Thousands Of New Zealand Bank Accounts Closed, Funds Reclaimed By Government
Wellington, New Zealand – A growing number of Bank accounts across New Zealand are facing closure as financial institutions grapple with a surge in dormant accounts. These closures result in unclaimed funds being transferred to the Inland Revenue Department (IRD), sparking concern among account holders.
The Scale Of The Issue
Every year, Banks in New Zealand identify and process accounts that have remained inactive for a specific period. According to the Unclaimed Money Act, any account with no customer-initiated transactions or interaction for five years, and holding over $100, can be deemed dormant. The funds from these accounts are then transferred to the IRD.
A concerned citizen, who wished to remain anonymous, recently expressed frustration after receiving a notice from their bank regarding the impending transfer of funds to the IRD. “My brother, my wife and I are diligent taxpayers,” he stated. “to have funds from our accounts treated this way feels unfair.”
Bank Actions And Account Closures
ANZ, New Zealand’s largest bank, reported closing an average of 1700 accounts per quarter since October 1, 2024, with the majority being transactional accounts. Though,the bank noted that the volume of funds handed over to the IRD has been decreasing as 2023. An ANZ spokesperson explained the bank’s efforts to prevent account closures.
“We proactively contact customers using available contact details, urging them to reactivate their accounts thru various channels-mobile app, internet banking, phone banking, or by visiting a branch.”
Other banks, including ASB and Westpac, confirmed similar procedures.ASB emphasized its commitment to contacting customers before any transfer. Westpac reported 1336 transfers this year, down from 2576 last year and 2777 the year prior.
The Role of The Inland Revenue Department
Currently, the IRD holds over $600 million in unclaimed money. After 25 years, if the funds remain unclaimed, they are transferred to the Crown. The IRD provides a publicly accessible database where individuals can search for unclaimed funds and initiate a claim. Furthermore, the IRD actively tries to identify potential owners and will send out letters inviting them to submit a claim.
an IRD spokesperson clarified, “Claims are processed throughout the year, and we do not utilize Artificial Intelligence to identify account owners.”
Bank Account Closure Statistics – A Comparison
| Bank | Transfers This Year (2024/2025) | Transfers Last Year (2023/2024) | Transfers Two Years Ago (2022/2023) |
|---|---|---|---|
| Westpac | 1336 | 2576 | 2777 |
| ANZ | 1700 (average per quarter) | Not Available | Not Available |
| ASB | Relatively Small (number not disclosed) | Not Available | Not Available |
Did You Know? New Zealand’s Unclaimed Money Act aims to reunite funds with their rightful owners, but many remain unclaimed due to a lack of awareness.
Pro Tip: Regularly review your bank accounts and update your contact information to avoid having your funds transferred to the IRD.
Understanding Dormant Accounts: A Long-Term Perspective
The practice of reclaiming dormant accounts is common in many countries as a way to manage unclaimed financial assets and return them to the government. This ensures funds are not indefinitely held in inactive accounts, and can be used for public benefit. However, it also highlights the importance of maintaining awareness of one’s financial holdings.
Financial institutions are obligated to make reasonable efforts to locate account holders before transferring funds. This typically includes sending letters to the last known address and attempting contact through other available channels. Though, if contact information is outdated or the account holder is unresponsive, the funds may eventually be transferred.
The rise in dormant accounts may also reflect broader trends such as population mobility and the increasing complexity of financial lives. Individuals may open multiple accounts over time and forget about older ones, or may move and fail to update their contact information with their bank.
Frequently Asked Questions About Unclaimed Money
- What is considered an inactive bank account? An account with no customer-initiated transactions or interaction for five years, and holding over $100, is considered inactive.
- How can I find out if I have unclaimed money? You can search the IRD’s database online or through your myIR account.
- What happens if I don’t claim my unclaimed money? If unclaimed for 25 years, the funds are transferred to the Crown.
- Can Banks use AI to find owners of unclaimed Money? No, the IRD currently does not utilize artificial Intelligence to identify account owners.
- What should I do to prevent my account from becoming dormant? Regularly review your bank accounts and update your contact information.
Are you concerned about the security of your bank accounts? What steps are you taking to ensure your funds remain accessible?
Do you think the five-year inactivity threshold is a reasonable timeframe for declaring an account dormant?
Share your thoughts in the comments below.
