Did you forget about a bank account in New York...

Did you forget about a bank account in New York State? Has it been dormant for five years? It can be reclaimed. (July 29, 2010) Credit: Getty Images

In 1995, my mother bought certificates of deposit that automatically renewed every five years. This year, she was notified they would stop earning interest. She's housebound, so I went to the bank for her. I was told her accounts were dormant and awaiting transfer to the state. The dormancy was removed -- but only after a phone call requesting her birth certificate and three more trips to the bank! It was very distressing, and no one at the bank could explain why this happened. Have bank CD rules changed?

No. But few bank customers know about New York State's dormancy law -- and based on your experience, bank personnel don't know much about it, either. The dormancy law assumes an account has been abandoned if the depositor "has had no contact" with the bank for five years. That contact could be a letter or a phone call. It doesn't have to be an additional deposit or a withdrawal, says Larry Schantz, New York State Director of Unclaimed Funds.

Dormant accounts are transferred to the state -- and there are a lot of them: New York's Unclaimed Funds now total about $10 billion. But before an account is declared dormant, the bank is legally required to notify the owner -- initially by first-class mail, then by certified mail, and finally in a newspaper ad. When the account's owner responds, the bank can ask for any identification it wants before removing dormancy.

On a more upbeat note, even after a dormant account is transferred to the state, there's no statute of limitations on the consumer's right to reclaim it - and that right extends to heirs.

The bottom line: It's a good idea to ask your bank how to ensure that your accounts remain listed as active.

Click here for the free N.Y. State Unclaimed Property site at www.osc.state.ny.us/ouf/index.htm.