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Unclaimed Lost Shares, Bank Accounts and Life Insurance Hits $1Billion
The Treasury of The Australian Securities and Investments Commission (ASIC) has issued a discussion paper questioning whether existing unclaimed monies laws achieve their intended aims as the currently unclaimed lost shares, bank accounts and life insurance totals around $1bn.
What are the current laws?
The period after which an account is be considered inactive was formerly seven years; however, the previous government amended the time frame to three years.
Annually by 31 December, banks, building societies and credit unions must transfer to the government all ‘inactive’ accounts that have not had a transaction other than interest accrued or fees deducted for three years or more.
Life insurance companies must also transfer to the government all sums of money payable on the maturity of a policy which are not claimed within three years of the maturity date.
The Treasury paper explores whether the current arrangements strike an appropriate balance between re-uniting people with their money and the regulatory costs imposed on account holders and industry.
The paper also outlines advantages and disadvantages for three options: the current three years, five years and seven years.
Which accounts are exempt?
Certain accounts from the change in time period, such as children’s accounts, which remain at seven years and term deposit accounts, which are exempt.
Account holders can notify their bank or other institution that they are aware of the accounts and do not want them to be considered inactive, which can be done by interacting with the account provider online or over the phone, which is enough to ensure that the account is not deemed to be unclaimed under the provisions.
You can search for unclaimed money held by ASIC using MoneySmart’s unclaimed money search tool.
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