after 15 years. However, the Act does allow for owners of seized accounts to reclaim their money.
Robert Hutton reports for Bloomberg, July 19, 2010, that the British Bankers’ Association, a lobby group, estimates that about 400 million pounds ($610 million) was unclaimed in bank accounts. The government will set up a fund to be administered by Co-operative Financial Services that will hand over money to Prime Minister David Cameron’s Big Society Bank by the end of this year to fund “community projects.”
UNITED STATES OF AMERICA
Robert Morello writes for The Nest that each state has its own set of rules regarding the seizure of dormant funds from banks and financial institutions. If a bank has tried and failed to contact an account-holder over the required period of time due to her relocation, death or other circumstance, the bank must then turn over the funds to the state government, where it will enter the treasury. The state can then legally use the money as part of the annual budget, but must be returned to the rightful owner if she puts in a claim for it. A final standard warning is issued to the customer one month prior to the state seizure. If no response is received by the deadline, the funds are taken. The same laws apply to safe deposit boxes, stocks, rent deposits, insurance claims, uncashed checks and even retail gift cards.
To locate any funds that may have been seized due to extended dormancy, visit the website of your local state comptroller. Many states have online search options that require only your first and last name to discover what monies you may have neglected to collect over the years. Some states prefer to let an outside agency handle the details, but in either case you will be directed to the right place for performing a search. Once you’ve found unclaimed assets that belong to you, a claim can be made electronically or by mail.
The amount of time that makes an account “dormant” varies from state to state. But in the state of Georgia, for example, demand deposit accounts are deemed to be dormant after only 12 months without activity!
Contributed by Consortium of Defense Analysts.