Dormant Accounts: Fees, Notice and What Happens to the Balance

'Dormant' is a term, not a status the money acquires

The Commission's guidance on account inactivity is direct about this: a period of inactivity does not make the funds dormant. Twelve months without a login does not convert a customer's money into the operator's money, or into money of some intermediate character. It remains the customer's balance, held by the licensee.

The guidance goes further on what an operator's terms may not do. Operators should not have terms which allow them to change the legal status of money in a player's deposit balance, or to alter the player's legal entitlement or rights to claim their funds, even where an account has become inactive. That rules out the two drafting devices that would otherwise make a dormancy clause powerful: reclassifying the money, and extinguishing the claim to it.

What an operator must do before charging

The Commission's position on dormancy charges is a sequence rather than a prohibition, and each step is a constraint on the operator.

• Try to return the money first. Before treating a balance as unclaimed, the operator should attempt to repay it to the last payment method the customer used.
• Put the charge in the terms. A fee has to be explained in the terms and conditions. A charge that is not in the contract is not available to the operator at all.
• Remind, with time to act. No less than 30 days' reminder is expected before a charge is applied.
• Give notice before removing funds from view. Where funds are to be taken out of the visible balance, 30 days' notice is expected.
• Keep it proportionate. Charges must not be disproportionate or unreasonable. A fee that consumes a balance in a few months is the example that fails this test.
• Never confiscate for inactivity alone. Inactivity is not a ground for keeping a customer's money.

Each of these also has to survive licence condition 7.1.1: the terms must not be unfair within the meaning of the Consumer Rights Act 2015, must be transparent, must be made available in an easily accessible way, and material changes must be notified to customers before they take effect. A dormancy fee introduced quietly into an updated terms page is a problem under paragraph 3 of that condition before anybody reaches the question of whether the fee itself is reasonable.

Where the balance actually sits

A separate licence condition governs how customer money is held and what the customer is told about it. Licence condition 4.2.1 requires licensees who hold customer funds to disclose, in writing and in terms the customer is likely to understand, whether those funds are protected in the event of insolvency, the level of that protection, and the method by which it is achieved. That rating — the familiar "not protected", "medium" or "high" language in a terms page — describes an arrangement. It is not a compensation scheme and it is not a guarantee of repayment, which is the most common misreading of it.

For a dormant balance this matters in a specific way: the protection rating tells you how the money is held while it sits there, which is a different question from whether a fee may be charged against it.

The practical shape of the problem

Dormancy clauses are where three things an operator controls meet: its own definition of the inactive period, its own fee, and its own notification process. None of the three is fixed by regulation, so quoting one operator's figures as the British norm describes nothing. What is fixed is the frame around them — attempt repayment first, disclose the charge, give at least 30 days' reminder, keep the charge proportionate, and never treat inactivity as a reason to keep the money.