Calls for dormant accounts to help good causes

The Treasury Select Committee has said that banks should be forced to use money in dormant accounts for good causes.

The scheme to use so-called unclaimed assets for good causes was first proposed by the government in 2005. Best estimates reckon that about £400 million is lying around in bank accounts which haven't seen any activity in many years.

In March this year the government fleshed-out its plans to divert unclaimed assets into good causes - the Treasury saying that cash from bank and building society accounts which had seen no activity for 15 years would be transferred to a central fund.

The TSC meanwhile has also called for money lying dormant in National Savings & Investments NS&I accounts to be ploughed into the central fund.

It also added that accounts should now be regarded as dormant after 10 years of inactivity, rather than the 15 years planned by the Government. The reasoning behind this is simple enough, given the measure would raise £1 billion.

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.

The British Bankers Association in response indicated it was in broad agreement. Chief Executive Angela Knight said "Our members are fully committed to working closely with the Government to make the unclaimed assets scheme a success. It will be for the Government to ensure the money makes a positive difference in the community.

"As the committee acknowledges, we are already making significant efforts to reunite customers with funds in dormant accounts. We have boosted our campaign in the run-up to the unclaimed assets scheme, leading to a 30-fold increase in claims through the BBA.

"We agree with the need to make it simple for customers to claim. The BBAs central re-claim team is now handling 400 claims a day, often helping claimants who do not know which bank holds their funds."

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2007-08-07 10:06:42 © Moneyextra.com