Caroline McCreadieCash and Securities Network ManagerThomas Murray
A dormant account is an account that has had no financial activity for an extended period (typically 2 years), except for the posting of interest. The inactive period that turns an account into a dormant account is generally determined by the account providers.
Globally, different financial institutions and countries have varying inactive/dormant account periods, and the policies do change. Service fees might also be collected on dormant accounts. Usually, the longer an account has been dormant, the higher the annual service fees that are charged. Banks resort to dormancy to try and prevent potentially fraudulent activities, including identity theft. For example, when companies move premises, bank statements may be delivered to an outdated address. As a result, privacy may be breached as others may now have access to sensitive information to potentially gain access company funds. In the UK, banks take part in the Dormant Accounts Scheme, established under the Dormant Bank and Building Societies Act 2008. If an account is in credit and has been dormant for 15 years or more, account providers may transfer the balance to Reclaim Fund Limited (RFL). Account holders can claim and re-activate their accounts by making deposits, withdrawals, transferring, or making bill payments.