Dormant Bank and Building Society Accounts Act 2008
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You would like to think in this enlighted age this would not need saying but it does so we will: a deposit in a bank account constitutes a debt owed by the bank to its customer. The bank is free to use the deposited money received from customers however it likes[1] the bank remains liable to repay the debt to its customer indefinitely. Unclaimed bank deposits aren’t covered by the Limitation Act 1980 — if you never ask for your money, the limitation period never begins to run — so banks are faced with a perennial problem with “gone-away clients”.
Enter the Dormant Bank and Building Society Accounts Act 2008, which allows the bank to cancel its liability to repay a customer by transferring the balance of a dormant account to a reclaim fund. The customer’s doesn’t lose its rights altogether: they are can be exercised instead against the reclaim fund.
This cancellation of liability means banks can participate in the scheme without suffering an adverse impact on their balance sheets.
See also
- ↑ Yes yes yes — keeping some aside under prudential rules to keep an adequate capital base.