Select Committee on Treasury Eleventh Report



53. According to a survey carried out for the Commission on Unclaimed Assets, one in three people said they had a dormant account.[115] We were eager to learn why that proportion was so high, what systems were currently in place to reunite people with their dormant accounts and whether there were any impediments to reunification. There is currently no single source of information on dormant accounts. Individual banks and building societies have their own methods for reclaim, and additional separate schemes are run by the BBA for banks, the BSA for building societies and NS&I. The schemes run by the BBA and BSA do not currently contain data themselves, but they are a conduit for enquiries relating to accounts held by their members. If an individual, or their heir, believes they have a dormant account with a particular institution, both central schemes could direct them to the relevant contact at the institution concerned. Where the BBA and BSA schemes are particularly effective where either an individual does not know which institution holds their dormant account, or if the institution holding their account no longer exists. The services provided by the BBA, BSA and NS&I are all free.

54. The multiplicity of dormant account search mechanisms has led the CUA to declare that:

    there are significant barriers in the UK to consumers accessing their assets. These barriers potentially include a lack of consumer awareness about how to reclaim funds, a lack of confidence in or fear of the system, or that the system itself is overly complex or disparate.[116]

Proposals for a centralised search facility, or national register, have been mooted for many years, but there have been few signs of progress. In 2002, the Government discussion paper Next Steps for Volunteering and Giving in the UK stated "We want to [understand] … how a comprehensive database might be achieved".[117] By 2005, the onus for investigating a register had moved to the banking sector: "The Government also expects the [banking] industry to explore what more could be done to reunite owners and assets, including the possibility of a national register".[118] The Economic Secretary informed us that, subsequent to the 2005 announcement, the Government had made a judgement, in consultation with the banks and the building societies, that a national register would be "hugely bureaucratic and cumbersome, and would not deliver a great deal".[119] Instead, he argued that "by getting the banks and building societies and National Savings to work together with a statutory duty to reunite we can achieve the same objective, but we are not proposing a central register."[120]

A centralised register

55. A centralised register, if one could be set up, would contain data relating to all accounts identified as dormant by financial institutions—banks, building societies and NS&I to start off with, although it could be extended to many other asset classes. These institutions would submit files containing updated lists of dormant accounts on a regular basis, thus creating a "one-stop shop" for all customer enquiries relating to dormant accounts. The main advantage of such a body would be the ease with which consumers, heirs and other interested parties (such as probate solicitors) would be able to identify whether or not a particular individual possessed a dormant account. The main problems with such a scheme would be concerns over data security and cost.

56. In many ways, a prototype centralised register already exists—the Unclaimed Assets Register (UAR). The UAR is a commercial enterprise set up in 2000 with two objectives: to assist members of the public recover their lost or forgotten financial assets and to assist financial institutions address the issue of unclaimed money. Companies from the life assurance, pensions and unit trust sectors, as well as UK listed companies, supply the UAR with records of those customers with whom contact has been lost. This information is held on a secure database and can be searched by anyone for a fee of £18. If a potential match is made, the searcher is given contact details with the relevant financial company and asked to make contact, whereupon the company concerned verifies entitlement and makes direct payment. Since its inception, the UAR has helped re-unite approximately £500 million with its rightful owners.[121]

57. No banks had signed up to the UAR until Charity Bank did so in 2003. In July 2007, HBOS announced that it too was signing up to the UAR to help in tracing its dormant customers. Charity Bank believe that the UAR (or something similar) could form the basis of a national register easily capable of being searched by individuals, companies and probate solicitors:

    We believe that it could be made available as a public benefit service with Experian (or an other) appointed to manage the service. The key feature is that it is independent and impartial with no other services to promote. All financial institutions would be required as part of their licence to make their data available to the Register in a common searchable format… The Register should be subject to the scrutiny of Parliament through the Treasury Select Committee or the Public Accounts Committee. Financial institutions not complying with the Register should be capable of being fined.[122]

One beneficiary of a searchable register would be charities that have received incomplete estates from legators because estate executors were unaware of dormant account holdings. In evidence to us, the Unclaimed Assets Charity Coalition (UACC) called for the Government to create a comprehensive national register of unclaimed assets, managed by a public agency, to ensure that both charities and individuals have full access to information to enable them to find the money they are owed. They believed that this register should be mandatory for all financial institutions, be comprehensive for all types of unclaimed assets, offer public access to all, be searchable and be free to the user.

58. However, Mr Storey of Grant Thornton argued that the establishment of a national register in the UK "would be an administrative nightmare and a very costly exercise and fraught with fraud difficulties."[123] The Economic Secretary associated himself with the sentiment of Grant Thornton's view at a later hearing: "I have to say that our judgment, in discussion with the banks and the building societies, is that Mr Storey is right, but I am not ruling it out".[124]

UK Lost and Found

59. The CUA regarded the establishment of a centralised database as unnecessary, but proposed the creation of a less data-intensive scheme, "UK Lost and Found". This would be a low-cost, single interface, capable of asking all financial institutions whether they held an account on their systems belonging to a particular individual. The objective would be to make it easier for consumers to be reunited with their lost financial assets and reduce overall administration without compromising data security. The CUA argued that, if there were a single search interface requiring minimal information, it would greatly increase the number of people that attempted to trace their dormant accounts. A survey carried out for the CUA showed that 58% of people claiming to have dormant accounts regarded the sums contained to be too small to be worth attempting reclaim. The CUA wondered "whether that is too small given the present ease or otherwise in trying to find it rather than too small because I do not care about that size of money at all". [125]

60. The CUA outlined two possible models in their report entitled Unclaimed Assets: Consumer protection and regulation of dormant accounts.[126] One would retain some basic information such as name, date of birth and last known address centrally in a national register. The other would not, instead securely interrogating databases of dormant assets within each financial institution.[127] The CUA explained in more detail how their proposed scheme might work:

    Quite simply, it could be a very thin interface that allows web, telephone or similar access and it would distribute the information that was put in to the present three systems that you have through the BBA, the BSA and the National Savings [and Investments] … That would feed directly through to the members that were relevant. We do not see this as being a massive systems cost on top of what is there already. This is trying to provide a relatively cheap solution that makes things much easier for consumers.[128]

The CUA's proposals would offer a single interface for all dormant accounts, a simplified initial search, so consumers could check at an early stage whether it was worth them continuing their search and a variety of search channels including telephone, internet and paper-based forms. The service would be free to the end user. The CUA envisaged that industry and Government would work together to develop and implement flexible identification and verification requirements.[129]

61. When we asked the Economic Secretary for his view of the CUA proposals he replied: "One never has a closed mind on these matters. I am happy to listen to further consultations."[130] Indeed, he stated that he had already set in motion plans to combine the search portals run by the BBA, BSA and NS&I:

    As I said, on the face of the Bill the first priority will be a duty to reunite resources with customers, and following a meeting that I had yesterday and conversations with the British Bankers' Association I wrote yesterday to the British Bankers' Association, to the Building Societies Association and to National Savings urging them to come together and have a common way of reuniting customers with their unclaimed assets, which is common across banks, building societies and National Savings.[131]


62. The existing reclamation arrangements run by the BBA, BSA and NS&I have had some success in reuniting dormant accounts with their customers. However, the multiplicity of search mechanisms may discourage some customers in reclaiming their dormant accounts and a single search facility would be a significant improvement in this area. We do not consider that the establishment of a comprehensive register of dormant accounts, requiring account details to be transmitted to a central repository, is desirable at this moment. Such a system would be costly and involve complex data security issues. We were impressed by the proposal set out by the Commission on Unclaimed Assets for a single interface that would not hold account data itself. The great merit of this proposal would be that both costs and data transfer could be minimised. We urge the Government to investigate how such an interface could be adopted in order to unify the existing systems run by the BBA, BSA and NS&I.

115   Ev 103 Back

116   Ev 103 Back

117   HM Treasury, Next Steps for Volunteering and Giving in the UK, December 2002, para 2.37 Back

118   HM Treasury, Budget 2005, March 2005, para 5.87 Back

119   Q 319 Back

120   Ibid. Back

121   Ev 52 Back

122   Ev 95 Back

123   Q 30 Back

124   Q 320 Back

125   Q 228 Back

126   The Commission on Unclaimed Assets & National Consumer Council, Unclaimed Assets: Consumer protection and regulation of dormant accounts, April 2007, pp 18 to 20 Back

127   Ev 105 Back

128   Q 229 Back

129   Ev 104-105 Back

130   Q 320 Back

131   Q 310 Back

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Prepared 6 August 2007