I have never once closed a bank account, but have merely left them with no money. None of these were registered at my current address. As the banks will probably start charging me for them within the next year or two, thanks to the financially incompetent inevitably getting penalty charges declared illegal, I need to ask how do I go about finding out what happened to them? Experian turns up nothing. This goes back decades.
(I am a UK based doper)
They would all have their own internal procedures. It certainly isn’t a rare thing. Lots of people have bank accounts that haven’t seen any activity in 4 decades. Just guessing from working with roughly similar IT systems and business procedures, I am sure that they either close them themselves or just leave them alone. New policy implementations always have a team of people that runs the queries and looks over the implications to see how much of this stuff is out there. I highly doubt they are going to start hitting you with fees for very old accounts.
If the accounts had any money at all left in them, the money was probably turned over to the state after a period of inactivity. There are websites to help you reclaim your money and a very significant percentage of people have some waiting to be reclaimed.
I don’t know how the UK banks operate, but in the US, if they were ZBA (zero-balance accounts) then the bank wil just close them after a certain period of dormancy. Exactly how long, and and how many times they need to try contacting you depends on what state the account is in.
If you’re really concerned what’s happening to your accounts with nothing in them, contact the banks and ask them.
Huh? I’m trying to parse this, and best I can figure, you’re describing yourself as a financial idiot and will attempt to have bank fees declared as illegal. Good luck.
A bank turn money over to the state? Not likely!
When I worked for a large banking company, they had a special way of keeping hold of this money. State law required accounts inactive for five years to be turned over to the state, who attempted to locate the owner. So the bank instituted a fee, for accounts that had been inactive for four years.
At the end of the 4th year, they charged that fee to the account. So now there was a transaction on the account, so it was no longer ‘inactive’, so they did not report it to the state. And they continued this every year, until the remaining account balance was entirely used up. It was only a small fee, so it might take decades to get all the money from the account. But the bank was patient, they knew they’d get all the money eventually.
I don’t have any reason to doubt your particular experience. However, I am a consultant/business systems analyst that has designed and implemented many similar processes in financials and the supermarket industry. There tends to be a persistent urban legend that such companies want to screw consumers in small ways. While that is remotely possible given the universe of companies out there, I have never seen it. Most companies avoid it like the plague because the upside is way smaller than the downside in any competitive industry (the supermarket industry tends to be plagued by such rumors and the idea that it is a razor thin market industry which is almost totally untrue but I will leave that for another day).
There isn’t one Scrooge McDuck in big companies telling the underlings how to screw consumers. It is teams of people that I often sit on. Every decision like this has people asking each other the how’s and why’s of it all and suggesting some initiative that will just screw people for little justification or strategic business reason will probably have you walked out the door that day. Things just don’t work that way.
Banks do turn over inactive accounts to the state with remarkable regularity. Every older relative that I have done an unclaimed funds search on has had something turned over by a bank or other financial institution.
In the UK there have recently been numerous challenges to bank penalty fees for things such as bounced cheques and exceeded overdraft limits. Recently a man successfully claimed back almost £36,000 in fees in an out-of-court settlement.
The argument that I think Cryptoderk is making, is that if banks can no longer charge penalty fees to people who regularly try to spend money they haven’t got (which I think is a fair indicator of “financial incompetence”), then they will seek to make money in other ways, one of which may be charging an annual fee for bank accounts.
I would disagree that companies don’t try to screw people in small ways. In fact I just completed a research paper exploring the myth of companies screwing people “big time.” Sure there are examples like Enron and WorldCom but those are rare and tend to be exposed quickly.
I found hundreds literally hundreds of companies using small things like charging fees “to lease” phone rings, when they sell them outright cheaper. Banks in particular are notorious for charging fees for everything. Dormat account fees were found in the five banks I looked at. Even in Chicago the CTA is able to keep tens of thousands of dollars from rider cards that cannot be used. "An example of this is when you close an account your balance is good for a set time, then it expires. But if you closed your card and it happens to only have $1.00 on it or 5¢ it matters not since you can’t add to it nor will they issue you a refund. I tried in fact.
This is a real hassle but companies in my conclusion have found mass profits from the small charges that people hate but would never bother to DO anything about. I could give you nearly a thousand examples of small under $1.00 fees companies charge.
I got the idea for the paper ironically from my own experience, I had a “totally free” checking account. Then my bank merged, and the new bank had a “totally free” account to, but like a dope I didn’t look and the new bank put my “merged” account into one that charged fees. I lost a $35 fee during the changeover, that I could never get refunded.
If you’re not finding companies using small fees to gouge you, you simply are not looking in the right place.