Spanish lenders close as many as a million unclaimed bank accounts

Despite frantic calls and letters from banking firms in Spain, small balances and in some cases huge sums are likely to be passed on to the taxman

In Spain there were 71 million current accounts open in 2015. But in May of last year, Spanish banks froze those accounts belonging to clients who had failed to hand over a photocopy of their identification document, as was required by a law aimed at combating money laundering. After many phone calls, letters and messages, from January 2016 the second phase got underway: the cancellation of those accounts. More than a million accounts have been closed down so far, perhaps even as many as two million, although for now there are no official figures. Senior citizens, immigrants and clients who have changed their place of residence characterize the profiles of those most affected.

The Bank of Spain headquarters in Madrid.
The Bank of Spain headquarters in Madrid.EFE

“There have been a lot of clients with this problem,” explains one bank manager. “We are currently desperately making phone calls, because from now on we have to start shutting down the blocked accounts, which is a much more complex operation.”

Given the magnitude of the job in hand, some lenders have subcontracted support teams for their bank staff.

Banks have moved on to more complicated cases, involving accounts that cannot be closed on a “mass scale”

The government gave banks a five-year period to collect the documentation, but as the deadline approached lenders had to rush to get the job done. An extension on the final date was requested, but not granted.

The most common client with an unclaimed account belonged to seniors. “It’s possible that many have already passed away, but their families have not let us know, and as such we cannot list them as deceased,” one bank employee explains. In former savings banks, many foreigners holding accounts failed to hand over their documentation, “because they had a close relationship which allowed them to work together [with the bank] without handing over their documents,” they admit at a lender that has merged with a large savings bank.

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Banks have not closed all of the accounts at the same time. “They started by cancelling the accounts which had negative balances and that were inactive,” they explain from a major lender on the condition of anonymity. “Then those that held €5, then €10, up to €100… and then the level was raised above €1,000

After that banks moved on to more complicated cases, involving accounts that cannot be closed on a “mass scale,” given that they are more difficult to deal with. For example, there are joint account holders, who in many cases have been identified. Or there are accounts that have bank cards, insurance policies or pension plans associated with them. “It’s a very slow process,” they admit at one lender.

In some cases there are accounts “with very large balances” that have been abandoned, as odd as that may seem. And what happens with the unclaimed money? Sources from one major lender explain that they will be held by the bank for 20 years. “If the account holders reclaim the funds, they will be returned, obviously, after proper identification. After that period, the money will go to the taxman.”

English version by Simon Hunter.


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