Update: It's Your Money: State takes 12-year-old's bank account money because he didn't use it
Posted at: 03/15/2013 12:08 PM | Updated at: 03/15/2013 11:44 PM
"Very mad. That's why I contacted Channel 10." That's what a local mother said after she looked at her 12 year old son's savings account and found all the money was gone.
And guess who has the money now? New York State.
And get this -- the 12 year old's bank had to drain the account by law.
A lot of our viewers wondered why savings account money can be taken like that. So we tried to make sense out of it.
See if you're heard this one before -- dormancy escheatment.
Click here to read the law
That's the fancy term of the law that says banks must take money from accounts that haven't been used in three years and give it to the state. that's why the savings of 12 year old Louis Annunziata are sitting in Albany right now.
Years ago, Lou's mom set up a savings account at ESL and as of last year it had $150. But when his mom looked at the bank statement today she was shocked by the balance -- zero.
"And you're thinking what?" I asked.
"I'm thinking what happened to this money?" Dawn Annunziata answered.
Here's what happened.
Because Lou's account had no activity in three years, ESL took the money and sent it to the State Comptroller's office. According to the Comptrollers website, "for your protection" the state takes "abandoned money." It then says "until the money is claimed, it is used by the state's general funds."
That's what Lou's $150 has been doing since late last year.
We spoke to ESL today and the bank says it followed the law, sending letters to lou and printing a notice in the paper.
"ESL says it sent you a couple of warnings," I said.
"Right," Annunziata said.
"Do you remember getting warnings?"
"No I don't."
The Comptroller's office says the law has existed since World War Two.
"I think our viewers are going to say, here's a 12 year old kid with $150 in his account and now it's gone. They're not going to believe it," I said.
"I know especially these days where I don't think too many kids have savings accounts," Annunziata said. And in this economy I could use that $150 myself."
The Rationale and some perspective
It used to be five years of no account activity before the bank sent the money to the state. Now it's three years.
The rationale is the sooner the state gets the money, the sooner they can get it back to the people it belongs to.
This will help put the story in perspective.
The State Comptroller's office says it got more than half a million claims for money last year and paid out $314 million to the people it belonged to. The state has $12 billion in unclaimed funds right now and the majority came from dormant or unused bank accounts.
Why didn't ESL pick up a phone and call Lou? Because last year it had 5,000 dormant accounts to handle.
How do you make sure this doesn't happen to you?
First -- make sure every account they have has at least one transaction every three years.
If you're concerned -- call your bank and ask them.
If you find yourself in the same position as young Lou, your money is probably with the Comptroller's office in Albany.
Click here for a link to the Comptroller's Office of Unclaimed Funds.
Lou's mom filed a claim with unclaimed funds this morning. Lou is getting his money back in the next two weeks.