While Germany is trying to make major budget cuts, billions of euros are silently sitting in banks and other financial institutions, unused and unnoticed in so-called forgotten accounts.
A 2021 report from the country’s Research Ministry estimated that up to €4.2 billion ($4.9 billion) was in such accounts. Other estimates are much higher, some as high as €9 billion. The banks themselves haven’t released any figures.
As people get older, have multiple accounts or die, relatives and heirs have a hard time identifying accounts.
Online banking, with no paperwork or printed statements, makes it more difficult because the information is locked up in email accounts or on hard drives. Non-traditional financial assets like cryptocurrencies or NFTs are even harder to keep track of.
What is an abandoned account?
Sticking to traditional financial assets, abandoned, forgotten or dormant accounts are simply bank deposits or securities, such as stocks and bonds, that remain untouched for a period of time.
In Germany, there is no official definition of abandoned accounts, and they can remain inactive for years.
This lack of a legal framework has left the matter to the banks themselves, but most banks take the following into account:
- The account holder has died, and no heirs can be found.
- There has been no customer contact for years.
- Postal mail is returned and other contact data is outdated.
This also leaves banks wiggle room in how much they invest in searching for owners or heirs. One big hurdle is the country’s strict data protection rules.
How to find abandoned German accounts?
In Germany, dormant accounts do not become the property of banks or get handed over to the government. Banks must keep these accounts indefinitely, and ownership — whether by the original owner or their heirs — never expires.
The German government can only claim an account if they are declared heir under the country’s inheritance law, not under any unclaimed property regulations.
The biggest measure needed is a central dormant account register that can be used to determine if someone held accounts somewhere, says Beatrice Eisenschmidt, a board member at VDEE, a Berlin-based association that represents professional heir finders.
Today, inquiries must be sent to various banking associations, a process that takes time and money. For heirs, it is usually a shot in the dark without knowing if there are any assets at all.
“For this reason, many heirs choose not to pursue these inquiries,” Eisenschmidt told DW.
Attempts to create a national registry
Nearly a decade ago, Norbert Walter-Borjans, then finance minister of North Rhine-Westphalia, the country’s most populous state, estimated that about €2 billion ($2.2 billion at the time) was held in dormant accounts across Germany.
He called for a national registry of dormant assets, and several attempts have been made since then.
The current federal government, headed by Chancellor Friedrich Merz, has come up with draft legislation to create a central, publicly accessible online register where heirs can search for information. But so far, no new regulations have been passed.
What to actually do with the money is still up in the air.
A recent survey commissioned by charity SOS Children’s Villages found that 86% of people would like to see forgotten bank assets flow into a fund for social projects after a reasonable amount of time, while only 8% think it should go to the government and 2% think the banks should keep it for themselves.
Abandoned accounts: Always retrievable in some countries
In the UK, dormant accounts are transferred to a reclaim fund, not the government, typically after 15 years. The fund is meant to support social and environmental projects. But the money can be reclaimed indefinitely.
Ireland has a similar time frame, but there the money is transferred to the treasury, which also uses it for social projects. Institutions are obliged to publish a notice in two national newspapers before a transfer takes place. Still, there is no time limit on reclaiming accounts plus interest.
In the US, abandoned accounts are regulated by state laws. In most cases, an account is considered dormant after three to five years of inactivity. After that, the bank must try to contact the owner.
If no one is found, the state — usually the state of the owner’s last known address — takes custody of the account. It is then held in an unclaimed property office, some of which publish public notices. In most cases, owners can reclaim the property indefinitely.
Abandoned accounts: Some countries keep the cash
In France, banks must attempt to contact owners, but after 10 years of dormancy, accounts and life insurance policies are moved to a public financial institution, the CDC.
The government provides a searchable database, but does not actively search for account holders. The funds become the property of the French state 20 years later and can no longer be reclaimed.
Switzerland, known for its special banking rules, has taken a similar, if longer, route.
In the Alpine nation, banks are expected to preserve assets and continue managing dormant accounts in the clients’ best interests. To help owners, the country has a centralized database for such accounts.
After 60 years of no contact, information on the accounts is published, and heirs have one year to claim them. After that, claims lapse and the account is liquidated and transferred to the government, including the contents of safe-deposit boxes.
Keeping financial records up to date and sharing them with family may be a hassle, but it could mean the difference between a well-managed inheritance and money sitting in a forgotten account.
Edited by: Andreas Becker
