Preventing Dormancy

It might happen that when the account holder dies without leaving any trail of his contact details for a long time,specially in times of sudden death, the bank would try to establish contact with the client without violating secrecy law. Should the banks search turn into an unsuccessful one, it would wait for atleast 10 years to hear from the account holder. If this also fails, then the bank will change the status of bank account from 'active' to 'dormant' and special provisions apply. If the account holder had nominated a beneficiary on account of his death, then the assets held will be transferred to the named beneficiary. The descendents can also claim the 'dormant' assets if they know where exactly the assets were held and which bank. Normally bank would ask for some paper work like death certificate etc. of the account holder. Ironically, the real problem is, it is very difficult to locate a particular bank account, in switzerland as there are about 400 banks in switzerland. You cannot just simply walk into a bank and ask 'Whether this person X is having an account with you?'. There are a list of dormant account holder names published in www.dormantaccounts.ch

How to prevent your swiss bank account from becoming dormant?

[Courtesy : MTBI International, Zurich]

1. Change of Name & Address

Please inform your bank immediately if you change your address, or if you use a different name, e.g. following marriage.

2. Special Instructions

Inform your bank if you go away for an extended period of rime and arrange for correspondence from your bank to be sent to a third party or kept
at the bank during your absence.

3. Designating Proxy

It is generally advisable to designate a proxy or representative with full power of attorney who can be contacted by your bank should your assets become “dormant”.

4. Informing Trusted Persons

Another possibility to avoid dormant assets is to inform a trusted person about your bank details. The bank can only give information to such a person if you have first authorised him or her in writing to act on your behalf. You could also list your assets and the name of the respective bank(s) where they are deposited in your will.

Measures that banks can take in cases of dormancy

The Board of Directors of the Swiss Bankers Association has drawn up the following professional rules that Swiss banks are to follow in cases of dormant customer relations

1. Immediate Measures

As soon as a bank determines that mail sent by post to a customer cannot be delivered e.g. because of a change of address, then the bank will attempt with due diligence to discover thenew address. The bank can appoint third parties to investigate. Such third parties are of course subject to the same laws concerning confidentiality as the bank itself. Bank customer confidentiality is thereby preserved. The bank is also to follow special or other customer instructions within the framework of legislation and professional rules.

2. Measures to be taken when dormancy established

If the inquiries by the bank are unsuccessful or contact with the customer is not possible for other reasons, then the Swiss banks are bound by the professional rules laid down by the Swiss Bankers Association to proceed as follows: - register the customer’s assets centrally.

3. Continued rights in cases of dormancy

The customer’s rights remain intact even in the case of dormancy. Banks may only take action that diverges from the contractual agreement with the customer when such action is in the customers assumed interest. So, for example, current accounts and similar assets can be transferred to low-risk instruments such as savings accounts, mediumterm notes or unit trusts. Savings accounts will be continued as usual and interest paid at the bank’s valid rates. Commissions to administer assets are to be continued unaltered unless it becomes obvious that the investment aims are in conflict with the customer’s interests. For further details please contact your bank.

4. Costs & Fees

The bank’s usual debited costs and expenses also applyin cases of dormancy. Furthermore, the banks can charge the customer for costs incurred for their
inquiries as well as for the special handling and supervision of dormant assets. The extent of the bank’s inquiries must be guided by the principles of proportion and in particular be reasonable with the value of the assets in question.

Searching for dormant assets

To make a search on dormant assets held in accounts opened with Swiss banks by non-Swiss nationals or residents after May 9, 1945 please contact the Ombudsman of the Swiss Banks is an impartial source of information and an intermediary whose services are free of charge.

Swiss Banking Ombudsman
Schweizergasse 21
P.O. Box 1818
CH-8021 Zurich
Tel.: (011) 411 - 213 14 50
Fax: (011) 411 - 210 37 20

If someone suspects that he or she might be entitled to assets held by a Swiss bank, but does not know which one, a search can be initiated through the Contact Office attached to the Ombudsman. A search questionnaire can be obtained from:

Contact Office for the Swiss Banks
P.O. Box 1818
CH-8021 Zurich
Switzerland

http://www.dormantaccounts.ch
http://www.swissbanking.org
http://www.bankingombudsman.ch