Banking relationships are usually of a long-term nature, and can extend over very lengthy periods of time. It is not uncommon for banks to lose contact with a customer. The action that banks must take in such instances and what happens to the assets in question is already strictly regulated in Switzerland. A possibility exists to search for dormant assets through the Banking Ombudsman. Since January 2015, there is a new legislation in place according to which banks must publish assets for which the last contact to the customer dates back 60 years and more on an electronic platform. If, after publication, a further year passes without customer contact, the assets are then transferred to the federal government.
Moving to another country, a death, the closing of a company – there are any number of situations in which a person can forget to update the bank of important information relating to changes to an account.
Losing contact with a customer is something that can happen at any bank anywhere in the world. In Switzerland, there are clear rules dictating which measures a bank must undertake in such cases, but also what customers and their heirs can do in order to find their assets.
Guidelines for the treatment of dormant assets have been in place in Switzerland since 1995. These broadly govern the treatment of such assets and were approved by FINMA, the Swiss supervisory authority. Adherence to these guidelines is subject to ordinary audit procedures according to banking law. The guidelines have now been reinforced through a revision of the Swiss Banking Act. The new legislation came into force on 1 January 2015.
Banks must take appropriate measures to ensure that contact with the customer is not lost. Should, despite these measures, the bank not have contact with the customer over a lengthier period of time, then according to the current legislation and the guidelines, it must:
Once the assets have been transferred to the federal government, all claims relating to the assets are null and void. The obligation to publish and transfer the assets has been in effect since 1 January 2015.
Individuals with knowledge of possible assets without contact or dormant assets, to which he or she is entitled, should contact the bank in question. In cases where the name of the bank is unknown, it has been possible since 1996 to conduct a search with the help of the Swiss Banking Ombudsman. A search can be conducted at any time once assets have become without contact – it is not necessary that the 60 years have passed. Because the assets that are contained in this centralised database are subject to bank-client confidentiality, an inquiry may only be made through the Banking Ombudsman and only with proof of entitlement. For such a search to be conducted, the claimant must submit documents that substantiate entitlement to the assets. This ensures that only those individuals who are in fact entitled to the assets, receive the assets in question. If assets are found, the Banking Ombudsman contacts the affected bank, which conducts a final verification of the legitimacy of the claimant, and the contact between the bank and the client is re-established in this manner.
Further information on how customers can prevent their accounts from becoming dormant has been compiled and published in a flyer compiled by the SBA.
Despite the best of efforts to find customers and the possibility for individual searches through the Banking Ombudsman, it can nevertheless occur that contact cannot be re-established for decades. In order to give customers a final possibility to search for assets and thus ensure that banks can address dormant assets in a standardised manner and with legal certainty, there is a special procedure in place: