News & Views - Savantor

Banks making the most of your “lost” money

Thursday, 15 February 2007

Interesting to see that some UK Banks are trying to gain credit points with customers by jumping the gun on the Government initiative to release funds in unused accounts for charitable purposes.  HBOS has launched a publicity drive to attempt to find the owners of cash in dormant accounts.  The move coincides with the banking sector facing claims of greed following increased profits and warnings of impending account charging.  The HBOS campaign is aimed at the owners of approximately £50m in dormant accounts.  Whilst many dormant accounts have a balance of less than £100 the nationwide estimate is that there is around £400m in such accounts.  LTSB and Barclays are estimated to have anything up to £100m each in dormant accounts while HSBC is thought to have around £30m.  The dormancy issue does not just affect current and deposit accounts as many credit card accounts also lie dormant and the problem with all of these accounts is the cost of maintenance.  It is estimated that on average 18% of any credit card portfolio is dormant and worst case scenarios this figure has been as high as 35%.

Costs are still incurred for these accounts; the minimum being processor account residency fees but can also include the wasteful production of statements and plastics and the unnecessary inclusion of these accounts in advertising mail shots.  The move to Chip and PIN has further increased operational costs and has probably resulted in the reduction of cards in customer's wallets and an increase in dormant accounts.  The cost of attracting a new customer is estimated to be in the region of £130 whilst re-activation through this process can be achieved at a fraction of this cost.

So whether it is current/deposit accounts or credit cards there are costs to be saved as well as PR points to be gained by conducting a clean up exercise on dormant accounts.  If you are interested in discussing this further contact us on

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