Dormant Bank and Building Society Accounts Bill [HL]

moved Amendment No. 12: 12: Clause 10, page 6, line 40, at end insert— ““( ) Notwithstanding anything in subsections (1) and (2), a bank or building society must use its knowledge of its accounts, its account holders and any other relevant matters in determining whether an account is dormant.”” The noble Baroness said: My Lords, Clause 10 contains some technical rules on what is dormant. Subsection (1) defines what is dormant and subsection (2) defines what is not. In Grand Committee we probed the definitions with many examples of real-life situations where the technical rules may have been met. For instance, we raised the case of an account that would have been classified as dormant within the terms of Clause 10 although in reality it was not dormant. This includes cases where the customer has told the bank not to treat the account as dormant or where the customer does not want communications from the bank. If the noble Lord, Lord Monson, had been in his place, he would have explained that in the context of Amendment No. 11A. We also talked about family disputes where agreement cannot be reached on how trustees or executives can access accounts, so that although those accounts apparently remain dormant, they are not dormant. Some accounts exist merely to pay interest to another person but the capital is left untouched. I went through many other examples in Committee. The Government said that the banks would not treat those accounts as dormant, but the Bill would allow them to do so. As we are dealing with accounts that do not belong to the banks, it should not be for the banks to determine whether an account is dormant. We are concerned with the property rights of individuals who would be entitled to tell banks how they want to be treated; for example, if they never want their accounts to be treated as dormant within the context of the Bill. We have a fear that the banks will write computer programs to identify dormant accounts in accordance with Clause 10 or with other defined mechanical criteria. That is how computers work. This algorithm would be used to identify dormant accounts which would then be sent off to the reclaim fund. We want banks to use their common sense. That is all that my amendment requires. If banks have knowledge about the accounts or the holders or know any other relevant information, they ought not to treat the account as dormant. The existence of the reclaim fund does not deny people access to their money, but people may not want to go through the procedure of making a formal reclaim and possibly getting involved with a repayment claim in respect of the reclaim fund. As I explained in Committee, the covenant of the reclaim fund could well be considerably weaker than the covenant of the bank with which the account was held. So there is a very good reason why individuals may not want their accounts to be transferred for repayment purposes to the reclaim fund. This is a small amendment. It is designed to get thinking involved in the process of designating accounts as dormant and not allowing plain rules to drive the transfer of money into the reclaim fund. I beg to move.