Deposit schemes still earning interest from unclaimed funds

Share this article

One of England and Wales’ biggest deposit schemes has admitted it can go on earning interest on money left unclaimed in its custodial pots.

The Deposit Protection Scheme (DPS) has revealed to EYE that 0.2% of money it looks after has gone unclaimed in the past two years.

EYE queried if these funds still earn interest and a spokesman confirmed this was the case, but said that while it is a small amount of money earned, the intention is never to profit and they will always try to reunite the tenant with their money.

A DPS spokesman said: “There are several ways in which the DPS is sometimes prevented from reuniting deposits with tenants and, less frequently, with landlords who have a valid claim against a deposit.

“Sometimes tenants simply prove uncontactable – not replying via the details we have for them nor providing any alternatives. Whether they are entitled to the return of the full deposit or just part of it, under the terms of our contract with the government, we are unable to release any amount due until tenants contact us and can prove their identity.

“Payments to tenants sometimes also fail – for example, if there is a problem with their bank account or they have provided the wrong account details – and we must sometimes wait for a long period before we receive alternative instructions. Similarly, we sometimes issue cheque payments to tenants, as they do not provide us with alternative bank account details, and these cheques may then go unpresented.

“We do try to contact tenants directly via emails, letters, text messages and via social media to let them know how they can get their deposit back, and raise awareness of the rights and responsibilities of both landlords and tenants online and via the media. However, we are really reliant on tenants keeping their own contact details up to date to be able to repay deposits effectively.”

Meanwhile, SafeDeposits Scotland, which has revealed it has more than £500,000 of tenant deposits lying unclaimed, has also outlined the lengths it goes to when trying to repay the funds.

A spokesman said: “SafeDeposits Scotland’s finance team do everything they can to reunite former tenants with their money, sending letters to forwarding addresses, emailing, calling and texting. While successful in the majority of cases, some people are more elusive.

“Money can’t be paid back automatically as by law tenancy deposit schemes do not hold bank details for tenants. The schemes can only repay monies once this information has been supplied by tenants.”

Share this article

Written by: Houseladder