Old accounts systematically being 'lost' by banks? (dormant passbook accounts)

Rab125

In the case of my mother's account there was about an 8 year period between the last available statement letter and my contacting the takeover bank, a fallout from the 2008 financial meltdown so not a particularly long time ago. My friend's father's account was c20 years old though again not absolutely ancient. Sadly once the ombudsman process is completed, which included an appeal, court action is the only option but legal advice was that it was likely to be expensive and at very best a 50/50 chance of success. To pay the legal costs myself was not an option so I had to drop the case.

eskbanker

Rab125 said:

legal advice was that it was likely to be expensive and at very best a 50/50 chance of success

That goes back to my point about having a compelling case - if it's only seen as 50/50 by lawyers who've reviewed the evidence then that would suggest that there isn't a particularly convincing case being made that the bank still held the money?  What was the rationale behind their conclusion?

Perhaps worth bearing in mind that under the dormant accounts scheme, accounts left dormant for 15 years are transferred to the control of a body set up to manage those funds for good causes (while protecting the rights of the holder), so there is clearly an expectation that data about open but dormant accounts is kept by the banks for at least 15 years....

bowlhead99

Rab125 said:

In the case of my friend his father's passbook had a deposit made the day before his father was rushed to hospital. The son worked with his dad and his father had left work saying he was going to the bank just before closing time. His father was in hospital before the bank opened the next day and sadly died without ever leaving hospital. Again the ombudsman took the view (this was a takeover scenario as well) that as there was no record of the account it must have ben closed. 

In the case of my mother's account there was about an 8 year period between the last available statement letter and my contacting the takeover bank, a fallout from the 2008 financial meltdown so not a particularly long time ago. My friend's father's account was c20 years old though again not absolutely ancient.

I suppose the lesson to be learned by readers from your friend's experience is that if you remember that the last thing your father ever did in the outside world before being terminally hospitalised was to take a trip to the bank, make sure you pipe up with that information at the time you or the executors are going through your father's estate reviewing all his assets and liabilities... rather than at some point in the next twenty years after the bank has been taken over by someone else, find a passbook which causes you to remember to try to hunt down the money.

Bank systems are probably not 100% infallible though any migration of accounts on a system change or takeover can be expected to have safeguards to make sure things don't go missing, especially if there are recent transactions in the accounts. It seems a bit far fetched to suggest that there is some great conspiracy where banks snaffle dead people's money, given the well-established procedures for dealing with dormant accounts. The old adage about don't attribute to malice what can be better explained by incompetence, is well founded IMHO.