OPINION/Bill Murdoch: Consider the following apparently diverse scenarios. First, receiving a letter telling you about money you own and didn't know about. Second, receiving a letter demanding money you didn't think you owed. The deadlines for execution are looming.
The recipients could well be different. But there is a common thread: the banking fraternity. The first scenario should, perhaps, conjure up idyllic images of silver sand, tropical sun et al? Forget it. Only €150 million of the €400 million in dormant accounts has, so far, been reactivated ahead of the March 31st deadline. After that the funds go to the National Treasury Management Agency (NTMA) and claims to that institution could take two months to process in what would be a very messy procedure.
So are banks and other financial institutions doing sufficient to encourage depositors to come forward and claim what is rightfully theirs?
One bank, Ulster Bank, does not seem to make a claim easy. This columnist received a notification of such an account last summer and asked for a statement. That request was ignored. A subsequent request last month to reactivate the account with a transfer of funds, could only be possible with the physical presence of the depositor at the branch with concrete evidence of identity, I was told.
Does this mean that depositors in Australia would have to travel (not likely for such a small amount) or abandon their accounts? And would these sort of barriers account for the minimal take-up? A spokeswoman from another bank takes a less rigid approach. According to her, a letter and a copy of a utility bill would be sufficient to reactivate the account.
Statistics from individual banks, following specific queries, are revealing. Ulster Bank did not respond but the other banks were upfront with the figures. AIB, for example, has had 13,600 accounts reactivated (or reclaimed) with total deposits of €12.5 million. That's an average of €920, not enough for those idyllic beaches! But there are still 122,100 outstanding dormant account holders who are owed €35.2 million, an average holding of €288. Of particular interest is the fact that this indicates that a whopping 90 per cent of such accounts are still dormant.
Bank of Ireland's figures are equally revealing. It has had 8,650 reactivated accounts, up to this week, with a total balance of €8 million. That works out at an average of €925. But it still has 170,000 outstanding account holders owed €38.5 million - an average €227. But why are 95 per cent still outstanding?
The other bank contacted was Permanent TSB and it appears to have been far more successful in unearthing the owners of dormant accounts. The average account balance is also higher, reflecting the greater savings bias. Some 8,000 accounts have been reactivated with a total of €8 million (average €1,000). There are still 14,000 accounts outstanding with a value of €23 million (average €1,643) and they represent 64 per cent of the total; still a high figure, but much better than the two main banking groups.
Clearly, the financial institutions need to make a greater effort to have more of these accounts (the obligation is to reveal €100 and over) reactivated. It is imperative that the right people receive the deposits and banks do appear to have tried to contact the dormant holders. One senior banker said 20 per cent of the letters sent out by his bank were returned. But one suspects the approach is not proactive.
A statement issued by the Irish Bankers' Federation and the Irish Mortgage & Savers Association said: "Institutions are required to make reasonable [my italics] effort to contact the account holders." That is hardly a go-go statement. Why not a directive to pursue with vigour and explore all avenues? The answer is because that would be expensive.
The second letter is, of course, more chilling as it came with a demand from the Revenue Commissioners. The recipients were told they were "highly likely" to have used bogus non-resident bank accounts to hide money from the Revenue in those distant and often forgotten years, as far back as the 1970s. Wow! They have until March 27th to avoid prosecution.
There are many sad cases and some will be found to be not liable. But don't forget - people who did not pay their just taxes put an extra burden on the conformists. They should be pursued with vigour. But what about the suggestions that it will take decades to collect? Let us look at the facts.
The first missive was last October, when 30,000 leaflets were sent to 13,500 potentially wayward account holders. Then last month 40,000 were sent to 21,500 account holders and there are more in the pipeline. The former are being processed without any visible strain, say Revenue sources.
Is that contention credible? Look at the figures. According to the last Revenue annual report, there are two million PAYE and 366,000 self-assessment taxpayers. Those account holders would only represent about 1 per cent of the total so it would be ludicrous to suggest that these tax demands might place a crippling demand on the system, and backs up the tax inspectors' contention that these pursuits are manageable.
That is reassuring as the efficient operation of the tax collection system is paramount. In its declared customer service standards, and results for 2001 - its last annual report - showed that, in general, correspondence replied to within 20 working days went up from 89 per cent to 91 per cent, against a target of 100 per cent.
That's pretty good but of concern must be the statistic about repayments of tax to taxpayers: only 34 per cent were refundable within 20 working days compared with 41 per cent in 2000, and a target of 80 per cent. Clearly a long way to go.
