$1.25 billion in lost money

Australians are a forgetful bunch.

Not only do we have an estimated $16.8 billion in ‘lost’ superannuation, but we apparently have around $832 million of foreign cash sitting in drawers and another $1.2 billion in unclaimed monies.

According to the Australian Securities and Investments Commission (ASIC), at the end of May this year, an additional $471 million was added to the unclaimed money kitty. The money comes from old bank accounts, life insurance policies and shares.

$450 million of that came from bank accounts that are inactive and banks have been unable to contact the owners. ASIC senior executive Robert Drake says the cash from unclaimed accounts is waiting to be retrieved. While money is being reunited with its long lost owners all the time, generally ASIC receives more money coming in than is being paid out.

Mr Drake said $48 million was recovered by its owners during the 2012/13 financial year. Until the money is collected, it will sit with the government with no time limit, until it is collected. Amounts range from as little as 5 cents to as much as $600,000.

Much of the funds come from bank accounts which haven’t been touched in years, dividend payments that haven’t been collected, capital payouts after companies get taken over and life insurance policies. Money also comes in from deceased estates, where beneficiaries either can’t be found or contacted.

Australian Bankers Association chief executive Steven Muchenberg says bank accounts – held by the likes of ANZ Bank (ASX:ANZ), Commonwealth Bank (ASX:CBA), National Australia Bank (ASX:NAB) and Westpac Banking Corporation (ASX:WBC) – that have had no deposits or withdrawals in three years are transferred to the government. Interest payments or bank fees don’t count towards making an account active.

Foolish takeaway

Australians can do a free search for unclaimed money at ASIC’s website, or use the Australian Tax Office’s quick online search to find lost super. It’s free money, why not see if the government owes you some back?

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Motley Fool writer/analyst Mike King doesn’t own shares in any companies mentioned.

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