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Consultation on dormant bank accounts launched
The Government today launched a consultation document on secondary legislation to establish a UK dormant accounts scheme. Subject to responses, the Government will introduce the secondary legislation in Parliament later this year.
Many people forget about, or lose track of, small deposits of money in bank and building society accounts. Despite the efforts of banks and building societies to reunite these funds with their owners, they build up as unclaimed assets in the banking system.
The consultation document sets out draft secondary legislation to extend the scope of the Financial Services Authority's regulation to include dormant accounts reclaim funds. It also places a requirement on building societies participating in the scheme for smaller institutions to publicly disclose information in line with the requirements placed on smaller banks by the Act.
Ian Pearson, Economic Secretary to the Treasury said:
"The Government is committed to carefully investing this unclaimed money back into society, while making sure that people can retrieve money they may have forgotten that they had. I want to welcome this consultation as a step towards delivering a scheme that is fair for bank account holders while benefiting good causes right across the UK."
Notes for Editors
1. As announced in the 2005 Pre-Budget Report (PBR), the Government has been working with the banking industry to design a scheme to allow money in dormant accounts otherwise known as 'unclaimed assets' to be reinvested in society.
2. Following preparatory work with industry, the Government issued, in 2007, two consultation documents on a proposed scheme. The first, A UK Unclaimed Asset Scheme: a consultation was published in March 2007 and set out proposals for the operation of the scheme. A second consultation, Unclaimed Assets Distribution Mechanism: a consultation was published in May 2007 and set out the Government's proposed principles for the distribution of available money in England, Scotland, Wales and Northern Ireland.
3. This consultation document follows the successful passage of the Dormant Bank and Building Society Accounts Act 2008, which received Royal Assent on 26 November 2008.
4. The Act enables banks and building societies to transfer dormant accounts to a central reclaim fund for distribution to the benefit of the community, while ensuring that the right of account holders to reclaim their money is protected.
5. In the March 2007, consultation paper, the industry committed to participate in the scheme and to take the lead in selecting or setting up a reclaim fund.
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