It’s the banking equivalent of finding a stash of coins down the back of your sofa.

Since 2001, legislation has been in place to help reunite people with money long since forgotten. The Dormant Accounts Act 2001 was designed to reunite account-holders and policyholders or their next of kin with their dormant funds and unclaimed policies in credit institutions.

With the addition of the Unclaimed Life Assurance Policies Act in 2003, a commitment was also made to reunite people wit h their unclaimed insurance policies. Under the terms of the legislation, unclaimed monies are transferred to the Dormant Accounts Fund, which is managed by the National Treasury Management Agency (NTMA). Some of this money is then used to fund charitable projects. However, the account holder or policy holder has a guaranteed right of reclaim at any time in the future.
What is a dormant account? Simply put, if no transactions are made on an account for 15 years, it is deemed to be dormant. Applying interest or fees during the 15 years does not prevent an account from becoming dormant, as activity must be ‘‘customer-initiated’’.

‘‘One of the primary aims of the legislation is to reunite accountholders with funds held by financial institutions on their behalf,” said a spokesman for the Department of Community, Rural and Gaeltacht Affairs, which is responsible for overseeing the dormant account rules. ‘‘The legislation clearly sets out the obligations that fall to the financial institution to notify the owner of accounts by way of public advertisement and written notification.”

All financial institutions have their own policies for identifying dormant accounts. For example, Ulster Bank customers receive a letter after five years of no activity on their account, and have nine months to either close or re-activate the account, after which it is frozen. A spokeswoman for the bank said: ‘‘After 15 years, the customer receives another letter stating that if they do nothing, the account will close, and money in the account is [then] transferred to the government.”

Bank of Ireland’s spokeswoman said: ‘‘Every September, we sweep our systems for accounts with no transactions in the last 15 years. Such accounts are identified and flagged as potentially dormant. We then write to these customers and if we don’t hear back from them by the end of the following March, the account is closed with all proceeds going to the NTMA.”

‘‘Institutions are required to write to all customers identified as holders of dormant accounts except where the balance isbelow€100,the institution has been instructed by the customer to hold all correspondence, or previous correspondence to the last known address has been returned marked ‘gone away’,” said a spokeswoman for EBS.

An AIB spokesman said: ‘‘These letters are sent out a minimum of three months before the accounts are due to go dormant. A notice is also placed in at least two of the national newspapers.”

Value of the fund

‘‘Data is not collected on the overall number of accounts that are dormant at any one time,” said the spokesman for the Department of Community, Rural and Gaeltacht Affairs. ‘‘Since the enactment of the legislation some €468 million has been transferred to the Dormant Accounts Fund,” he said.

The balances on dormant accounts, including accrued interest, must be paid into the Dormant Accounts Fund by financial institutions by the end of April each year.

Some €153 million - or just under one-third of all the money paid into the fund - has been reclaimed to date, based on figures to the end of April this year. If you become aware that some of your money has ended up in the Dormant Accounts Fund, you can reclaim it at any time. You can either contact the bank branch where the account was originally held, or the head office of the financial institution.

‘‘The customer needs to call to the branch bringing along, photo and address identification and complete a Dormant Account Claim form,” said a spokeswoman for Permanent TSB. In cases where the account holder has died, the legislation provides that a person’s family, or heirs, can reclaim the money on their behalf.

A spokeswoman for Halifax explained that if ‘‘all is in order’’, the bank would then reclaim the funds from the NTMA on the account holder’s behalf. She said: ‘‘The NTMA must return the funds to the account, within 21 days, and include interest that would have been earned during that time.”

Felix Larkin, head of retail debt with the NTMA, said about 15 per cent of the Dormant Accounts Fund was held on overnight deposit with the Central Bank to cover potential repayment claims. ‘‘It needs to be sufficiently liquid to be available for anticipated claims by account-holders,” he said. The remainder is held on term deposit, with varying maturities that match the profile of likely draw downs from the fund by account-holders.

According to Larkin, the Dormant Accounts Fund is currently worth about €220 million. The spokesman for the Department of Community, Rural and Gaeltacht Affairs said: ‘‘The net addition to the Dormant Accounts Fund, namely funds transferred less those reclaimed, amounted to €35 million and €32 million in 2006 and 2007 respectively. The position for 2008 will not be known until early 2009.”

Charity

While a significant chunk of the money in the Dormant Account Fund is reclaimed by its owners, the legislation allows for unclaimed monies to be used to fund certain charitable projects.

Initially, the Dormant Accounts Fund Disbursement Board was responsible for overseeing the transfer of money from the Dormant Accounts Fund to qualifying charity projects. In September 2005 the legislation was amended, with the government being made responsible for decisions on disbursements from the fund.

The original board was renamed as the Dormant Accounts Board, with a revised role of providing independent advice and acting as an appraiser in relation to the government’s decisions on how to spend the money in the Dormant Accounts Fund. The Minister of Community, Rural and Gaeltacht Affairs appoints the members of this board.

Larkin said about €45 million was disbursed from the fund to charitable projects last year, up from €33 million a year earlier. The disbursements from the fund concentrate on projects that assist three broad categories of people - those affected by economic and social disadvantage, those affected by educational disadvantage, and people with a disability.

‘‘In general, following publication of a scheme of funding, eligible bodies are invited to submit applications for funding. The public bodies under whose remit these schemes operate assess the applications,” said the spokesman for the Department of Community, Rural and Gaeltacht Affairs.

Michael Morley, chair of the Dormant Accounts Board, said there was no cap on the amount that any one project could receive under the scheme. ‘‘Priority is given to projects in deprived areas,” he said.

One of the key criteria for receiving funding under the scheme was ‘‘additionality’’, Morley said. ‘‘Basically, this means the project wouldn’t happen otherwise,” he added. Disbursements from the fund in any given year can sometimes relate to approvals for funding made in earlier years, according to Morley, due to the time-lag on certain capital projects.