What happens to money left unclaimed in bank accounts that people have forgotten about? In some cases, the account holder will remember (or be reminded) that it’s there, but in others, that simply doesn’t happen. In the United States, each state runs a missing money program where unclaimed funds go. Each state is required to keep the money or other valuable property in an individual’s name until it can be claimed. If it isn’t claimed after a certain point, it can be used by the states.
But things are different in the UK. In cases when there is unclaimed money it could be put to use helping good causes – and that’s exactly what’s happening, thanks to a new initiative involving a major financial group of businesses…
The Co-operative Financial Services will run the fund that collects money from dormant bank accounts to use in the Big Lottery Fund, after receiving authorization from the Financial Services Authority (FSA), which regulates providers of financial services in the country.
As reported on Think Money, the new fund will be known as Reclaim Fund Ltd, and will be run on a purely non-profit basis. As such, it will operate independently from the rest of The Co-operative Financial services, with its own Executive and its own Board.
It’s part of government plans in which all money held in bank accounts that have been untouched for 15 years or more will be put towards charitable causes. However, some of this money will be held back by Reclaim Fund Ltd, just in case account holders do realize they have a dormant account and want to claim their money back.
It is thought that the Reclaim Fund will receive a total of £400 million or so from dormant bank accounts, with the first distribution to the Big Lottery Fund in the region of £60-100 million, transferred in phases over the next 12 months.
In England, some of the money will be used to fund the ‘Big Society Bank’, which according to the Financial Times will lend money to businesses whose goals will produce “a social benefit”.
It’s good to see the UK government doing good things with the money – and it’s something the US might want to consider in the future.