Money Matters - Unclaimed Money
Friday, 4 December 2009
Liam Croke: Money Expert
Liam has worked in the financial services industry for the past 21 years and seen by many as an expert in the field of personal finance. He is a qualified financial and mortgage advisor.
In the past he has held senior management positions with two well known financial institutions along with one of the "top 5" accountancy practices in Ireland.
Liam gives his advice and wisdom on a daily basis to those who are just starting out to high net worth individuals. He currently works for a financial services company based in Limerick.
He is frequently asked to contribute and comment in all areas relating to personal finance on both national and local radio stations. You will have heard him for example recently on RTE's "The Mooney Show" and on Newstalk's "The Right Hook."
Liam was invited to make a presentation to the Joint Oireachtas Committee on Social & Family Affairs on trends and levels of personal debt in Ireland. He made his presentation to the committee on the 24th June 2009.
Liam is author of 4 personal finance books:
. The best selling "The Mortgage Maze Explained" published by Currach Press in 2006.
The best selling book "Your Money Your Life - Managing your finances in today's Ireland" published in 2007.
"I'm Broke! A teenagers guide to Money" - Published by Crabtree and distributed in the UK & USA in 2009
"Stash or Splash" which is being released in Ireland and the UK in September of this year.
. Liam previously wrote a weekly personal finance column for The Sunday World entitled "Mr. Cash - How to Save it, Spend it, Earn it" and has also written articles for the Sunday Business Post, the Evening Echo, the Sunday Independent, the Irish Sun, Prudence Magazine to mention just a few.
Liam is going to talk us through 3 different options were there may be unclaimed money due to us.
. Did you know that over €42 million was transferred from dormant bank/building society accounts and from insurance companies to the National Treasury Management Agency (NTMA) in the first 10 months of this year?
. And did you know that over €16 million was reclaimed by account holders or from their next of kin so far this year!
. Since 2003 over €182 million has been reunited to people who held "dormant accounts" or to their next of kin.
. Since 2003 over half a billion has been transferred from dormant accounts to the NTMA and in that time the NTMA has earned over €34 million in interest alone from this amount!
1. DORMANT ACCOUNTS
What exactly is a dormant account?
Well, it is an account where no transactions have been made into or out of it for the past 15 years. Interest or fees could have been applied to the account in that time but that does not prevent it from being deemed dormant because for an account to be active then the transactions must have been "customer initiated".
Back in 2001 legislation was introduced to help reunite people with money long since forgotten. The Dormant Accounts Act 2001 was introduced to help account and policy holders or their next of kin with the funds from dormant accounts and unclaimed policies in financial institutions.
Under this Act, financial institutions have to contact you if you have not completed a transaction on your account in 15 years or more and if the institution cannot contact you, the money in the account is then taken over by the state.
This act also provides that the balances of dormant accounts that are remitted to the State can be disbursed for charitable purposes or purposes of societal or community benefit. This surplus money held in the fund is primarily used to support projects aimed at easing poverty and social deprivation, supporting people with disabilities, or helping people who are educationally disadvantaged.
The Minister for Community, Rural and Gaeltacht Affairs has overall responsibility for payments from this fund. The Dormant Accounts Board has been appointed by the Minister to produce a disbursement plan for government approval and the plan sets out the objectives of the funding and how they are to be achieved. Maybe the minister should consider using money from this fund to help those people who have suffered enormously due to the flooding over the past number of weeks??
The balances from dormant accounts are to be transferred not later than 30 April of each year with the first such transfer taking place back in 2003.
That very first year a massive €198,987,180 was transferred to the NTMA which was made up of €105,802,747 coming from banks/building societies and €90,406,394 coming from An Post products!
2. UNCLAIMED LIFE ASSURANCE POLICIES
In 2003 the Unclaimed Life Assurance Policies Act was introduced whereby the net encashment value of certain life assurance policies began transferring to the Fund where the holders of the policies in question cannot be traced. (possibly passed away) The first transfer in respect of dormant life assurance policies took place in 2004 for guess how much? €22,994,803 that's how much was going unclaimed from polices held with life insurance companies. This year alone that figure stands at over €5 million!
Also in cases where someone dies without making a will and their relatives cannot be found, the state is the ultimate beneficiary of his or her money and property. The proceeds are placed in an intestate estates fund account. The money in this fund will also be transferred to the Dormant Accounts Fund and used to fund projects and the amount currently with the NTMA from such cases is €4.4 million euros.
There was a case in Carlow in the past few years where there was a search on to find two beneficiaries of a will that is believed to be worth a six-figure sum. Despite exhaustive searches to track down two of the beneficiaries who were bequeathed a substantial sum of money following the death of a local pharmacist, the lucky pair has yet to come forward to claim their legacy. How many more people are like this i.e. they just don't know about a possible inheritance - are you one of them?
PEOPLE TAKE NOTE:
Under legislation financial institutions have an obligation to notify the owner of accounts by way of public advertisements and written notification. Some banks for example will write to their customers if there is no activity on the account for 5 years and if nothing happens just before the 15 year period another letter is sent out stating that the account will be closed with the money being transferred to the government.
Banks/building societies do not have to inform account holders in writing if the balance is below €100 and life assurance companies do not if the balance is below €500.
There is no time-bar on account holders or their next of kin reclaiming dormant funds, as your rights are preserved. This means that even if the funds or property have been transferred to the Dormant Accounts Fund, you or your next of kin still have a claim on your funds or property.
HOW DO YOU GO ABOUT ENQUIRING OR MAKING A CLAIM?
If you believe you have an account or a deceased relative may have had one that is classified as "dormant" then make contact with the institution that you believe the money may have been on deposit. Make contact with a particular branch or their head office so as to enable your account or the account you may be entitled to be reactivated and removed from the dormant list.
What you need to bring with you is some sort of photo ID and address verification for you and complete a Dormant Account Claim Form (We will post this on our website for you)
All claims are thoroughly investigated and a bank has 28 days to validate a claim and submit a claim to the NTMA. The NTMA has a further 21 days to respond and a further 7 days to refund the customer so all in all it could take 56 days in total from the time you make a claim to when you are reimbursed.
If a financial institution is unable to validate your claim and you are notified of their reasons and you are unhappy with this and you proceed to make a further claim through their internal complaints process then you can raise the matter further with the financial services ombudsman.
Every credit institution will try and trace accounts for bona fide claims from those seeking to establish the existence of accounts that you may be entitled to the proceeds. A fee may be charged by a bank for undertaking this search so ask before hand if a fee will apply and how much will it be!
If an individual makes a fraudulent claim then they may be guilty of an offence and prosecuted under the terms of the Act.
By the way at the moment this Dormant Accounts Act does not apply to accounts held in credit unions but it is hoped that they will be brought within its scope at some stage.
Just a reminder of those figures again:
. Since 2003 there was over half a billion euro transferred to the NTMA from dormant bank accounts/insurance products and to date over €182 million has been reunited with the owners or the beneficiaries of these accounts. That means that there is still over €330 million that has gone unclaimed to date!!
. Remember that in the first 10 months of this year nearly €16.5 million was given back to people or those legally entitled to it that had dormant accounts/life assurance policies.
. Could you be the owner of such an account or the beneficiary of such an account?
www.ibf.ie - Irish Banking Federation - For information on how to claim from Dormant accounts.