Thousands of unclaimed bank balances amounting to millions of dollars, with sums in these accounts ranging from just over $500 to nearly $2 million, are to be remitted to the revenues of the government if they remain unclaimed.
The names of the accounts held at Scotiabank and Citibank were published recently in a major newspaper, and reports indicate that significant numbers of unclaimed balances are held in other deposit-taking institutions, including the country’s largest commercial bank, National Commercial Bank (NCB).
Although dormant accounts are not defined in the Banking Act, the Act imposes certain obligations on banks and the Minister of Finance with regard to “unclaimed monies”.
Under section 16 (1) subsections c (ii) to (iv), banks are required to submit to the Bank of Jamaica an annual report on: All debts payable by the bank in respect of which no transaction, or statement of account has been requested/acknowledged by the creditor for a period of seven or more years; unpaid cheques, drafts or bills of exchange outstanding for seven or more years; and dividends remaining unpaid for over five years.
This information is forwarded by the Bank of Jamaica to the Minister of Finance to facilitate his discharge of responsibilities under Section 40 of the Act.
Section 40 of the Act requires that where “any monies have remained unclaimed in the possession or under the control of a bank for a period of 15 or more years,” the minister shall publish in at least one newspaper, and arrange publication in the Gazette, the particulars of such monies and indicate that unless a claim is established within a year of publication, such monies “shall lapse and become part of the revenues of Jamaica, and the Accountant General shall keep a record of all such monies. Where a claim is subsequently established, the Accountant General will pay that claim”.
The governing statutes in relation to building societies (The Bank of Jamaica [Building Societies] Regulations, 1995) and licensees under the Financial Institutions Act, contain similar provisions to those of the Banking Act in relation to unclaimed monies.
Interest in the issue of “unclaimed bank balances” or dormant accounts have arisen since the recent publication of what appears to be a record number of such accounts.
Responding to questions from JIS News, Scotia Bank’s Chief Financial Officer, Jacqueline Sharp, explained that the status of these accounts “may be due to various reasons, including death and migration”.
“In the cases of death, the Estate is entitled to claim the balances on the deceased’s account. However, if the account is held jointly with another person, then the funds belong to the surviving account holder, in which case the deceased’s Estate would not be entitled to claim the balances,” she explained.
She further noted that the bank sends out notices to account holders on various occasions once the accounts become inactive, and advise them “to come in and acknowledge the accounts”.
With respect to the funds of a deceased individual account holder, all assets to which legal claim can be established usually become part of a deceased person’s estate, subject to any legal encumbrances. However, if such monies held in a bank are unclaimed for the periods stated in the Banking Act, they would be dealt with in accordance with the law. In such cases, it would either be a surviving joint account holder or the Executor of the estate of the deceased account holder, who would then make the claim to the Accountant General in relation to those funds.
Director of Financial Institutions Supervisory Division of the Bank of Jamaica, Elise Douet, explained that although the Central Bank does not at this time have a legal mandate for consumer protection, in the interest of public information and transparency, “the Bank of Jamaica publishes, on a quarterly basis, in the newspapers and on its website, information on bank assets and liabilities. Since January 2011, the Bank has also commenced publication on its website, data on fees and charges of commercial banks, inclusive of dormancy fees”.
Recently, the Jamaica Bankers Association (JBA) indicated that it is developing a Voluntary Code of Conduct, which will establish minimum standards for disclosure in relation to fees and charges, notice periods for introduction of new or increased fees, fee review frequency, and on-going customer awareness. This is expected to be developed by the end of the first quarter of 2011.
The Bank of Jamaica has also proposed that an Enforceable Code of Conduct addressing these and other matters, be incorporated in financial legislation amendments currently in progress.