ALP “Reform” Encourages New Industry Of Financial Predators

Stories continue to emerge of Australians discovering that their “inactive” bank accounts have been emptied by our cash-strapped government.

In yet another unintended consequence of ALP policy, it appears this “reform” may have encouraged the start of a new industry — financial predators, who seek out those affected, and try to con them out of thousands of dollars for help in getting their “lost” money back.

More on that below.

First though, the latest headline example of how this government “reform” has taken the life savings of one Sydney man.

A common man who clearly did know how to balance a budget, and achieve a surplus.

Maybe “Leonard” should have been our PM.

From the Sunday Telegraph’s consumer affairs reporter, John Rolfe:

Leonard worked hard and saved diligently. Source: News Limited

Family’s anger as Leonard’s secret fortune claimed by government

THROUGH a lifetime of self-sacrifice, this humble carpenter amassed a secret seven-figure stash meant to benefit his children and theirs after he died.

Instead, the Federal Government has claimed the money through changes to lost-account rules.

At the time of his death last year, 88-year-old Leonard – his family asked that he be referred to by his first name only – had covertly accumulated an extraordinary $2.42 million. The hard way. There was no Lotto win. There was no inheritance.

Just scrimping – he serviced his 1992 Ford Laser himself until his passing. And saving – every spare cent of his Sydney Water Board wage was invested with care.

…

Leonard’s exceptional wealth – and parsimony – have come to light as part of News Corp Australia’s efforts to create awareness about Australia’s rapidly growing pile of unclaimed money.

More than $1.2 billion is currently declared “lost”, including $816 million from bank accounts.

The largest of the 277,000 lost bank accounts now in the hands of the Australian Securities and Investments Commission is Leonard’s. His family and its lawyer says ASIC shouldn’t be anywhere near the money.

About $450 million worth of bank accounts – including Leonard’s – only became “lost” in May, after the government changed the rules. Previously, an account had to be inactive for seven years. Now it’s three. The change netted Treasury additional revenue of $109 million.

“It’s ridiculous,” lawyer Ashley Smith said. “There would be hundreds of thousands of people who would have accounts that just sit there.”

…

A spokesman for Bernie Ripoll, Parliamentary Secretary to the Treasurer, said the government’s “reforms will help reunite Australians with their lost money sooner, and protect them from being eroded by fees, charges and inflation”.

“It is far easier for people to track down lost bank accounts once they are transferred to ASIC and added to the online database at the moneysmart.gov.au website,” Mr Ripoll’s spokesman said.

Leonard’s family sees it differently. If the seven-year rule was still in place the account would not have become lost in the first place.

Indeed.

Back in May this year, in comments to a blog on this issue (“‘I Call It Stealing’ – Pensioner Shock At Bank Savings Grab“), reader “Charlie” informed us of how the government’s cash grab has impacted him:

I have just discovered that an account I am trustee for has been emptied of over $120,000 by the federal labour government, in january this year…the statements only come twice a year and I mislaid the february one so did not see that the money had been stolen until yesterday! The trust I look after is a charity which looks after a church. How low and how wrong can the federal government get? Basically, federal labour plus Katter, Windsor, Bandt and Oakeshot voted it through late one night. Good on Wilkie for voting against it.
I will get it back- but when can it ever be OK to simply take money out of an account without signature and verbal permission?
I`m gobsmacked….they are a disgrace. A pox on the lot of them.

But there is another dimension to Charlie’s experience that’s worth noting:

no-one contacted me before taking over $120,000 out of a charity cash management account that I look after…No phone call, no signature. It simply disappeared over 6 months ago and i was not informed until a leach who wanted $7000 to get it back for me sent me a letter.

Unfortunately, “Charlie” did not respond to this blog’s request for further details.

If any other readers are aware of similar circumstances — in particular, of persons receiving unsolicited offers to help (for a fee) recover savings “lost” to the government’s cash grab — please let us know in Comments below.

Tags: ASIC, bank accounts, inactive accounts, lost accounts, savings grab