ASIC to claim $109 million from dormant bank accounts.

Bank account holders are being urged to withdraw money from their dormant bank accounts.

Recent changes to the law have brought the period for a bank account to be labelled inactive from 7 years, down to just 3 years. Once an account has reached 3 years of being untouched by the owner, the money in the account will be handed over to ASIC (Australian Securities and Investment Commission.) Account owners who have not accessed their accounts in close to 3 years are being urged to withdraw as little as $1 to prove the account is still active. Failing this, from the 31 May this year, money in the account will be claimed by ASIC.

The legislation, which is expected to raise almost $109 million for the Australian government this financial year, has been accused of being rushed through parliament and has been been opposed by the finance industry, according to the Financial Review.

"I think at the time it was very much seen as revenue by the government and they would count that money towards achieving a surplus that they hoped to achieve at the time," said Australian Bankers Association chief executive Steven Munchenberg.

Many Australians are expected to be caught out by the new law. Last year the government said it expected to raise almost $760 million from unclaimed accounts that had been untouched for more than 7 years. A press release by the Parliamentary Secretary To The Treasurer in November 2012, said that account owners overlooking minor details such as updating their address was one of the reasons that an account could appear unclaimed. However, under the new legislation, the government would pay interest on lost money to preserve its real value until it could be reunited with its owners.

Once account funds have been claimed by ASIC, account owners will need to visit ASIC's MoneySmart website and follow the instructions from the 'Claim money back from bank accounts' page, that will require a record of the original transaction number. Bank account owners will also need to inform their bank that they wish to reclaim the funds, according to the MoneySmart website.

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