The full story is that inactive money is currently held by the banks and transferred to ASIC after 7 years of inactivity. The owner of the account doesn't lose their money, as ASIC advertises the details of all inactive accounts in an effort to locate the owners and return the money to them [1].
The new law changes the period to 3 years. As you can imagine, the banks are spitting chips, since they get 4 years less use out of the money.
One can argue that the change is good for people who have genuinely lost their account, as the inactive account gets visability sooner and is more likely to be reunited with its owner. It will be a nuisance for people who do want to leave an account untouched for a long time, as they will have to interact with the account every three years.
Rubbish. Under what circumstances does a government have the right to take money after 36 months of savings with no further deposits? Why does it apply to accounts within a bank where the customer is regularly transacting in other accounts at the same bank?
The customers were given one warning and a short period of time to respond.
So why change from 7 years to 3? What is the justification?
Why would anyone be making apologies for this? Ther is nothing, nothing reasonable about this?
This is even better for consumers and even worse for banks - no monthly account fees and automatically adjusting interest rates once the money is sent to ASIC.
If you shop around a little, you'll find banks in Australia that don't charge account fees. And I'm not convinced that ASIC will pay decent interest rates, since the government cash rate is lower than typical bank rates for deposits (again if you shop around a little).
I had an account confiscated -stolen -emptied - whatever you want to call it.
This was an e-trade linked account. They sent me a warning so I wet in and checked that it was active -login, checked the account, regular interest deposits, all good,there.
Wrong.
I had to make a personal withdrawal or deposit in order to 'activate' the account or it was deemed inactive. All because I haven't bought/sold anything for 3 years in that particular account ( though I have in other accounts in the same e-trade account)
Now I have to apply to a govnemrnt agency to get my money back, the wait time is 6 weeks plus.
It's absurd, shocking, disgusting.
In the news is a pensioner who had been saving up for medical bills. Goes into hospital for major surgery, comes out afterwards and finds all his saving gone $22k.
The inactive period is 3 years. In other words, since the LOST finale aired. It's not that long.
Most countries have a provision to seize unclaimed monies. But three years? What on earth is the justification? Because they can't balance a budget?
If the government came into your house and took any jewelry that you hadn't worn in three years, most people would revolt. But apparently. Only in the bank is use it or lose it. So much for savings being the necessary per-requisite for capital formation.
/rant
For what? The current treasurer and government disgust me.
I didn't realise that it applied to every account individually at a single bank. I'd have thought transactions through any particular account would be enough to show that none of the accounts are "lost". Any other activity such as logging in and checking the balance should be sufficient too. Otherwise, it seems that it's just a government cash grab.
Yes, any reasonable test of an active account for an online account should be a recent login. But that's not the test- you have to withdraw or deposit money. I suppose we could call it 'banking theatre'.
'dance, taxpayer, dance! Jump through these arbitrary hoops or we'll take your cash!'
To clarify, seizing of "inactive" funds already occurs -- the change next week shortens the timeframe from 7 years inactivity to 3 years. The money can be subsequently reclaimed through tedious paperwork. This is pretty standard stuff internationally speaking (U.S. seems to have a timeframe of 3-5 years depending on the state, U.K. is 15 years, Canada has a more generous timeframe of 30 years, or 100 years for amounts over a grand!).
The responsible thing for your bank to do would be to notify you at the 35-month period. Not much good if you don't keep your contact details up to date, but if it's something like a investment or trust account then that might be the one address you'd like to try to keep accurate. THIS DOES NOT CONSTITUTE SOUND FINANCIAL ADVICE, PLEASE FEEL FREE TO KEEP YOUR BANK STATEMENTS FORWARDING TO THAT EXPIRED P.O. BOX AT YOUR ALMA MATER
Seizing money out of a customer's bank account is really quite reprehensible. It's quite easy to imagine a situation in which someone has a savings account for a specific purpose that they have the discipline to not touch (e.g. an "oh shit" fund), and then suddenly find that money has been stolen one morning by the government. Indeed, I've had a number of savings accounts that have been for specific purposes that have neither grown nor shrunk, untouched for years because there has been no necessity.
The only situation I can think of in which it's somewhat ok for the government to raid a citizen's bank account is if the customer has been uncontactable for a number of years and cannot be found after a diligent search. Bar this, it's just theft.
> The only situation I can think of in which it's somewhat ok for the government to raid a citizen's bank account is if the customer has been uncontactable for a number of years and cannot be found after a diligent search.
"ASIC's Unclaimed Monies Unit regularly sends letters to people and companies whose names match our records."
There are also private companies (Dun and Bradstreet etc.) who scrape the records and try to contact owners for a finders fee.
I had money seized under this change. I did not receive a letter from ASIC. All I got was an email, which I skim-read and filed as being ok. There was two months from announcement to seizure. It is NOT ok.
Oh, well, that's a bit better. The article would have the reader believe that it's an automatic government seizure program and that the bank account holder only gets to find out their funds have been stolen when the money is already gone.
What happens when you are in prison or a coma for over three years? Once you are back, do you have to go through the several-month-long process recovery process? How do you pay the bills during that time? Do they pay you interest if you successfully reclaim the money?
There's no point but to utilise any reserves laying idle. There's essentially negative interest rates on a lot of these accounts. I don't have an Australian bank account, but someone I know who does discovered that her account pays no interest unless some transaction worth at least a dollar takes place once a month. With charges, this is negative.
Better on the governments balance sheet rather than the banks. What are the savers doing with it anyway it seems.
Yes, that's the whole point, 51% percent of the network would never have an incentive to do that.
If they did, it would destroy the value of the currency. Self-destruction with no benefit. If people lost trust in BTC there are competing crypto-currencies/state currencies. Destroying liquidity.
Yep, it happens. It's called escheatment [1] [2] [3]. Why the uproar? What's "supposed" to happen with accounts that have been abandoned (dead owner, no family/will/estate or whatever other scenario that could exist)?
But you'd think in that case that any sign of activity on the part of the owner would be enough to determine that they aren't dead. E.g., logging in to online banking or answering a phone call from the bank. Now with this new Australian regulation, I'll have to remember to put some activity through accounts that are just savings.
I'm Australian actually, and answering the question as an Australian (but maybe not a "real Australian", am I right?) about how I feel about Australia. Think of it as tongue in cheek if it makes you feel less offended.
How would you explain the countries self flagellation? I see a lot of these headlines from abroad and am pretty certain no-one is lifting a finger to help themselves. Is the bureaucratic process simply too big and complicated to navigate (it's not, btw), do people feel they don't have any power or what? The government doesn't have any right to that money, and '3 years' is just as arbitrary as many other ridiculous laws and policies recently passed and quantified with '(un)reasonable' or '(un)necessary' or 'x' number that the Australian government uses exclusively to service its own revenue deficit. Australians must just like being punished, I have no other explanation.
Is this a karma grab? This was doing the rounds online shortly after it was announced in February. Anyway it seems likely to only affect people who are wealthy enough to have large reserves of cash with nothing happening to it. When you think about it, most people only have 1 or 2 accounts. And these accounts usually have fairly regular activity occurring.
The full story is that inactive money is currently held by the banks and transferred to ASIC after 7 years of inactivity. The owner of the account doesn't lose their money, as ASIC advertises the details of all inactive accounts in an effort to locate the owners and return the money to them [1].
The new law changes the period to 3 years. As you can imagine, the banks are spitting chips, since they get 4 years less use out of the money.
One can argue that the change is good for people who have genuinely lost their account, as the inactive account gets visability sooner and is more likely to be reunited with its owner. It will be a nuisance for people who do want to leave an account untouched for a long time, as they will have to interact with the account every three years.
[1] https://www.moneysmart.gov.au/tools-and-resources/find-uncla...
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edit: spelling