We’ve all heard about the “lost billions” sitting in idle superannuation funds around Australia but are you aware of what’s happening to hundreds of millions of dollars sitting in “inactive” bank accounts? Read on, you may be very surprised.
The Australian Securities & Investment Commission (ASIC) is now able to collect total balances from Australian’s bank accounts that have remained untouched for three years. Previously, this money could be collected after a seven-year period of no transactions however since December 2012 over $400 million has been transferred from bank accounts into the federal government’s Consolidated Revenue Fund. That’s enough to prompt action.
This is a true story
Your elderly, and very wealthy, Aunt Mary has accumulated a vast fortune that is scattered throughout many bank accounts. She relies on one account to cover her living costs but doesn’t touch the others, believing they are safely accumulating interest and are best left that way. She moved into a retirement village a few years ago and forgot to tell each bank of her new address.
Mary decides she wants to share her wealth before she dies, so she digs out all of her bank books and heads off to each bank to see how much she has available to divvy up between her numerous progeny.
You can imagine her horror when the teller at the first bank advises Mary that the account is no longer active with that bank and therefore they have no record of any balance. Even though the teller gently explains what has occurred and how to reclaim her money, Mary is devastated. She receives the same astounding news at all four banks she visits. In shock, she believes that she has lost most of her life savings.
How would you feel if this happened to you or an elderly relative? It would be very upsetting – but there is a happy ending.
It is still your money
This money still belongs to its rightful owner. Although it’s now held in the Consolidated Revenue Fund, a simple process will release all of the funds, plus interest!
Here’s how it’s done:
Visit www.moneysmart.gov.au and search for “claim money from bank account”;
- Follow the instructions on the page starting with a simple search;
- If a search shows money is being held in your name proceed through the three steps explained on that page.
After 1 July 2013 any money reclaimed will be paid back with interest. The interest applies only after this date and is not taxable.
Prevention is better than the cure
So that you don’t have to go through this whole process to reclaim your own money, review your bank accounts. If you have too many, consolidate them into one or two manageable accounts and make sure each bank holds your current contact details.
Just one transaction every two years will deem your accounts active. And don’t forget to share this with your elderly relatives.
ASIC’s MoneySmart website www.moneysmart.gov.au
ASIC website www.asic.gov.au Changes to the Commonwealth unclaimed money laws
ASIC Unclaimed money report – bank accounts: www.asic.gov.au/asic/asic.nsf/byheadline/Unclaimed+money+bank+account+list?
Business Insider Australia “ASIC Has Collected More Than $400 Million From Inactive Bank Accounts This Year: Report” Liz Tay (October 2013)