'Inactive' accounts at risk of federal government raid
HERITAGE Bank chief executive officer John Minz has issued a warning to bank account holders about a legislative change that could now see the Federal Government seize control of their funds if their account has been inactive.
The legislation which comes into effect on May 31 will mean "inactive" bank accounts can be closed and the funds transferred to the Australian Securities and Investments Commission (ASIC).
Accounts are deemed inactive if there have not been any deposits or withdrawals, excluding any interest payments from your bank, after three years.
Previously, accounts were deemed "inactive" after seven years.
Taxpayers Australia estimates the Federal Government could raise an additional $300 million in 2013/14.
Account holders can reclaim the money back from ASIC, which will pay interest on the funds it holds, but this can be a lengthy process.
Mr Minz said many people were unaware that their money could be transferred out of their bank account just because of inactivity.
"There are many reasons that an account could become inactive," Mr Minz said.
"Maybe it has been set up for a child's future education needs, or has been put aside for a building project or a holiday.
"All you need to do is make a transaction on your account before the three-year-period of inactivity is up."