THE federal government agency meant to locate owners of $1.2 billion of “unclaimed” money no longer has time to do so because it has been overwhelmed by Bill Shorten’s decision to snatch more dormant dosh.
Not so long ago Australian Securities and Investments Commission (ASIC) staff would congratulate each other for returning — at no charge — more lost cash than money refund agents, who take as much as 25 per cent of the amount found.
In 2009-10, ASIC proactively returned nearly $10 million. Money refund agents returned just $7.8 million. Individuals doing their own digging found $9 million.
But figures obtained by News Corp under freedom of information laws show that in 2013-14 ASIC did not return a cent. Meanwhile those greedy money refund agents located nearly $5 million, generating hundreds of thousands of dollars in fees.
The reason ASIC has stopped seeking out the rightful owners of lost cash is that it has been overwhelmed by the former Labor federal government’s December 2012 decision to snatch inactive bank accounts and life insurance policies after three years not seven.
The change — made while Labor leader Bill Shorten was Financial Services Minister — was designed to reap a net $93 million in 2012-13 as part of Labor’s ultimately unsuccessful bid to get the Budget back in the black.
The value of bank accounts and life policies sent to ASIC in 2012-13 soared 687 per cent to $551 million. Almost all of this increase was due to the three-year rule.
Last financial year ASIC grabbed another $146 million from bank accounts and life policies, more than double the amount in 2011-12. It is now holding $1.2 billion of unclaimed cash, once share dividends are included.
After the three-year rule was announced, ASIC had to redirect staff who had been locating owners.
First, it was to apply the time frame change then to deal with the consequences — the number of claims in 2013-14 was 1380 per cent higher than 2011-12 levels (38,500 versus 2600).
The explosion likely occurred because most of those people hadn’t lost their account at all. They just hadn’t touched it.
“We just cannot find the resources to be free from the amount of claims we are receiving,” said ASIC’s unclaimed money spokesman Warren Day.
Mr Shorten’s office referred inquiries to Labor’s financial services spokesman Bernie Ripoll, who said: “ASIC has dropped the ball here and the [Finance] Minister [Mathias Cormann] needs to put a rocket up them.”
Senator Cormann would not comment although he has previously said the three-year rule is an “inappropriate grab” for money.
He is looking to redefine “unclaimed” as five years. But the Government has also cut ASIC’s budget.
Unclaimed money held by ASIC for the Federal Government can still be retrieved through the ASIC website.