Fears over the implications of a new law that would allow ’dormant’ bank savings to be given to charitable causes were raised in the House of Keys.

The Dormant Assets Bill makes provision for assets on customer accounts - which have been dormant for 15 years and where the bank has not been able to contact the account-holder - to be put into a fund, which would then distribute to charities.

But some MHKs were worried about the potential of the law’s scope being extended, while others wanted assurances about how hard a bank would try to contact an account-holder.

Moving the bill, Treasury department member Bill Shimmins (Middle) said it aimed ’to enable the proceeds of dormant accounts held by local banks to be transferred to a central fund and to then allow a proportion of the amounts transferred to be distributed to good causes in the island’.

He stated: ’The transfer of dormant assets to the central fund will be a last resort for assets whose owners cannot be traced.

’Customers’ rights are protected under the proposed legislation, as anyone whose dormant account transfers to the central fund will be entitled to reclaim it in full indefinitely.’

Similar schemes operated in other jurisdictions.

’Most dormant asset legislation applies to bank accounts,’ he said.

’Although this bill also focuses initially on the same dormant bank accounts, it is structured in such a way that additional dormant asset classes can be added through separate schemes, if future research identifies these and providing there is sufficient support and benefit from doing so.’

Alarm bells

But this set alarm bells ringing for some MHKs.

Clare Bettison (Douglas East) said: ’At present we are discussing only bank accounts and yet we are now seeing other jurisdictions exploring extension of powers to properties, policies and other assets.’

She was worried that the scope could be extended via a Tynwald order, which does not go through the same extensive scrutiny as primary legislation.

’I remain concerned about extensive use of secondary legislation and note there is also a provision for the definition of asset, balance, licence holder and even dormant through secondary legislation in Tynwald.’

She warned: ’These are big changes to make through secondary legislation.’

Ann Corlett (Douglas Central) was worried about how hard banks would try to contact account-holders when funds were set to be transferred out.

’Some of these accounts will be money which people have put away for a rainy day and think themselves fortunate not to have had to delve into it,’ said Mrs Corlett.

’I have an account that was opened for me by my parents when I was born. It has been added to over the years but I have not touched that account in the last 20 years.

’It is not a lot of money but it is my money and I know it is there if I need it.’

She added: ’I can find nothing in this bill that dictates that a bank has to inform a holder of a dormant account that their account will be closed and their money transferred to the dormant assets fund.’

Accounts

Responding to the concerns, Mr Shimmins, a former head of Isle of Man Bank, said it had been ’deliberate’ to structure the bill in such a way that, while at present it would deal with bank accounts, the scope could be widened in future.

The Treasury was monitoring what was happening in other jurisdictions but the idea was to take things ’one stage at a time’. He promised a consultation ahead of any move to widen the remit.

On contacting account-holders, he said banks were already required to carry out due diligence on their customers.

’So they have written out a number of times to customers requesting - sometimes to customers’ irritation - confirmation of identity and address,’ he explained.

’Generally banks have a file and they will have processes by which they seek to discharge their responsibilities - which they take very seriously - to contact their customers.

’They do not want to be transferring lots of customers to the dormant asset fund only for them to turn up in future.’

Members approved the principle of the bill and gave it a second reading. It will now undergo detailed scrutiny at the clauses stage.