Banks fail to find owners of inactive accounts

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Banks fail to find owners of inactive accounts

Local banks only managed to return a small amount of inactive investment funds to customers.

According to Rep. Kim Jung-hoon, chief policy maker of the ruling Saenuri Party, 16 local financial institutes gave back to customers 30.5 billion won ($25.4 million) they were holding as inactive investment funds. These accounts have not been touched for five years or more.

At the beginning of last year, a total of 247.6 billion won was found in inactive funds and the banks were supposed to track down the owners and return their money. The 30.5 billion won returned represents 12.3 percent of the total. The banks were able to find owners of 332,286 accounts, which is 2.3 percent of the total of 1.48 million.

Suhyup Bank only returned 1 million out of 294 million won it was holding, the least among local banks. Nonghyup returned 260 million won, or 0.6 percent, of 40.9 billion won. IBK only managed to give back 180 million won, or 0.8 percent of its total.

“We are doing various things to find the account holders, but it is very hard to find them since addresses and other contact information often changes,” said a representative of Suhyup.

“80 percent of inactive account holders have less than 10,000 won in their accounts,” said an official at Nonghyup. “It is difficult to return the money since it is so hard to get in contact with them in the first place.”

Kookmin Bank, on the other hand, returned 15.9 billion won, or 40.2 percent of 39.4 billion won, the most among local banks. Standard Chartered gave back 40.2 percent of its total. Woori Bank and Citi Bank returned 10.6 percent and 10.2 percent, respectively.

Inactive investment fund owners receive interest based on the financial products they signed up for, regardless of whether they are active or not. However, if the investment program expires, they may not even get the principal back.

Local banks run campaigns to track down inactive account owners but usually they simply put posters in branch windows. The Financial Supervisory Service (FSS) asked banks to run campaigns in December and January but only Shinhan and IBK did so.

“We do not have a right to tell banks what to do,” said a representative for the FSS.


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