warning to all (re. Dormant Accounts)

I have a bond (for very long term savings)with standard life for 15 years and when I changed house 5 years ago I notified them of my new address.

Thy have just written to me at my NEW address saying
that because they have NOT heard from me in 15 years
my bond comes under the goverments dormant accounts.
I now have to return their letter with my signature and I will ask them to ring me to say they have received it.

This is outrageous by the government (smacks of soviet russia) and sloppy by standard life.
Is is possible that families lose out here?
c
0]

Title edited for clarity

Re: warning to all

Steady on there... Standard Life are just adhering to the letter of the law in this situation as outlined . Having your account reactivated and declassified as dormant shouldn't involve much hassle. The rationale for this legislation is that where accounts are truly dormant and are not going to be claimed at all then at least the state and not the financial institutions should benefit. Note that there is no time limit on claiming/reactivating otherwise dormant accounts.

its still outrageous

Its more of the nanny state. If I choose to let money sit in an account then it should be my business and between me and the financial institution that I chose to hold my money.
As long as its legit and due taxes are paid the gov should butt out.

Anyway, if I tell slife that I moved house then my file was updated within the 15 years.

Re: its still outrageous

Its more of the nanny state.

Fair enough - that's your opinion and you're entitled to it.

However note the stated rationale for the legislation:

The Dormant Accounts Act, 2001, which came into effect in April 2002, aims to reunite account holders or their next of kin with their dormant accounts in financial institutions in Ireland. A dormant account is an account to which money has not been added or removed since 31st March 1987 or earlier.

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... which could be interpreted as being in the consumer's interest while the following:

The surplus money held in this fund will be used to support projects aimed at easing poverty and social deprivation or providing services to people with disabilities and, in particular, helping primary school students with learning difficulties in Ireland.

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could be interpreted to be in the interests of the wider community/society at no expense to the individual (since there is no time limit on reclaiming/reactivating dormant accounts) while preventing the financial institutions from benefiting as I presume happened in the past.

Anyway, if I tell slife that I moved house then my file was updated within the

Yes - but the legislation deems accounts on which no transactions, as opposed to adminsitrative changes, were carried out over a 15 year period to be potentially dormant.

Do you think that the financial institutions should benefit from dormant accounts and, if not, how would you solve the issue other by legislation such as was enacted?

dormant accounts

Sorry, Clubman,

but I agree 100% with Cerberus on this one. The legislation is faulty in that it does not anticipate accounts of this nature - it smacks of incompetence on behalf of the legislators..

Secondly, Standard life surely has a duty to inform thier customers that this type of account is vulnerable to the legislation, and should give them ample time in which steps can be taken to prevent the account becoming dormant.

M

Re: dormant accounts

The legislation is faulty in that it does not anticipate accounts of this nature - it smacks of incompetence on behalf of the legislators..

But that's the point. It is specifically such long term policies that may involve a maximum of two transactions (the initial investment and the eventual encashment) that should be targeted since they are likely to be the ones that become dormant and, in the absence of legislation, benefit the financial institutions rather than the beneficial owners or, failing that, the wider community.

Again I ask - does anybody really believe that it is the financial institution and not the beneficial owner, the next of kin or, as a last resort and on a reversible basis, the wider community who should benefit from dormant accounts?

Secondly, Standard life surely has a duty to inform thier customers that this type of account is vulnerable to the legislation, and should give them ample time in which steps can be taken to prevent the account becoming dormant.

I agree. Perhaps the nub of the problem here is that, it seems, Standard Life should have warned the policy holder sooner? Note that at the time the dormant account legislation was introduced there was a high profile publicity campaign highlighting this and, if I recall correctly, some institutions also took out newspaper notices and/or wrote to affected customers. In addition [broken link removed] specify the responsibilities that financial institutions have to their customers in this regard:

What responsibilities are placed on institutions about dormant accounts?
<!--EZCODE LIST START--><ul><li>If the amount held is more than €100 then the institution must first contact the account holder explaining their rights and the institution's obligations under the Dormant Account Act. This does not apply if there is a standing instruction on the account not to issue any correspondence, or if the institution had previously been unable to contact the account holder.</li><li>Institutions are obliged to publish a notice in two national newspapers in October each year about the transfer of funds under the Act. These notices should also be displayed in public branches of the credit institutions.</li><li>Details of accounts designated as dormant are kept at the institution so they can pay out any funds claimed back at a later time.</li></ul><!--EZCODE LIST END-->

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If cerberus thinks that Standard Life didn't act appropriately then s/he should write to them and/or take it up with [broken link removed]. Other than that simply complaining about the legislation isn't going to do any good in my opinion.

dormant accounts

I have just re-read the original post, and I originally mis-interpreted it to state that the account was a 15 year bond. In which case, your reply to my first point is valid.

M

slife

Got a letter apologising from slife noting that they did have written communication from me re change of address.

Still its my money and if i choose to leave it in a financial institution then that should be my right and not have it scooped up by a government that has mismanaged the greatest boom ever in Ireland.

And i'm not saying FG and Pink Champagene Pat would have done any better.

C

Re: slife

The legislation is so well written that it is based on the 'account' and not the 'customer' relationship. There were even more amendments when the Life part was brought in afterwards.

And you see the powers of the Inspectors!

My son received a letter from First Active recently saying that his account was dormant and requested that he fill in a form and return it to them stating that he either wanted the account to remain open, that he wanted the account closed and a cheque issued or that he wanted the balance transferred to a bank.
He rang them and asked them to keep it open. They refused.
They said that unless he filled out their form and returned it then his account would be closed.
Why would they not accept his phone call to keep the account open?

SlurrySlump said:

Why would they not accept his phone call to keep the account open?

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It's probably a legislative issue that they need this in writing.

ClubMan said:

It's probably a legislative issue that they need this in writing.

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Or if it's Bank Of Ireland, they want it in writing, proof of who you are (certified passport or driving licence) and proof of address. A right royal pita!!!

Isn't that the case with other financial institutions especially if the account was opened before the current money laundering id legislation was in force so that they now have to collect the necessary id details?

Re: Dormant Accounts

Does anyone know if interest added to an account by a bank qualifies as a transaction to prevent an account becomming dormant, or must it be a transaction by the account holder.

Also, if an account has become dormant and is later reactivated, does it lose all interest for the time during which it was dormant.

Re: Dormant Accounts

frph said:

Does anyone know if interest added to an account by a bank qualifies as a transaction to prevent an account becomming dormant, or must it be a transaction by the account holder.

Also, if an account has become dormant and is later reactivated, does it lose all interest for the time during which it was dormant.

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I would suggest that you make a lodgement of €1 to the account to keep the account current. I would imagine that interest credited is not counted as a transaction. From my banking days I remember that interest is still accruing while the account is dormant. I remember having to do the calculation manually long before computers came on the scene.

Thank you SlurrySlump. It's great to have that information. Much appreciated.

Yes, the system works very well.

A relative was caught by it. Standard Life had made her unit linked fund dormant. When she reactivated it, they calculated the prices as they would have been, had it not been declared dormant. She didn't lose out apart from the paperwork to reactivate it.


Brendan

It's good to know that interest is still being gained even if the account is dormant.

I was actually really thinking of an An Post savings certificate where money can't be added to keep it from being dormant. But there is no problem once the interest is still being gained.

Again, thanks for the replies.

Brendan said:

Standard Life had made her unit linked fund dormant. When she reactivated it, they calculated the prices as they would have been, had it not been declared dormant. She didn't lose out apart from the paperwork to reactivate it.


Brendan

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Its good to hear that dormant "cash" taken from a mutual fund does not lose the return the investor choose to expose it to when the government confiscates it.
So if a fund (could be thousands or millions) was suposed to be earning 10 to 20% Per Annum for example (inside the fund it was confiscated from) while it was taken by the government, who pays the money which should have been earnt if the owner or heirs make an appearance years later ? I dont think the government should be playing the stock market.

I opened a BOI savings account as a Birthday present for a nephew 16 years ago. I recently tried to close it (since he never used it and could now do with the €15 to buy cider or something) but BOI tell me its now dormant and we must BOTH present ourselves in person at the branch to reactivite it. Hardly seems worth the hastle.