Like the U.S, Canada is experiencing unclaimed money problems of extreme proportions. As of the last report, over 780,000 bank accounts worth $227 million is being held by the Government of Canada. In reality, this is much less compared to the United States, but it might just be the tip of the iceberg.
The basic rules of escheatment for unclaimed Canadian property are: Any money deposited in a Canadian bank that has had no activity for 10 years or more is declared unclaimed. This includes deposits in the form of savings accounts, bank drafts, certified cheques, deposit receipts, money orders or ‘Travelers cheques’. The Canadian Government maintains the balances and acts as a custodian on the owners behalf until they return to claim their money.
As expected, the volume of unclaimed money in Calcutta is growing at a rapid pace, and the number of claims is low in that proportion. The banks in Canada are also reporting a large number of unclaimed money accounts. After 2 years of inactivity, the bank attempts to contact the owner of the lost funds at the address they have on record. They make another attempt after 5 years to reach the owner of these lost funds. After 10 years of inactivity, if the owner has not been found, the account is then turned over to the government and it is then branded as the unclaimed money.
All banks can hold onto unused account balances for up to ten years before turning it over to the Bank of Canada. Currently, there’s more than $320 million in unclaimed balances dating all the way back to 1900. While the bank paid out $12 million in claims last year alone, many notable balances remain unclaimed, including a former mayor, Mel Lastman. His campaign has more than $500 of unclaimed cash in it. The Bank of Canada says there are 938,000 account holders, many deceased but some have simply forgotten about the cash.
In Canada, the government maintains custody of all unclaimed balances of $500 or more until they are claimed. Unclaimed balances under $500 are kept for 20 years (10 years from the date of the last owner transaction at the Canadian bank, plus an additional 10 years held by the government). Consequently, in the case of balances under $500, a claim must be made no later than December 31 of an account’s last year (the year of the last transaction date + 20 years). The oldest balance dates back to 1900!
According to Statistics Canada, almost half the population of Canada moves each year, one of the highest rates in the world. When people move they likely open a new account with a bank that is convenient to their new location. They forget to inform their old bank they moved and over time forget about the old account. In the event of a death the executor of the will and relatives left behind either do not know the bank account exists or cannot locate it.