Banks warn Government set to take inactive accounts

[Ves]

That's not as I heard it discussed by Steve Munchenberg of the Australian Bankers' Assn. He suggested the government have made this decision entirely without discussing it with the ABA. He further suggested the banks should first be given the right to contact their clients before ASIC move in on the money. I'm a bit puzzled as to why he would say this (today) if what you say above is correct.

Can you please quote me the legislation that is preventing the banks from contacting clients who have inactive accounts well before the three years is up? If you're trying to make some other point I'm not really following it. But they do indeed have the first right - they can contact a client whenever they want.

In fact - a little bit of research on inactive or dormant accounts on at least one of the majors websites tonight shows me that they indeed do do this.

Ves, I think you are perhaps rather missing the point. The arrangement is between the bank and the client.

It is actually with the government too - since they are guaranteeing deposits under $250k (the limit last time I checked).

If mutually they are agreed that it's fine to have the a/c sit there unused for up to seven years, at which stage the bank will contact the client, why on earth should the government have the right to interfere in such a private arrangement?

An arrangement that takes two minutes once every three (currently seven years) to avoid falling out of? You're kidding me - I would have thought something like this encourages people to look after their money closely and I cannot believe that you are against this very principle.

If you don't think it's in order to boost the government's bottom line in this election year or projected to next year, you are possibly being less than realistic imo.

It doesn't even make up 1% of the projected $15 billion surplus. That's drawing a pretty long straw, I would have thought. How dare they amend legislation that already exists! I ask again - and I don't know the answer to this - who bought the legislation in and why didn't anyone care until now? Seems awfully convenient of the media to widely critique a law change that is otherwise meaningless and obnoxious and only affects a small portion of society who most likely (except in some excusable cases) don't look after their bank accounts any way.

I thought the lostsuper search facility was a great idea myself - and I don't see why this cannot act in the same way. I have heard plenty of clients find lost super using it. I would consider a bank account that has not been touched for seven years lost.

Why should the individual be obliged to engage in some lengthy bureaucratic process to get their own money?????

Why would you leave your money there for that period of time in the first place? It's a three to six month wait - I would hardly consider that lengthy and unreasonable for the amounts of money we are talking about in the average inactive account! Considering it takes very little time to avoid it in the first place.

I'm sure my post will come off as rude to most people - but I believe that this is a massive storm in a teacup media headline grab that is easily avoided by most people.

 

[pixel]

The Unknown is how many of those dormant accounts belong to "late" people, whose descendants have no idea what the dear departed had, and where it was "hidden". Yes, some bereft may be so dirt-poor that they lack the wherewithal to even try and locate such unknown accounts. But I reckon there is another stash that's far bigger in absolute terms.
I would suspect that the Gov'mint has a fair idea about many people having "multiple identities" that even their next of kin don't know about - maybe for valid reason. So, if the owner dies in a bike "accident" or from lead poisoning, chances are that even a bank letter to the alias won't help.

 

[bellenuit]

This will obviously be a controversial comment, but for small amounts (say <$100) in accounts that have remained inactive for several years, if anyone is entitled to lay claim to the money other than the account owner or those willed the money in the event of the account owner's death, then it should be the banks themselves. They are the ones who have kept safe custody of the money, have kept all the records regarding ownership, have provided statements either online or by mail to the customer using the contact details last provided by the customer and, if an interest earning account, paid interest to the owner. This would all have been at a cost to the banks, assuming a fee free account. So they, IMO, are more entitled to claim balances on small amounts that have been inactive for many years than the government is, assuming customers or those named in the customer's will can at any time regain their balances if they become aware of the lost accounts.

 

[bigdog]

INACTIVE BANK ACCOUNTS AT RISK OF LOSING DEPOSITS

http://www.heraldsun.com.au/money/b...nts-to-be-seized/story-e6frfh5o-1226585867131

CASH GRAB: Inactive bank accounts to be seized
by: By Stephen McMahon From: News Limited Network February 26, 2013

HOUSEHOLDS face losing up to $109 million from their family savings as the Federal government moves to seize cash from inactive bank accounts.

After legislation was rushed through parliament, the government will from May 31 be able to transfer all money from accounts that have not been used for three years into their own revenues.

This will mean that accounts with anything from $1 upwards that have not had any deposit or withdrawals in the past three years will be transferred to the Australian Securities and Investment Commission.

The law is forecast to raise $109 million this year as inactive accounts for three years or more are raided by Treasury.

The money can be reclaimed from ASIC but the process can take months.

Experts warn this will have a negative impact on people that may have put money away in a special account for their children's education or decided to put an inheritance in a separate account for a rainy day.

The previous legislation allowed for bank accounts to remain inactive for up to 7 years before the money was transferred to ASIC.

Australian Bankers Association chief executive Steven Munchenberg said there is no benefit for consumers from the changes.

"It is very hard to see why this needed to be rushed through but there have been suggestions it was done more for the government's own financial circumstances rather than customers needs," he said.

Mr Munchenberg warned that unaware customers face having accounts frozen and could face months of delays trying to reclaim their won money from ASIC.

This cash grab comes as economists warn the government is on track to hand down a $15 billion budget deficit in May as company tax receipts collapse.

Before Christmas, Treasurer Wayne Swan junked the government's previously "rock solid" promise to produce a surplus in 2012-13.

The government had also been committed to surpluses in future financial years, too.

But despite the introduction of some tough cost-cutting measures, the latest research from global bank UBS forecasts the May budget will show a $12 billion black hole in revenues and cost overruns of about $3 billion. The biggest pain is coming from the expected $8 billion fall in taxes from the corporate sector.


http://www.michaelsmithnews.com/201...s.html?cid=6a0177444b0c2e970d017c371954fd970b

UPDATED AGAIN - WHO VOTED FOR IT - Government to raid your bank account after 36 months of no transactions

Then the final vote that passed the bill into law - a law that lets the government reach into your private bank account and take your money.

Beyond the Labor Caucus who voted in favour, these individuals made this law.

Robert Oakeshott. Tony Windsor. Adam Bandt. Peter Slipper. Craig Thomson. Bob Katter.

 

[Julia]

Can you please quote me the legislation that is preventing the banks from contacting clients who have inactive accounts well before the three years is up?

No, Ves. And just calm down a bit. I have simply reported what I heard Steve Munchenberg saying. I will not be looking for any legislation. Take it up with Mr Munchenberg if you're unhappy.

FWIW, I heard a subsequent comment that - in light of this move by the government - banks will be writing to their customers advising them of the change. As I understand it, they have previously done this at the end of 7 years of inactivity on an account, now they will be required to do so at three years. If the banks did not do this, ASIC will simply take the money.

An arrangement that takes two minutes once every three (currently seven years) to avoid falling out of? You're kidding me

No, I am not kidding you, dear Ves. Neither, I imagine, is Bellenuit who also has some small amounts in currently unused accounts. It's my right to keep these open to avoid the hassle of paperwork etc, but I'm damned if I see why I should deposit or withdraw $1 and remember to do this every three years, for no better reason than to avoid the government getting its ever stickier fingers on it.

- I would have thought something like this encourages people to look after their money closely and I cannot believe that you are against this very principle.

You are taking your usual political stand here. I really don't mind whether you approve of my view or not.

Why would you leave your money there for that period of time in the first place? It's a three to six month wait - I would hardly consider that lengthy and unreasonable for the amounts of money we are talking about in the average inactive account! Considering it takes very little time to avoid it in the first place.

Now explained to you more than once. Why on earth should anyone have to wait up to six months to get their own money back.

Bellenuit has provided some further examples of how such accounts occur.

I'm sure my post will come off as rude to most people - but I believe that this is a massive storm in a teacup media headline grab that is easily avoided by most people.

Not rude at all. You're entitled to your view.

 

[white_goodman]

I was going to respond similarly. I have opened many online savings accounts as I chased the highest interest yield. As I move funds to a new online savings account that offers a higher yield, I leave $10 or $20 in the old account so it remains open should I want to reuse it at a later stage. Even though the amounts are small, I don't see why the government should get their grotty hands on them.

they are wiser and know how to spend your money better for you... thats why IFocus donates all his income into taxation

 

[Ves]

Some additional information:

Under the old law the Commonwealth cannot pay interest on amounts being held that were taken from dormant or inactive bank accounts. The new legislation will index any amounts held so they receive an interest amount equal to CPI for that year.

Old law was introduced under Howard / Costello I am told. Someone may be able to clarify this kindly. Is that government immune from any criticism regarding these regulations? Taking monies and paying no interest?

Links

THE BILL & EXPLANATORY MEMORANDUM
http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r4921

ASIC
http://www.asic.gov.au/asic/asic.nsf/byheadline/ASIC+Gazette+-+Unclaimed+Monies

ANZ
http://www.anz.com.au/personal/bank-accounts/unclaimed-monies/

Unclaimed money search service
http://australia.gov.au/service/unclaimed-money-search

 

[McLovin]

Three years seems like to short a period. I lived overseas for a fair few years and had an account in Australia that had about $25k in it that I never touched in all the time I was OS (I actually sort of forgot about it). Under the new laws I would have lost it.

Of course the money is still available to be reclaimed but it just adds another unneceesary piece of paper work.

The title of the thread is quite misleading.

 

[MrBurns]

Why would you leave your money there for that period of time in the first place? It's a three to six month wait - I would hardly consider that lengthy and unreasonable for the amounts of money we are talking about in the average inactive account! Considering it takes very little time to avoid it in the first place.

I'm sure my post will come off as rude to most people - but I believe that this is a massive storm in a teacup media headline grab that is easily avoided by most people.

Why would you leave your money there for that period of time in the first place?

How about because it's my money and I'll do with it as I damn well please without Gillard scabbing it with a dodgy law.

 

[explod]

I wish I could agree. But most people won't even hear about it, they'll too busy watching My Kitchen Rules or some other rubbish.

Closest post to the mark in the whole thread.