Dormant accounts survey

Money Box surveyed a number of banks and building societies about their dormant accounts and their answers are detailed below:

This survey was compiled in November and December 2003.

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• Abbey National
• Alliance & Leicester
• Barclays
• Bradford & Bingley
• Coventry
• Derbyshire Building Society
• Egg
• Halifax
• HSBC
• Lloyds TSB
• Nationwide
• Northern Rock
• Portman Building Society
• Royal Bank of Scotland
• Skipton Building Society
• West Bromwich Building Society
• Yorkshire Building Society

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  Abbey National

  1. What is your definition of a dormant account?

  We aim to follow, wherever possible, the BBA's 10 pledges from banks to customers on dormant accounts.

  Our aim is always to put the customer's needs and interests first, so we are currently reviewing our processes and identification of dormant accounts, bearing in mind the wide range of individual situations in which this can occur.

  2. How many dormant accounts do you have?

  Commercially sensitive information.

  3. How much money in total do you hold in dormant accounts?

  Commercially sensitive information.

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  Alliance and Leicester

  1. What is your definition of a dormant account?

  We apply the industry standard of three years. If an account has been inactive (i.e. no transactions have taken place) for three years we will write to the customer and ask them to contact us to discuss what they wish to do with their account.

  2. How many dormant accounts do you have?

  Unfortunately, we cannot disclose this figure as it is deemed commercially sensitive.

  3. How much money in total do you hold in dormant accounts?

  Unfortunately, we cannot disclose this figure as it is deemed commercially sensitive.

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  Barclays

  1. What is your definition of a dormant account?

  A dormant account is one where a personal customer has lost touch with his or her bank and has not used a bank account for a period of at least two consecutive years.

  This does not include Current, Youth, Student and Seven day deposit accounts, where they are considered dormant after one year.

  At all times the dormant account belongs to the customer and will continue to earn interest at the appropriate rate.

  Barclays was one of the first high street bank to proactively contact dormant account personal customers in 1998.

  If a customer has a query regarding dormant accounts they should contact the branch at which their account is held, although any branch of Barclays will be able to deal with a dormant account query or claim.

  2. How many dormant accounts do you have?

  3. How much money in total do you hold in dormant accounts?

  This information is not available for both Barclays and Woolwich.

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  Bradford and Bingley

  1. What is your definition of a dormant account?

  Bradford & Bingley's definition of a dormant account is when the principle balance is less than £100 and no transactions have taken place in at least three years or when the principle balance is less than £1,000 and no transactions have taken place in at least 5 years.

  2. How many dormant accounts do you have?

  Approximately 2% of the total number of our savings accounts are dormant accounts.

  3. How much money in total do you hold in dormant accounts?

  The value held in these dormant accounts is about 0.2% of the total value in all our savings accounts.

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  Coventry Building Society

  1. What is your definition of a dormant account?

  The society defines an account as dormant if the following two conditions are satisfied:

  (i) No transactions have taken place on the account for a period of ten years, and

  (ii) The account holder cannot be traced by reasonable enquiry

  This definition accords with our Rules and/or General Investment Conditions which also empower the Society to write off any dormant account satisfying the above two criteria, where the balance is no more than £10.

  The Society does not, however, utilise this power and consequently, all dormant accounts - even those with a balance below £10 - remain within our customer balances, earning interest, until they are claimed by their rightful owner.

  We send annual statements to our investors, summarising their savings accounts held with the Society.

  Inevitably, some correspondence is returned because the Society no longer holds a valid address, the customer having failed to notify us of their move.

  In these circumstances, we identify within our computer system any account where a valid address is missing (even those not falling within the "dormant" definition) to enable our staff to be on notice to request an updated address, should the investor transact or make contact with us. In this way, we attempt to ensure that we keep in touch with all of our members.

  2. How many dormant accounts do you have?

  3. How much money in total do you hold in dormant accounts?

  As indicated above, dormant accounts remain within our customer accounts. Accordingly, we do not have figures available for the number and value of dormant accounts.

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  Derbyshire Building Society

  What is your definition of a dormant account?

  Dormant account in our Society is best defined as an account less than £100 in it on which there have been no transactions (other than interest) for a lengthy period of time and where we have closed the account after giving written notice to the customer.

  Currently, this would apply where there has been no payment to or withdrawal from an account for at least 5 years.

  We maintain a record of the accounts closed and if we are able to resume contact with the customer at any time in the future, his or her account is reinstated with interest from the date of closure.

  We fully support the Building Society Association's Dormant Account Scheme which enables customers to trace funds in 'dormant accounts'.

  2. How many dormant accounts do you have?

  3. How much money in total do you hold in dormant accounts?

  As of 13 June 2003 we currently have 43,000 dormant accounts with total balances of £172,000.

  We have reinstated £19,000 to customers since 1993 in cases where we have been able to resume contact with the customer.

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  Egg

  1. What is your definition of a dormant account?

  We treat a savings account as dormant if:

• There have been no transactions (withdrawals or deposits) on the account, other than transactions initiated by us (such as interest and charges), for a period of five years, and
• We haven't heard from the customer during that time
• The customer has not responded to a letter asking if they still require the account and advising that the account will be treated as dormant if a reply is not received.

  If we do not receive a response from our dormancy letter, the account will be treated as dormant for as long as the customer does not use their account.

  This means that although the funds will continue to receive interest and will remain the customer's property, they will not receive statements or any other information about their account from us.

  If we do need to treat an account as dormant, the customer will still be able to access their money in the usual way.

  Our policy is in accordance with BBA guidelines.

  2. How many dormant accounts do you have?

  Commercially sensitive

  3. How much money in total do you hold in dormant accounts?

  Commercially sensitive

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  Halifax

  1. What is your definition of a dormant account?

  From 1994 onwards, in preparation for Halifax's conversion from a building society to a bank a major data cleaning operation took place.

  Unlike other organisations we do not have any accounts which are therefore classed as 'dormant'.

  If contact is lost with the customer, i.e., if mail is returned, the account carries on as normal (i.e. interest is still earned and account is still 'live') but no further letters are sent out.

  When the customer next uses a branch an up-to-date address is obtained and normal contact resumed.

  2. How many dormant accounts do you have?

  Not applicable

  3. How much money in total do you hold in dormant accounts?

  Not applicable

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  HSBC

  1. What is your definition of a dormant account?

  Accounts with balances between 1p and £100 - after 2 years without any customer transactions we will write to customers.

  We then give them 3 months to respond and advise what their intentions are. If there is no response we will close the account down and pass the balance to our Unclaimed Balances Account.

  Accounts with balances of £100+ - after 2 years without any customer transactions we will write to customers. We will not close these accounts without further instructions from customers.

  Reclaiming funds - Customers can at any point after closure request the payments of these funds, and we will send a response to requests within 30 days if possible and no later than 3 months from receipt.

  In some instances it may be difficult to trace the funds for customers (particularly accounts that have been closed for a numbers of years) and we ask that they provide us with the following information (where available) to enable us to find the funds as quickly as possible for them : 1. Account number 2. Date account opened 3. Date account last used 4. Approximate balance

  If the account was interest-bearing we will calculate any interest due and in the case of gross interest we have to make a submission to Tax Related Services (internal dept) before paying away the interest, as there may be a further tax liability for the customer.

  If accounts have been closed and customers require them to be re-opened we can do so, and we will follow standard ID & VA checks as for new to bank customers before re-opening .

  Of course our preference would be that if customers are changing their banking habits they let us know, as we may be able to assist them.

  We know that dormancy can be triggered by a number of life events, including separation, job change, marriage etc. and if our customers tell us what's happening then we can help them to find the right solution.

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  Lloyds TSB

  Lloyds TSB fully complies with the BBA's pledges on dormant accounts. That is, we write to customers who have not used their account(s) in the last 3 years and if they do not have any other active cheque or savings account.

  If we do not hear from the customer that they want to keep their account active, the account then becomes dormant but any balance on the account will, of course, continue to earn interest.

  Last month Lloyds TSB undertook a dormancy mailing exercise to all listed dormant account holders to remind them of the account.

  Dormant accounts always remain repayable in full, together with any interest due.

  The reason accounts are marked as dormant is to prevent fraudulent use of the accounts and to protect customer privacy. i.e. if an account is used again the bank can check it is by the customer. It also ensures that, for example, statements are not sent to an out of date address.

  Due to commercial sensitivities Lloyds TSB cannot reveal any figures regarding dormant accounts.

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  Nationwide

  1. What is your definition of a dormant account?

  For an account to be classed as dormant two criteria would have to be met:

  1. We have received notification that the account holder is no longer resident at that address and a forwarding or new address is not known. and 2. There have been no transactions on the account for at least two years.

  2. How many dormant accounts do you have? How much money in total do you hold in dormant accounts?

  Unfortunately this information is not in the public domain.

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  Northern Rock

  1. What is your definition of a dormant account?

  We do not disclose breakdown figures of accounts, but in the context of the BBA dormant account scheme, we do not consider that we have any dormant accounts as we treat all accounts as "live". No funds are "frozen" or "removed".

  Two other points impact upon the "live" status of our accounts.

• In common with other former building societies that converted in the late 1990s, our conversion exercise resulted in a massive data clean-up with savers themselves contributing to ensuring their accounts remained "live".

• Since 1998, we have also administered accounts in accordance with the Northern Rock Savings Pledge which promises to write individually and directly in advance to customers whenever we make changes to their accounts. In the case of rate reductions, we provide advance notification at least the same as the notice period on the account.

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  Portman Building Society

  1. What is your definition of a dormant account?

  Portman defines a dormant account as one where we have lost complete contact with the account holder i.e. communication we have sent to account holder has been returned addressee unknown, and we have received no forwarding address for that member.

  In addition to this we would look at when the last customer transaction was carried out on the account, this forming a picture of whether the account is being operated.

  As a savings institution, many of our members have put their funds away for some time without accessing them, this may well be for several years, which is why we cannot only rely on monitoring the transactions on the account but have to take into account the 'dialogue' we keep with the member.

  2/3. How many dormant accounts do you have? How much money in total do you hold in dormant accounts?

  We cannot disclose figures on how many accounts of this type the Society currently has.

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  Royal Bank of Scotland

  1. What is your definition of a dormant account?

  If a customer has not made any transactions on their account for 5 years, we will write to them and if we have not heard back in 3 months, will consider the account to be dormant.

  However, a customer can still claim their account and any interest will be calculated for the period of dormancy and applied to the account.

  2. How many dormant accounts do you have?

  For commercial reasons we do not reveal these figures.

  3. How much money in total do you hold in dormant accounts?

  For commercial reasons we do not reveal these figures.

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  Skipton Building Society

  1. What is your definition of a dormant account?

  For a Skipton Building Society investment account to be considered dormant, our definition is three-fold:

• The account must have a balance below £100
• The account must have had no transactions for 3 years
• The account must have an unknown address indicator on it (i.e. we have had mail returned and are unaware of that customer's current address)

  2. How many dormant accounts do you have?

  This figure is not available.

  3. How much money in total do you hold in dormant accounts?

  As of today, 26 November, the total balance held in dormant accounts is £40,060.35.

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  West Bromwich Building Society

  1. What is your definition of a dormant account?

  Balance below £100 where no transactions have been made in 5 years. If a customer contacts us with a dormant account, the account is reopened and the balance re-instated. We are registered as members of the BSA dormant account savings scheme.

  2. How many dormant accounts do you have?

  Approx 6,000

  3. How much money in total do you hold in dormant accounts?

  Approx £250,000

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  Yorkshire Building Society

  1. What is your definition of a dormant account?

  We treat an account as dormant when we have a No Trace 3 marker on the account (i.e. 3 items of correspondence have been returned indicating the customer is no longer at the address we hold for them) AND either there have been no transactions for 3 years where the balance is less than £100, or there have been no transactions for 5 years where the balance is £100 or more.

  2. How many dormant accounts do you have?

  Approximately 63,000 open accounts are currently flagged as dormant.

  3. How much money in total do you hold in dormant accounts?

  Total of the balances in these dormant account is £3.7m.