By Andy Davies, Financial Institutions Relationship Manager at Estatetrace
Supporting Financial Institutions with Dormant Account Tracing
At Estatetrace, we offer dormant account tracing services for financial institutions where customers have become disengaged or have gone away. While we have a high discovery rate to find these gone away customers, we are also able to support banks and building societies in demonstrating that they have made all reasonable endeavours to trace a customer and repatriate them with their assets before funds are transferred to things like the Dormant Assets Scheme, if this is appropriate, their own nominated charity, or archived on their systems.
Understanding the Dormant Assets Scheme
The Dormant Assets Scheme was set up to address the issue where assets have remained untouched for a significant period of time (15 years for bank accounts) and means such funds can be moved to the scheme to be used to support environmental and social initiatives. Customers can still re-claim their assets at any time. It is, however, in everyone’s interests that there are as few claims as possible following any transfer. Therefore, financial institutions need to prove that their tracing efforts have reached a conclusion or the situation is too complex to repatriate the assets before funds are voluntarily transferred.
When to Draw the Line on Dormant Account Tracing
The Dormant Assets Scheme offers a solution where no other sensible outcome can be achieved. But how do firms know where to draw the line on tracing efforts?
One clear-cut example is a recent case we worked on, where we had identified an individual contained in a data set of a bank’s active customers had passed away in the mid-1980s. We purchased the Probate record in an attempt to trace the executor of the estate. There was no Will, and the deceased — a Hungarian national who had been living in Wales — had no immediate family. The executor on the record of Administration was named as the Consul of the Socialist Federal Republic of Yugoslavia.
It was unusual that an ambassador and their subsequent colleagues were named as an executor on the estate, but the greater issue was that the country of Yugoslavia was disbanded in 1992. While the consul’s address still existed, it now houses the embassy of an entirely different jurisdiction.
Demonstrating Due Diligence in Complex Tracing Cases
In this case we were able to support the financial institution with evidence of their due diligence in attempts to find the executor and show that all reasonable endeavours had been made to repatriate funds with the correct beneficiary before any final activity commences on the asset. For our Client, this win is multi-faceted. Not only do they answer an account with a big question-mark over it, they stop spending time, effort, and money on it, which they had been unknowingly doing for the previous 40+ years.
A Proactive Approach to Managing Dormant Accounts
Not every matter is this unusual or complex but the outcome has meant that the funds can be better used going forwards. The financial institution is one of the many forward thinking organisations Estatetrace now works with who take a proactive approach to managing the integrity of customer data.
While it is not always possible to trace every customer or beneficiary, in this example, the financial institution has been able to protect themselves and maximise opportunity.