Hi all
I was wondering what happens to inactive bank accounts that have been totally forgotten for 10 years, with 0 balance on it?
In particular, if you have almost 0 balance on an account inactive for years, does the bank close the account as soon as inactivity fees charged, bring your account slightly below 0? or the bank can keep debiting inactivity fees for unlimited amount of time, and maybe after a while start even a debt collection process?
Thank you in advance
You must have had some notification? From my experience these accounts will be closed.
Thank you for your reply. This actually happened in a different EU country where I used to live 10 years ago. I assume that would be illegal for a bank to charge inactivity fees to bring a simple bank account balance below 0? The normal procedure should be just to close the account? I am tempted to call the bank, but I would not want to re-open something that is already done and dusted.
Depends on the bank and country. Yes, they can debit even if there are no funds on the account in a lot of countries.
But I assume there should be a limit to that? at certain point they simply close the account?
Again, that depends on the bank.
You need to be careful about this... for instance the EU Credit directive requires financial institutions to register all outstanding debts over a certain limit. And on a financial forum where I mod we have had cases of people discovering that they have an entry on their credit report for this reason.
Yes but I have never received any notification per email from the bank.
I assume there are statute limitations for such things? I believe normally it is 6 years?
Banks don ́t send that by email unless you explicitly agreed that with the bank. Anything else will come by snail mail to the address you have given them.
they accumulate inactivity fees, overdraft fees and debt interest compounding over 10 years.
And what happen after 10 years?
I'm sorry to be blunt but this is such backwards thinking, like an ostrich burying his head in the sand (if I can't see them, they can't see me!).
If you contact the bank, then approximately two things can happen:
1. In the best case the account is already closed, nothing to be done.
2. In the worst case you have some outstanding debt that you will need to settle. With a Swiss salary I doubt it will cause you any trouble though.
I can also report that I had a "colleague wanna-be" some years ago who got a lucrative contract with one of the London City banks, but then failed the UK background checks, due to a long forgotten credit card debt in... a South American country, half a world away. It is a small world.
If I remember correctly, banks need to keep accounts open for 30 years
The I think it is 10 years in Switzerland, but many people who quote this fail to appreciate that it is a defence in court and the court may not accept it.
No matter what anyone here says unless you call the bank this matter will never be closed for you - I mean what do any of us know about this really???
I know of a case in Switzerland, had to pay up to close it. Bank accounts can go under 0.
I think you are all right here. Better I call the bank and close the case, to avoid unwanted surprises.
The general point here is that Swiss law is very deferential to whatever is written in a contract.
There are specific rules, mainly around property, employment and the initial selling of financial services, but outside of the specifically defined cases it's usually best to assume a contract is binding as written.
So for example, don't assume there is a statute of limitations, don't think "there should be..." or "it's reasonable..." - unless a court thinks it's egregiously unreasonable a contract doesn't have to seem fair.
Years ago, I closed an account, then a few months later I received a letter from the bank about negative balance. It turned out that I made it using a debit card for that account I asked how that was even possible that the card simply worked after I closed the account. Then the assistant checked again and explained me that some money, some refund, bounced back to my account and because of that they couldn't close it
I had the same problem in the UK with a credit card - it got a small refund (from easyJet, hence the reason it took 12+ months), then I couldn't close it because they would only pay the money into the account on record which I'd also closed. Only option was to go into a branch, in the UK, to sort it out, or get a cheque which was also useless to me as my bank won't take them. I actually did take the cheque (for < £50) intending to cash it somehow in the UK but then keep forgetting to take it with me 🙄