Inactive account time limitations

[manofthecoldland]

FYI   If you have an account in a local bank, please be aware of their account termination/closure rules and regs. due to 'account inactivity'. They are, of course, in business to make money, and if your account is not generating sufficient fees or profit for them, they will pull the plug on you here much faster than in many of your home countries.

When my foreign account to local account remittance system had an unresolved technical failure, I switched to another non-bank system. Three or four months later, my wife's account was closed without warning, text or communication. She discovered at the ATM that it had been closed... inquired and was told it was terminated for inactivity.

That wasn't a big problem in our case,  since we can set up another system when I am out of country again and need to remit, but several days ago another ex-pat told me a disturbing tale re this practice.

My elderly friend (80+ yrs) who has lived here  very long time, returned to Europe for some medical operations with his Pinay wife and stayed there 6 months for his recovery. When he returned home, his wife went to get money from their local account. They had left 1500 Euros or possibly the equivalent in pisos in it when they left.  She was told that the account had been closed due to inactivity. They had been given no warning or information re this, before she discovered the fact when she went to make a bank transaction upon their return.

He told me that he DID NOT recover his 1500 Euros to date. He is a semi-retired foreign attorney and professor of International law and still  does some case work via computer links at times. He has lodged complaints with his home country's banking regulators against the bank here, and so far the issue is not resolved and he has not recovered the 1500 Euros he had left in the account when they departed.

The point here is... make sure you understand how things operate here, even with banks, to reduce the risk of unanticipated financial loss or problems.    

I was going to end here, but my wife just ask me what I was writing and I told her. She then told me that, that was the reason why she no longer "leave some money" in her account when I send her money. (I used to tell her to always leave some extra money in it and not empty it... but she won't) Now she just informed  me that when she left in P500 it would disappear. At other times when she left P2K and the bank was closed due to power outage, the account would be P1K short, so she no longer leaves anything in her account because "It disappear".  

I just learned of this now while writing. My wife does not always want to tell me when bad things happen to her. 

[Dave Hounddriver]

45 minutes ago, manofthecoldland said:

she just informed  me that when she left in P500 it would disappear. At other times when she left P2K and the bank was closed due to power outage, the account would be P1K short, so she no longer leaves anything in her account because "It disappear".  

Just to relate my own experiences in these matters:

Many accounts have a minimum balance requirement.  Any time your account dips below the minimum balance they deduct a fee and sometimes it is quite high.  Of course there are other fees that you have to watch for but when a person educates themselves in these matters then they seldom lose money to "disappearing".

There is a policy in many/most banks to close any account that is inactive for 6 months or more.  The money does not just "disappear" and you can always go in and open a new account and have the remaining money transferred to the new account.  What remaining money?  There is a substantial monthly fee (varies from bank to bank) for maintaining an inactive account.  In the event it is an interest earning account then it is possible the interest will outweigh the fee and your money will still be there, but in most accounts the money eventually erodes to nothing if left inactive long enough.  Been there done that.  This is Philippines and this is how they do it here.

[Jack Peterson]

 Unfortunately Dave is correct in his post and the majority of Worlds Banks will work the same way. Time and staffing levels have to be paid for even on a Dormant Account 

[manofthecoldland]

Thank you both. I shall advise her to check with her bank on its policies and become informed on the matter. I doubt if she ever gave it much thought or educated herself on this matter in detail, despite being knowledgeable in other types of transactions.  I hope it just slipped her mind re maintaining a min. balance or incurring fees and penalties. Thanks again, gentlemen.

Edited January 26, 2018 by manofthecoldland
grammatical errors

[Huggybearman]

 Both BDO and BPI have service charges of 300php /month if your balance drops below a set level. I think it's around 3000php. So we always maintain greater than that and have never been charged bank charges and in the case of BPI have often not used the account for more than six months but the money has always been there. 

However 1500 euros is a significant amount of money, around 90,000php, so I would be very surprised if it would just disappear. As Dave Houndriver says, it is probably still available somewhere. Would the Philippine banking ombudsman be able to help? After all they run a scheme that is supposed to protect balances up to I believe 500,000php. 

If your friends account was a simple savings account then I don't think that the bank can simply help themselves to that kind of money.

They could conceivably close the account on grounds of it being uneconomic to administer but I bet not many accounts have a balance of 90,000php. Something doesn't sound right here.

https://www.imoney.ph/articles/savings-account-in-the-philippines-the-basics/

I would certainly investigate further. Any idea of the name of the bank involved? I would be very wary of having an account with them. My very good friend is a BDO branch manager so I could always get his advice but he would probably need to know what type of account your friend had and with what bank.

Ken

 

Edited January 26, 2018 by Huggybearman

[Dave Hounddriver]

33 minutes ago, Huggybearman said:

They could conceivably close the account on grounds of it being uneconomic to administer but I bet not many accounts have a balance of 90,000php. Something doesn't sound right here.

Agreed.  Many people put their money in long term deposits and it is "inactive" for 5 years so something does not sound right and if it were me I would be politely in the face of the bank manager looking for my money.  The problems occur if you are not in this country and you want to find your money.  Good luck with that.

[Jollygoodfellow]

The banks websites here clearly tell the terms and conditions for each type of account so the information is always there.  

[manofthecoldland]

Thank you for your comments. I'm sure everything is on the up & up, legal and in accordance with the laws. The elderly ex-pat is a casual acquaintance of several years that I converse with infrequently, but seemed very upset with his plight when I had coffee with him the other day. I'm sure he and his wife will work it out.

 My wife's situation was due to ignorance.

Today another ex-pat I ate with, mentioned that his P10K international account at one time dwindled quickly when he wasn't paying attention to the regs. at a rate of 28% of the existing balance per month. I cannot confirm any of this hearsay and apologize for mentioning these episodes. I thought perhaps someone else could bring in some hard knowledge and throw cold water on these impressions.

I myself do not bank here and appreciate the comments of those of you who do.

[Dave Hounddriver]

21 minutes ago, manofthecoldland said:

I thought perhaps someone else could bring in some hard knowledge and throw cold water on these impressions.

There are problems in the banking system.  I had money stolen from my account years ago by a crooked bank manager. I had a friend who's gf would steal money from his account too.  But on the whole, if we keep a close eye on our money and question it quickly when money goes missing, it all works.

The girl who was stealing Greg's money makes a good story for guys to watch out for.  He would send her to the ATM with his card to take out 10K.  She would take out 10K and then another 10K and bring him the second 10K with the bank slip for that.  He would look at it (she did it when he was drinking beer) and say "I thought I had more in there than that". But he would pass it off as his own poor memory on how many times he had withdrawn 10K.   Let this be a lesson to all of us who trust a gf with our ATM card and pass-number.

[Jack Peterson]

52 minutes ago, Dave Hounddriver said:

 Let this be a lesson to all of us who trust a gf with our ATM card and pass-number.

GUILTY But  Trust is something we have to learn and live with