Search Legislation

Dormant Bank and Building Society Accounts Act 2008

Section 1: Transfer of balances to reclaim fund

25.This section provides that a bank or building society’s liability to pay the balance owed to a customer in relation to a dormant account is extinguished where that balance is transferred to an authorised reclaim fund which consents to the transfer. This section will allow a bank or building society’s liability to a customer in relation to a transferred balance to be de-recognised under International Accounting Standards (IAS 39) and UK Generally Accepted Accounting Practice (“GAAP”) (FRS 26). Sections 6 to 10 contain definitions of a number of terms relevant to this provision, including “authorised”, “building society”, “bank”, “balance”, “account” and “dormant”.

26.Subsection (2)(b) gives the customer a legally enforceable right to repayment of their balance against the reclaim fund. The customer is entitled to the same right to repayment as they would have against their bank or building society had the transfer not taken place. It should be read subject to the provisions of section 8 which sets out the customer’s entitlement to interest (and permits the deduction of charges), and section 11, which explains the effects of events such as insolvency of the bank or building society on the calculation of the customer’s entitlement.

27.Subsection (3) makes it clear that the balances of deceased persons are within the scheme, and can be transferred to the reclaim fund under subsection (1) and reclaimed under subsection (2) by the people to whom the right to payment has passed.

28.The requirement that the reclaim fund must consent to the transfer of any balance enables the reclaim fund to ensure that suitable arrangements are in place to handle claims for repayment. It is expected that banks and building societies will agree to act as agents of the reclaim fund and continue to manage the customer relationship. The precise details of any agency arrangement will be a matter for negotiation between the bank or building society and the reclaim fund.

Back to top

Options/Help

Print Options

Close

Explanatory Notes

Text created by the government department responsible for the subject matter of the Act to explain what the Act sets out to achieve and to make the Act accessible to readers who are not legally qualified. Explanatory Notes were introduced in 1999 and accompany all Public Acts except Appropriation, Consolidated Fund, Finance and Consolidation Acts.

Close

More Resources

Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • correction slips
  • links to related legislation and further information resources