The Co-operative Financial Services is pleased to announce that its application to establish a central Reclaim Fund for dormant account monies on behalf of the industry has been approved by the Financial Services Authority (FSA).
The new Fund will be known as Reclaim Fund Ltd, and forms a wholly owned subsidiary of The Co-operative Financial Services. It will operate independently with an appointed Board and Executive. The Fund will be run as a non-profit making organisation, and there will be no financial benefits to The Co-operative Financial Services administering the Fund. The accounts will be reported annually, with an additional report into Parliament every three years.
Following the authorisation from the FSA, Reclaim Fund is now ready to receive the initial tranche of dormant account monies from banks and building societies. These will be followed by further tranches as more institutions sign up to the scheme and periodical transfers in future years as and when accounts become dormant.
Reclaim Fund will then transfer any money considered surplus to that needed for customer reunification to the Big Lottery Fund, for onwards distribution to good causes, including for example the Big Society Bank in England.
It is important for bank and building society customers to be aware that they will still be able to reclaim their dormant account money, at any point in time. They should do this by getting in touch with their bank or building society as usual. Customers who think that they may have forgotten about an old account can also visit www.mylostaccount.org.uk, which provides a free service to help trace lost accounts.
Reclaim Fund will be operated in a prudent manner to ensure that there are sufficient funds available to meet any requirements for refund of dormant accounts. Banks and building societies will then interact with Reclaim Fund to claim back money needed to re-unify customers with their dormant balances.
Neville Richardson, Chief Executive of The Co-operative Financial Services comments: “As a trusted financial organisation, we have been delighted to step forward and offer our support to the Government and the industry in establishing Reclaim Fund. We do recognise the need for the fund and the benefits that it offers both the industry and wider community.”
Paul Mills, Executive Director of Reclaim Fund, said: “Our aims are very clear. While we will give as much money as possible to Big Lottery Fund for good causes, we will also be prudent in keeping back enough for customers who come forward to claim accounts they had forgotten about.
“I am very pleased that, after many months of careful planning and hard work on the part of my team, the financial institutions, including their trade bodies, and the Financial Services Authority, we are now ready to carry out those aims, as prescribed by the Dormant Bank and Building Society Accounts Act of 2008.”
Based on the current industry view that the amount of money that the Reclaim Fund will receive is around £400 million, it is estimated that the first distribution to Big Lottery Fund will be in the region of £60-100 million and will be transferred in phases over the next twelve months.
For further information please contact
The Co-operative Financial Services Press Office
Tel: 0161 903 3833
Reclaim Fund Ltd
Tel : 07715 480148
Notes to Editors:
•The Government’s Dormant Bank and Building Society Accounts Act received Royal Assent in November 2008. The Act enables banks and building societies to transfer money held in dormant accounts for reinvestment in the community and will provide account holders with a right to repayment.
•The fund will operate independently from the BBA, BSA and the Government. Banks and building societies estimate that there is about £400 million in dormant accounts, which will be eligible for transfer to Reclaim Fund.
•Full list of board directors as follows:
David Anderson (Chairman)
Paul Mills (Executive Director)
Adrian Smith (Chief Operating Officer)
John Hughes (Non Executive Director)
Tim Franklin (Non Executive Director)
Keith Alderson (Non Executive Director)
Bob Newton (Non Executive Director)
Adrian Coles OBE (Non Executive Director)
Paul Chisnall (Non Executive Director)
Pat Wade (Company Secretary)
About The Co-operative Financial Services
The Co-operative Financial Services (CFS) is part of The Co-operative Group, which is the world’s largest consumer co-operative with around five million members, over £14 billion turnover, and core business interests in financial services, food, travel, pharmacy and funeral care. The Co-operative Group has over 5,000 retail trading outlets.
Following the merger with Britannia Building Society on 1 August 2009, the new organisation is one of the largest and well diversified mutual businesses operating in both retail and corporate markets.
As part of The Co-operative Group, the new business is characterised by its unique ethical and member reward policies and very high levels of customer advocacy.
The combined business has £70 billion in assets, 12,000 staff and nine million customers. It has over 300 high street branches, 20 corporate banking centres and a major presence in Leek, London, Manchester, Plymouth, Skelmersdale and Stockport.
It is the only mutual organisation that enables its members to earn financial rewards for the products they hold, as well as giving them the opportunity to have a say in how the business is run.