Dormant accounts compulsion call

The Treasury wants good causes to benefit from unclaimed cash

Banks should be forced to use money in dormant accounts for good causes, the Treasury Select Committee has said.

The scheme to use so-called unclaimed assets for good causes was first proposed by the government in 2005.

Analysts say there is about £400m lying in bank accounts which have seen no activity in many years.

But committee chairman John McFall said that if the scheme was voluntary then it would not work and that "banks should be compelled to participate".

Youth benefit

In March the government fleshed-out its plans to divert unclaimed assets into good causes.

The Treasury said cash from bank and building society accounts which had seen no activity for 15 years would be transferred to a central fund.

Recently, Prime Minister Gordon Brown said this cash should be used to fund youth projects.

We are already making significant efforts to reunite customers with funds in dormant accounts Angela Knight British Bankers' Association

The committee also called for money lying dormant in National Savings & Investments (NS&I) accounts to be ploughed into the central fund.

And accounts should be considered dormant after just 10 years rather than the 15 years currently planned, it added.

Such moves could add more than £1bn into the central fund for distribution to youth projects, the committee added.

However, it said it should be easier for people with money in dormant accounts to claim their cash before it is diverted into any central fund.

In response, the British Bankers' Association (BBA) said its members welcomed the government's plans for unclaimed assets and that banks were already making efforts to reunite customers with their cash.

"Our members are fully committed to working closely with the government to make the unclaimed assets scheme a success," Angela Knight, chief executive of the BBA said.

"As the committee acknowledges, we are already making significant efforts to reunite customers with funds in dormant accounts," Ms Knight added.