Before computerisation, customers were given a passbook for their bank or building society account. They produced the passbook when they wanted to pay money in or out of their account. The bank or building society hand-wrote the transactions into the passbook and these entries provided a record of the account.
Passbooks were generally replaced from the early 1970s by computerised records and printed account statements. But building societies continued to issue passbooks for some accounts, even after computerisation.
Customers often kept the old passbooks long after their account had been computerised, and many banks and building societies did not insist on taking back old passbooks.
A dormant account is one that is not being used, and where the financial business has lost touch with the customer. After an account becomes dormant it is transferred to a separate register of dormant accounts (there may be individual ones for each branch). It is recorded under the name of the customer. After a time, the account number might be reused for someone else's active account.
A dormant account remains in the register of dormant accounts indefinitely, until the customer gets in touch with the financial business to claim the account. The financial business can never claim the money for itself, no matter how much time has passed.
Many building societies have the right, under their membership rules, to close an account if:
In these cases, we would expect to see a record of the closure in the building society's register of dormant accounts.
We see complaints where:
Because the bank or building society is unable to produce a record of how and when the account was closed, and the consumer holds a passbook that seems to show that there is still money held in the account for them, the consumer refers the complaint to us.
If the passbook is not in the consumer's own name, we will make sure that the consumer has the right to bring the complaint.
For example, where the passbook is in the name of a relative who has died, we will check that the complaint is being brought by whoever is legally entitled to act on behalf of the estate (or, where there is only a small amount of money at stake, the person who is entitled to receive the money).
Even though the last transaction in the passbook may have been many years ago, time only starts running for the purpose of our rules from the point that the consumer presents the passbook and is told by the financial business that the account is no longer in existence. We allow six years from that point.
We can consider complaints that are referred to us outside the usual time limits in two circumstances:
When we investigate these cases, we will review all the available evidence. Because these complaints frequently involve accounts where there have been no transactions for many years - or perhaps even decades - it is not usually possible to trace clear documentary evidence about exactly what happened in relation to the account. So we will use what evidence we have, to decide what probably happened.
Banks and building societies are not required to keep records indefinitely. So we do not expect the financial business to be able to produce a withdrawal slip for the closure of an account, if many years have passed since the last recorded transaction.
Generally, this means we won't treat the lack of a withdrawal or closure slip as proof that the account is still open.
Sometimes the wording in the passbook will say that it should be produced when a withdrawal is made. Often it will say that it must be produced when a withdrawal is made. In that case consumers may, understandably, feel that unless the bank or building society can prove to them that the account was closed, and show them who closed it, then it should pay them the money showing in the book.
But we know that banks and building societies did not refuse people access to their money if, for example, they had forgotten or mislaid their passbook.
Withdrawals would be allowed without the passbook, and perhaps a duplicate passbook issued, as long as the bank or building society was satisfied about the customer's identity. So we will not consider the existence of a passbook with an apparent balance as proof that the account must still be open and the money available.
Old correspondence relating to an account is not, usually, evidence that the account (and any balance mentioned) still exists. A statement sheet is simply a "snapshot" of the account at that point in time, and we would normally expect the consumer to be able to provide some additional evidence to point to the account still being in existence - over and above just a letter, statement or cheque book.
We expect the financial business to have searched its own records for any trace of the account before the consumer brings their complaint to us - and to show us that it has made a thorough search.
We will also examine the earliest available register of active accounts and the register of dormant accounts. We won't be able to show these registers to the consumer, because they contain details of other consumers' accounts and those consumers are entitled to have their information kept confidential.
If the account is still open, it will normally show in one of the registers - though it may require a careful search, particularly if the consumer changed their address and/or name since the last date on the passbook or statement.
While it is not unknown for us to find the account in the registers where the financial business has previously failed to do so, it is very unusual indeed.
If we are satisfied that there is no evidence of the continued existence of the account, such as an entry in the financial business's current or dormant account records, we are generally likely to decide that the account was probably closed and the balance withdrawn at a date after the last recorded entry in the passbook, in circumstances that the consumer has forgotten.
Mrs A found a passbook when sorting out the boxes in her attic. It was for a savings account which she had opened in 1972. The last entry in the passbook was a deposit of £100 on 12 June 1975 which brought the balance at that time to £250.
Mrs A asked the financial business for the money, plus interest, but it refused.
The financial business could not find an entry for the account in its active account records. It supplied us with a copy of the relevant dormant account registers for all its branches in the area. We searched those but did not find an account in Mrs A's name.
If the account had remained untouched, we would have expected it to have shown in the financial business's records.
We noted that there was no reason for the financial business to have lost touch with Mrs A, as she had not moved address since the account was opened.
We also noted that the balance in the passbook represented a significant amount of money at the time. We considered it likely that, had the account remained open, Mrs A would have kept the passbook with her other current financial papers and would have presented the passbook for interest to be added.
The most likely explanation was that the account was probably closed and the balance withdrawn at a date after the last recorded entry in the passbook, in circumstances that Mrs A has forgotten.
We will return the original passbook at the end of our investigation. Whatever the outcome, we may stamp the passbook to show that it has been the subject of an investigation by us. That is to stop the passbook being rediscovered by someone else in the future, and the matter being referred to us again.
In most of the cases we see involving rediscovered old passbooks, we do not find any new evidence in the financial business's records. However, if we find strong evidence that the account and balance still exist, then we are likely to tell the financial business to:
This is part of our online technical resource which sets out our general approach to complaints about a wide range of financial products and issues. We would like your feedback on how helpful you found it. Please also use the feedback form below to tell us about anything you think we could clarify or explain better.