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online technical resource

rediscovered old passbooks and dormant accounts

introduction

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.

dormant accounts

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.

differences for old building society (or former building society) passbooks

Many building societies have the right, under their membership rules, to close an account if:

  • there has been no contact with the customer for three years and there is less than £100 in the account; or
  • there has been no contact with the customer for five years, however much money is in the account; and
  • reasonable attempts have been made to trace the customer.

In these cases, we would expect to see a record of the closure in the building society's register of dormant accounts.

what complaints do we see?

We see complaints where:

  • the consumer discovers an old bank or building society passbook - which might be their own, or one that belongs to a relative who has died;
  • the passbook shows a balance of money apparently still in the account; and
  • the bank or building society says that the account is no longer open but cannot say exactly when it was closed, or produce a copy of the customer's signature withdrawing the balance and closing the account.

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.

can we consider the complaint?

where the passbook is not in the consumer's name

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).

time limits

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:

  • where the financial business does not object to us considering the matter; or
  • where we agree there are exceptional circumstances justifying the delay in the consumer referring the matter to us.

what we usually need from the consumer

  • The original passbook (rather than a photocopy).
  • Details of any name and address changes that have taken place since the last recorded entry on the account.
  • Details of any major financial transactions (such as a house purchase) since the last recorded entry on the account - which can help the consumer to recall what was happening in their life around the time the account became unused, and sometimes even prompts them to remember how the money was used.
  • An explanation of how the passbook came to light, and why there had been no contact with the financial business about the account before that.

what we need from the financial business

  • The earliest available record of active accounts after the last transaction date in the passbook.
  • Extracts from its register of dormant accounts, if there is one. If these include information about other peoples' accounts, we will treat them as confidential.
  • If there is a register of dormant accounts, evidence that a full search has been carried out.
  • Clarification about whether it is possible that the account was transferred from the branch which issued the passbook to another branch - particularly where there have been branch closures, or where banks or building societies have merged.

our approach

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.

lack of evidence of closure of the account

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.

existence of a passbook with an apparent balance

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.

where there is no passbook

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.

searching registers of accounts

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.

case study

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.

returning original passbooks

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.

compensation

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:

  • reinstate the account, with interest, at the rate appropriate to the type of account held, from the time of the last recorded transaction to the point at which the consumer first asked for the money;
  • pay interest on the new balance at the rate of 8% per annum simple from the point the consumer first asked for the money, to date; and
  • pay compensation if any distress and inconvenience was caused to the consumer.

additional resources

  • ombudsman news
    ombudsman news - September 2001
  • the Reclaim Fund
    The Reclaim Fund receives dormant account money from UK banks and building societies, and distributes it to a variety of causes. However, this does not stop anyone who discovers a dormant account in their name from claiming and receiving their funds. Consumers can do this by approaching the bank or building society that held the account, who will deal with the enquiry as agents of the Reclaim Fund.
  • where the financial business is unknown
    There is a website operated by the British Bankers Association, the Building Societies Association and National Savings and Investments, which consumers can use to search for lost accounts and savings (mylostaccount.org.uk).

    The British Bankers Association and the Building Societies Association also maintain records of bank and building society mergers and changes of name, which can help where the original bank or building society shown on the passbook or statement no longer exists.
  • Second World War accounts
    There is a website which deals with bank accounts that were frozen under Second World War legislation.

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.

image: passbook
  • The law requires us to decide each case on the basis of our existing powers and what is fair in the circumstances of that particular case.
    We take into account the law, regulators' rules and guidance, relevant codes and good industry practice at the relevant time.
    We do not have power to make rules for financial businesses.
    Our current approach may develop in the light of circumstances disclosed by further cases we receive.
    We may decide that fairness requires a different approach in a particular case.