Dormant Bank and Building Society Accounts Bill [Lords]

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Ian Pearson: I beg to move amendment No. 15, in clause 11, page 7, line 3, at end insert ‘in all circumstances’.
It is clear that when defining dormancy as a period without customer-initiated activity, we should not include accounts where no activity on the account is an integral feature of it. In the case of fixed-term accounts, whereby the money is locked in for a period of years when no transactions are permitted without significant penalties, the 15-year clock should start ticking only when those conditions expire at the end of the term.
The clause covers all accounts. In the case of a fixed-term account, it ensures that the 15-year period of inactivity required to meet the dormancy definition cannot begin until the fixed-term restrictions have ended. However, in respect of certain types of account that could be considered to fall under this exclusion, such as those where a short notice period is required before a withdrawal can be made, it has been argued that the position is not totally clear. The hon. Member for Fareham was getting at that point a moment ago.
We want to make it clear that such notice accounts are eligible for inclusion in the scheme. For those accounts, a period of 15 years without customer-initiated activity will still be a good indicator of dormancy, subject to the other conditions that the banks and building societies have committed to taking into account through the banking code. Our amendment clarifies the position to ensure that only accounts where a genuine penalty or disincentive is applied to any withdrawal are to be prevented from being considered for dormant status. We hope that this technical amendment clarifies the situation.
Mr. Hoban: The amendment might well address the issue that I was probing earlier, but I am not entirely clear that it does that. Although I welcome the amendment, it does not entirely remove the objections that I referred to. Although the Minister has clarified what the amendment is designed to do, and I think that we are working towards the same end, I am still not sure that the wording “if at any time” is entirely neutralised by the addition of “in all circumstances”.
Amendment agreed to.
Amendment made: No. 16, in clause 11, page 7, line 4, leave out subsection (3).—[Ian Pearson.]
Further consideration adjourned.—[Mr. Blizzard.]
Adjourned accordingly at one minute to One o’clock till Wednesday 15 October at half-past Two o’clock.
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