Heritage Bank CEO John Minz today alerted bank account holders to a change to the law that will see inactive accounts closed after three years.
Under a change to Federal legislation passed last November, inactive bank accounts can be closed and the funds transferred to the Australian Securities and Investments Commission (ASIC) if they have sat dormant for 36 months.
Previously this would have occurred after seven years.
Accounts are deemed inactive if there have not been any deposits or withdrawals taking place, excluding any interest payments from a bank.
The change will come into effect from May 31 this year.
Taxpayers Australia estimates the Federal Government could raise an additional $300 million in 2013/14 alone because of the reduced timeframe.
Account holders can reclaim their money back from ASIC, which will pay interest on the funds it holds, but critics say this can be a lengthy process.
Mr Minz said many people were unaware their money could soon be transferred out of their bank account just because of inactivity.
“There are many reasons why an account could become inactive,” Mr Minz said.
“Maybe it’s been set up for a child’s future education needs or has been put aside for a building project or a holiday.
“Whatever the reason, people need to understand that it only needs to be inactive for a much shorter period now – three years instead of seven – to end up being transferred into government hands.
“That’s not a long time, and creates a headache that no one needs in trying to claim that money back.”
Mr Minz said people should check all their bank account details and could avoid having their funds transferred to ASIC quite simply.
“Check your files and make sure you are aware of any bank accounts you might have sitting with any financial institution,” he said.
“All you need to do is make a transaction on your account before the three-year period of inactivity is up.
“Just withdraw or deposit $1 and the account is deemed to be active again.”
Heritage Bank is Australia’s largest customer-owned bank and was formed in 1981 from the merger of the Toowoomba Permanent Building Society and the Darling Downs Building Society.
In the South Burnett, it operates branches or agencies in Nanango, Kingaroy, Wondai and Murgon.
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