Business owners and consumers could be unwittingly losing big bucks, as an apparent lack of notifications see dormant accounts seized without warning.
By law, authorised deposit-taking institutions (such as banks) are required to transfer funds that sit dormant for a period of seven years to the Australian Securities and Investments Commission (ASIC).
One My Business reader, identified only as Brian, recently commented on a 2016 article titled ‘Govt calls on Aussies to claim lost savings’, explaining how he inadvertently discovered a large sum of money was taken from his account without any notification from either his bank or ASIC.
“How damned hypocritical of the government to ask people to come and look for their ‘lost money’ that the government can’t wait to grab as consolidated revenue! Only recently the ‘seven-year rule’ was a three-year rule, so that if you had a bank account (no matter how large) that you did not do a transaction on in three years, it was automatically paid to the government – with NO PRIOR NOTICE to you!” says Brian.
“I had over $50,000 sitting in a major bank account for my children, which I left there to grow for them, and one day I got a bank statement showing it was GONE. I asked the bank what happened and they said because I had not done a transaction for three years, by law they had to AUTOMATICALLY give it to the government. They had all my contact details (and they regularly send me junk mail) but did not bother to contact me before they did it!
“Luckily I had opted to keep getting paper statements or I would never have found out! I got it back, but I was very unhappy with the whole incident. How many unsuspecting people [have] this money grab happened to?”
According to Brian, none of his professional colleagues across the legal and accounting professions were aware that this could be done without any form of notification, with the exception of small superannuation accounts.
My Business contacted ASIC to determine whether notification is required to be given to customers before such funds are transferred, however a spokesperson only said that “A number of changes to the laws governing unclaimed money were introduced with effect from 31 December 2015 and included … removal of the requirement for ASIC to publish details of unclaimed moneys in the Gazette and other measures to enhance privacy of individuals.”
The spokesperson also referred My Business to the Australian Bankers Association [ABA] for comment as to whether there were industry guidelines in place specifically for bank accounts.
“There doesn’t appear to be an ASIC requirement for financial institutions to notify customers [and] we don’t have an industry guideline or best practice standard for banks to follow in these circumstances,” said the ABA’s spokesperson.
Have you experienced money being transferred under this little-known rule? If so, were you notified in advance? Tell us your experiences below!
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.