₩14 trillion in “dormant money” ... 340 million forgotten accounts, up 29.3% in three years

[Financial News] So-called “dormant accounts,” with no transactions for three or more years, have topped 340 million. Financial authorities and institutions are informing consumers about “hidden” assets, but the number of long-term inactive accounts continues to grow steadily.
According to data submitted on the 20th by the Financial Supervisory Service to the office of People Power Party lawmaker Park Sung-hoon, a member of the National Assembly’s Political Affairs Committee, there were 341.91 million long-term inactive or unclaimed accounts and dormant financial asset accounts in total at the end of last year. That was an increase of 77.51 million accounts (29.3%) from 264.4 million at the end of 2021.
Long-term inactive accounts generally means accounts with no transactions for three or more years. Dormant financial asset accounts include deposit, installment savings and insurance payout accounts for which the statute of limitations on claims has expired, as well as dormant securities accounts subject to separate criteria.
Of these, 195.03 million were long-term inactive or unclaimed accounts, up 26.0% in four years. Deposit and installment savings accounts were the most numerous, at 124.83 million. They were followed by cash-balance accounts at 69.27 million and insurance payout accounts at 940,000.
In particular, long-term inactive cash-balance accounts surged 61.8% over four years, from 42.81 million at the end of 2021. That was about two-thirds of the overall increase in long-term inactive accounts over the same period. The balance of long-term inactive or unclaimed financial assets was 14.1857 trillion won, with deposit and installment savings accounting for 7.4342 trillion won, more than half. This was followed by 5.1895 trillion won in insurance payouts and 1.562 trillion won in cash balances.
The total balance fell from 15.0833 trillion won at the end of 2021. By contrast, the balance in deposit and installment savings accounts rose by 849.3 billion won over the same period, from 6.5849 trillion won,
Banks had the largest balance in long-term inactive deposit and installment savings accounts, at 5.6887 trillion won. They were followed by mutual finance institutions at 1.6671 trillion won and savings banks at 78.4 billion won.
At the end of last year, dormant securities accounts accounted for about 75% of all dormant financial asset accounts. A financial industry official said some securities firms appeared to have sharply increased the number of unused accounts by encouraging people to open accounts through cash-based promotions to promote their apps or mobile trading systems.
Last year, the financial sector refunded 548.8 billion won in dormant financial assets, involving about 8.3 million accounts. The figure excludes funds contributed to the Korea Inclusive Finance Agency. Despite these refunds, the number of dormant financial asset accounts had risen by about 5.12 million by the end of last year compared with a year earlier.
Lawmaker Park Sung-hoon said, “We need to analyze why long-term inactive accounts are accumulating and improve customer notifications and refund procedures.” He added, “It is not enough to promote refund figures; we need to identify why long-term inactive accounts continue to accumulate and comprehensively review financial companies’ advance notifications and refund procedures.”
[email protected] Park Mun-su Reporter