Millions in the bank: is it yours?

By TONY STICKLEY

The tax department is trying to give away millions of dollars which has been sitting abandoned in bank vaults for years.

One couple are owed nearly $60,000, which they have not claimed despite efforts to find them.

The $2.6 million the IRD wants to hand back belongs to more than 4000 people who have forgotten they have money sitting in bank accounts or with other financial institutions.

Under the Unclaimed Money Act 1971, holders of unclaimed funds such as banks and insurance companies are obliged to make a register and try to trace the owners after six years.

If they cannot be found, the money has to be paid to the Inland Revenue Department, which puts it into the Consolidated Fund for the public good.

But the IRD is still trying to give the money back to its rightful owners and has put the names of the 4113 people on its website (below), along with the amounts they are owed - on average, $645.

Typically, dormant bank accounts, term deposits which fall due and unclaimed insurance proceeds come within the act, although unclaimed cheques or wages also feature.

Savings accounts become unclaimed funds only after staying untouched for 25 years.

The issue arose at the High Court in Auckland this week, where the IRD was trying to get $494,000 from travel firm Thomas Cook.

The $494,000 represents money received by Thomas Cook before 1993 from people in New Zealand for the issue of international drafts, which were then sent overseas, but which have never been presented.

The drafts were to be drawn on overseas banks where Thomas Cook had accounts.

Steve Bonnar, representing the IRD, told Justice Robert Chambers that, as the money was unclaimed, Thomas Cook was liable and the funds should revert to IRD coffers.

But Thomas Cook, represented by Geoff Harley and Kristin King, maintained that the money belonged to Thomas Cook (NZ) Ltd and the Unclaimed Money Act did not apply.

At no time was there a debtor-creditor relationship between Thomas Cook and the payee named on the draft.

The sum was only owing and payable once the draft was presented, Mr Harley said.

As the drafts had not been presented, the disputed amount could not be treated as unclaimed money under the act.

But Mr Bonnar pointed out that that argument meant that logically, the unclaimed money would never be payable.

"The money held by the defendant [Thomas Cook] is money to which it has no legal or moral claim. Those moneys do not compromise and should not be regarded as a potential revenue source for the defendant," he said.

Justice Chambers reserved his decision on whether Thomas Cook could keep what he referred to as "pure windfall."


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