Dormant accounts

steady__eddie

In 2007 I opened an open ended Regular Savers account with a respectable U.K. based financial institution, £85k F.S.C.S. guarantee (as it now is) and all that. Every month since its inception, a standing order has been made, the last one being in December 2011.
During the Christmas break, I was performing my annual review and noticed that the account was approaching tha maximum amount that was allowed and the forthcoming interest would just about tip it over into the no interest payable on sums over £xxxx zone. Seeing has how I considered the interest rate to be lacklustre by todays standards, I decided to close the account and think about how I could help U.K. p.l.c. spend its way out of recession, a new motor perhaps ?
I sent my passbook to them with written instructions to close the account. Early in January, I received a letter which stated, "As your account has not been used since 2007 it is now dormant". They go on to say that they are therefore required to obtain new i.d. from me under guidelines set by the F.S.A.
I emailed them (too mean to buy a stamp) saying that the account had been used 56 times since 2007 in order to make a monthly deposit and the yearly interest statements which they send me can sustantiate this claim.
Today, I receieved a response, "All customers who we do not have contact with for 36 months are asked to provide identification when they request a withdrawl from the account". "We consider contact to be personnal contact rather than a deposit from a bank account".
Curiously enough, they wrote to me in November outlining the faster payments to take effect from 01/01/12. From the fraud p.o.v., I surmise that it would not take a rocket scientist to check that the account where the closing balance was being sent to was identical in every aspect to that where 56 payments into the account had previously emanated from ?
Incidentally, I also have an esaver instant access account with the same institution which I obviously opened online. I presume, using the same criteria, that this account will also self destruct within the 3 year guideline set by the F.S.A. ?
Nowhere in the General Terms and Conditions issued by the institution is any reference made to this three year (or indeed any) account dormancy guideline.
I am loathed to send my i.d. docs through the post for obvious reasons and currently do not have the time to arrange for signed photocopies to be despatched. A personnal visit to a branch would involve a 250 mile round trip which would eat into last years paltry interest payment.
My knowledge of account dormancy legislation is, to put it mildly, limited and even more so since I googled it but I was under the opinion (probably mistaken), that it was bought about by account inactivity, not customer contact.
Thank you for reading this far and if anyone could offer any advise, I would be obliged.

Mikeyorks

If the 'contact within 36 months' is in the T&Cs - you're a bit stuck and will need to provide the ID.

But the account certainly isn't 'dormant' as regards to the 2008 legislation which (HMRC extract) provides :

An account is dormant at a particular time if:

• it has been open throughout a period of at least 15 years
• during that period, no transactions have been carried out in relation to the account by, or on the instructions of the holder of the account

If nothing in the T&Cs - turn it into a formal complaint?

Ark_Welder

Perhaps point them in the direction of the Dormant Bank and Building Society Accounts Act 2008, Section 10

10 “Dormant”

(1)An account is “dormant” at a particular time if—

(a)the account has been open throughout the period of 15 years ending at that time, but
(b)during that period no transactions have been carried out in relation to the account by or on the instructions of the holder of the account.

Ask them to pay interest until the date that the funds are returned to you.

Ask them to send a cheque to the address on their records - assuming that you haven't moved - rather than electronic transfer. I've had similar 'issues' with some organisations that will send a cheque, but not do a transfer even though they have already been paying out to the relevant account, and over a period of a number of years.

Ask them when they tried to contact you to let you know that the account was becoming 'dormant', and why they continued to accept payments into it if it had become 'dormant'.

In all, sounds like another organisation that wants to hold on to your cash for the longest possible amount of time.

[Edit]

...and ask them why they can't perform an electronic identity check - the kind that they would probably do when an account is being opened.

innovate

Complain formally- - - use the company's complaint procedure, or go straight right to the top of the organisation (CEO) because it seems this company are taking the proverbial. A bit of googling, and perhaps trial and error, quickly finds the email addy of the CEO, or you might get lucky here.

The CEO of that company, in line with general trends, probably took a 30-40% salary increase, so you may as well make him do something for the extra money he got paid.

dzug1

I do know that a lot of financial companies are undertaking the exercise of bringing their customer ID checks up to date - ie making sure that their records meet current standards rather than those when the account was opened. They tend to be willing to continue to allow receipts into the account but as soon as a withdrawal is required will insist on the update.

So maybe this has happened to you - the references to 'dormant account' are rather misleading though and rather a clumsy way of explaining it.

They will say that money laundering regulations require them to do it - which is at least half true.

Sammie2012

steady__eddie wrote: »

In 2007 I opened an open ended Regular Savers account with a respectable U.K. based financial institution, £85k F.S.C.S. guarantee (as it now is) and all that. Every month since its inception, a standing order has been made, the last one being in December 2011.
During the Christmas break, I was performing my annual review and noticed that the account was approaching tha maximum amount that was allowed and the forthcoming interest would just about tip it over into the no interest payable on sums over £xxxx zone. Seeing has how I considered the interest rate to be lacklustre by todays standards, I decided to close the account and think about how I could help U.K. p.l.c. spend its way out of recession, a new motor perhaps ?
I sent my passbook to them with written instructions to close the account. Early in January, I received a letter which stated, "As your account has not been used since 2007 it is now dormant". They go on to say that they are therefore required to obtain new i.d. from me under guidelines set by the F.S.A.
I emailed them (too mean to buy a stamp) saying that the account had been used 56 times since 2007 in order to make a monthly deposit and the yearly interest statements which they send me can sustantiate this claim.
Today, I receieved a response, "All customers who we do not have contact with for 36 months are asked to provide identification when they request a withdrawl from the account". "We consider contact to be personnal contact rather than a deposit from a bank account".
Curiously enough, they wrote to me in November outlining the faster payments to take effect from 01/01/12. From the fraud p.o.v., I surmise that it would not take a rocket scientist to check that the account where the closing balance was being sent to was identical in every aspect to that where 56 payments into the account had previously emanated from ?
Incidentally, I also have an esaver instant access account with the same institution which I obviously opened online. I presume, using the same criteria, that this account will also self destruct within the 3 year guideline set by the F.S.A. ?
Nowhere in the General Terms and Conditions issued by the institution is any reference made to this three year (or indeed any) account dormancy guideline.
I am loathed to send my i.d. docs through the post for obvious reasons and currently do not have the time to arrange for signed photocopies to be despatched. A personnal visit to a branch would involve a 250 mile round trip which would eat into last years paltry interest payment.
My knowledge of account dormancy legislation is, to put it mildly, limited and even more so since I googled it but I was under the opinion (probably mistaken), that it was bought about by account inactivity, not customer contact.
Thank you for reading this far and if anyone could offer any advise, I would be obliged.

I guess they are using "dormancy" as an excuse so they don't have to go into detail. Depending on the size of the withdrawal they might want ID to cover their ///// as you havent debited before its out of the ordinary so may just be following anti fraud procedures. Surely they are just checking it's you so they don't get in trouble for giving it to someone trying their luck.

steady__eddie

Thank you all for your responses.

"If the 'contact within 36 months' is in the T&Cs - you're a bit stuck and will need to provide the ID."

Insomnia may have come to my aid here, (see time of posting), after a trawl through their website I came across this, "An account becomes dormant if you have not withdrawn or deposited any funds in the last 3 years. We will ask you for personal identification when you re-activate a dormant account". Clearly I have not withdrawn in the time frame mentioned but I jolly well have deposited.

"Ask them when they tried to contact you to let you know that the account was becoming 'dormant', and why they continued to accept payments into it if it had become 'dormant'."

An interesting comment and one which I will incorporate into my response to them together with the request for interest to be paid until the funds are returned to me.

"Complain formally- - - use the company's complaint procedure, or go straight right to the top of the organisation (CEO)".

Last year, I discovered an error in the organisations published accounts which understated the figures by a factor of 1000. It was a typo error at the printers or someone simply hadn't proof read read it before churning out several thousand copies. I pointed this out in an email to the man in the suit at the top so I already have the appropriate email address. It did cross my mind that they may be extracting revenge.

"the references to 'dormant account' are rather misleading"

To my mind it is their definition of dormant account and not the "industry accepted" definition.

"Depending on the size of the withdrawal they might want ID to cover their ///// as you havent debited before its out of the ordinary so may just be following anti fraud procedures. Surely they are just checking it's you so they don't get in trouble for giving it to someone trying their luck."

I appreciate what you are saying but someone who has returned the passbook and wants the funds returned whence they originated ? Perhaps I may be too naive in these scamming times.

I shall now go and make yet another cup of tea and compose what I consider to be a suitable response to their email. Once again thanks for your replies. (I did click all of the thanks buttons but some are not showing) :mad:

steady__eddie

Update, thanks to the combined knowledge of you peeps out there the situation has now been satisfactorily resolved (well almost).
I received confirmation in a communique today which interestingly contained the following, " the Dormant Bank and Building Society Act 2008 is not the same as our definition of transaction dormant (which is a money laundering check). We agree that standing orders will now be accepted and that clarification will be provided in our literature going forward. The ID on your esaver will be accepted"
The only fly in the ointment is that they've posted me a cheque today, I could have lived with one of these new fangled Faster Payment thingys. Oh well, savers can't be choosers.