Monday, January 31, 2011

Breaking News: Appeals Court Enjoins Zip Code Requirement & Other Updates Regarding NJ Litigation

Yesterday, the U.S. Court of Appeals for the Third Circuit, based in Philadelphia, temporarily enjoined New Jersey from enforcing a state law requiring gift card issuers to obtain the zip code from the purchaser or owner at the time of purchase.

As we noted earlier, the district court responsible for overseeing the New Jersey litigation ruled last week that the zip code requirement could be enforced.  The card issuers involved in the New Jersey gift card litigation then appealed the lower court's ruling regarding the Zip Code Requirement to the Third Circuit Court of Appeals in Philadelphia.  New Jersey has already appealed the district court's earlier ruling preventing the state from (1) imposing a presumption that cards sold in New Jersey are escheatable to New Jersey and (2) requiring merchants to escheat the cash value of merchandise only gift cards issued prior to the effective date of the act.

Note that this is only a preliminary decision by the appellate court.  A full decision on the merits probably won't happen for a few weeks.

Also, its been awhile since we provided an updated status of the parallel litigations relating to money orders and traveler's checks.  In both the money orders case (MEMO v. Sidamon-Eristoff) and the traveler's check case (AMEX v. Sidamon-Eristoff) the issuers of those items are challenging New Jersey's decision to shorten the dormancy period for those items to 3 years (down from 7 years in the case of money orders, and from 15 years in the case of traveler's checks).  In both of those cases, the district court ruled that the state could permissibly shorten the dormancy period for the items in questions, and the issuers have appealed that ruling to the Court of Appeals.  In both instances, the Court of Appeals has issued a temporary restraining order preventing the state from enforcing the shortened dormancy periods until such time as the appellate court has had a chance to review the ruling.

Unclaimed Property Meeting in San Antonio (No, not the UPPO Conference)

Soon, more than 500 people will come to San Antonio, Texas to discuss current issues relating to unclaimed property.  Yes, the 2011 Annual Conference of the Unclaimed Property Professionals' Organization will be in San Antonio this year, but that is not the meeting we mean.

According to MySanAntonio.com, more than 500 descendants of Spanish and Mexican land grantees (e.g., people who were granted land in Texas by the Spanish and Mexican governments prior to Texas' independence) are meeting in San Antonio to request that the Texas Legislature amend the Texas Unclaimed Property Act to allow them receive unclaimed proceeds from mineral rights.

Under the Texas Unclaimed Property Act, mineral royalties and related payments are escheatable if unclaimed for 3 years.  In many instances, however, the owners of these lands have died intestate (i.e., without a will) and with no known heirs.  Accordingly, the funds have simply been escheated to the Texas Comptroller of Public Accounts, where they are unlikely ever to be claimed.

According to the article, the purported descendants of the earlier property owners "want legislation to set up a method by which the state can identify and qualify descendants of the original grantees using legal and historical documents as well as family genealogical research." 

Thursday, January 27, 2011

Exxon Valdez Spill Fund Seeking Over 1,800 Claimants

According to an article in today's Kodiak Daily Mirror, attorneys who represented the fishermen and other plaintiffs in connection with claims against Exxon resulting from the 1989 Exxon Valdez oil spill have been unable to pay out more than 1800 claims because the claimants (or their heirs) can not be located.

If you think that you, or someone you know, may be entitled to funds from this settlement, more information can be found here.

Monday, January 24, 2011

NJ Federal Court Issues Another Ruling on Gift Card Law -- Zip Code Requirement Goes Into Effect February 1

Escheatable has been covering the ongoing litigation concerning the New Jersey gift card legislation enacted earlier this summer.  As you may know, the federal court considering the new law enjoined the State from enforcing certain parts of the law, namely (1) a presumption that all gift cards sold in New Jersey were escheatable to New Jersey; and (2) a provision that required merchants to escheat gift cards issued for merchandise only (and prior to the effective date of the act) to the state in cash, notwithstanding that no gift card holder could receive cash from the merchant.

When we last left the litigation, however, the parties disagreed as to whether the new law's requirement that gift card issuers obtain purchaser or owner zip code information is enforceable (the "Zip Code Requirement").  New Jersey took the position that the Zip Code Requirement is unaffected by the injunction, while the issuers believed that the provision can't be enforced.

Last week, the federal court overseeing the litigation ruled that the Zip Code Requirement was not effected by the injunction, and held that it could be enforced by the State.  According to the latest information from the NJ Treasury Department, gift card issuers are to begin collecting zip code information at the time of purchase effective February 1, 2011.  As the court noted, the law does give the Treasurer authority to issue "exemptions" from these requirements upon a showing of good cause by a particular card issuer.

Thursday, January 20, 2011

Find Your Missing Loonies: Canadian Unclaimed Property Article (with Links)

The Toronto Globe & Mail published a very comprehensive article on all the various places that unclaimed property hides north of the border.  The article provides information for unclaimed property databases maintained by the Bank of Canada (unclaimed bank accounts), Canada Revenue Agency (unclaimed tax refunds), the Office of Bankruptcy, even the Ontario Lottery Commission.

As in the U.S., the regulation of unclaimed property in Canada is generally a matter of local (provincal), as opposed to federal, law and differs from province to province.  Some provinces, such as Quebec and Alberta, have fomalized unclaimed property laws and online databases.  In other provinces, such as British Columbia, the laws are mandatory for some holders, but optional for others. 

If you have information concerning unclaimed property laws in other Canadian provinces, feel free to drop us a line.

Wednesday, January 19, 2011

Washington State Offers Holder Workshops

Throughout the year, the Washington Department of Revenue offers a variety of educational workshops for holders of unclaimed property.  The workshops are designed to increase holder awareness of unclaimed property requirements in an effort to make the process easier for holders (and to make sure that the state gets to take custody of all the money to which its entitled).  Currently, the state has announced plans to offer three separate workshops (descriptions taken verbatim from DoR website):

Unclaimed Property Basics 101


This free workshop provides reporting basics for accounting employees new to unclaimed property or anyone who would like to refresh their knowledge of this specialized area. Topics include:
    • History of unclaimed property
    • Purpose and benefits of the Act
    • Common property types
    • Dormancy periods
    • Due diligence requirements and tips
    • Preparing your report – when, where, and how
    • Common reporting and remitting errors
    • Electronic reporting
    • Developing an effective unclaimed property accounting system
Unclaimed Property for Financial Institutions
This free workshop covers subjects of interest to the banking community such as:
  • Property types and issues unique to financial institutions
  • Aging and controlling inactive customer accounts
  • Inactivity charges and ceasing interest
  • Time Certificates, IRAs, Keoghs and Special Designation Accounts
  • Positive owner contact and notifying owners of account changes
  • Abandoned safe deposit boxes
  • Audit process
...and, just to show that the state wants all holders to be report and remit appropriately...

Unclaimed Property for Government Agencies
This free workshop covers subjects unique to government agencies. State, county, city, and quasi-municipal organizations are encouraged to attend. Topics include:
  • Property types and issues unique to government agencies
  • What to report and what to remit
  • Exemptions from reporting
  • Unredeemed bonds and interest payments
  • Gift certificates and safe keeping items
  • Records retention and liability for “reported only” property
  • Customer credits
  • Unidentified receipts
  • Audit Process
As the descriptions indicate, these workshops are offered free of charge to the holder community.  Information regarding the dates, times and locations of these seminars can be found at the Department of Revenue website.

Tuesday, January 18, 2011

California: Unclaimed Property Notice at Account Opening

A reminder to our banking and financial institution friends in California of new requirements effective January 1:  Pursuant to Section 1315.5 of the California Code of Civil Procedure, banks and financial institutions must now provide customers with written notice -- at the opening of the account -- "informing the person that his or her property may be transferred to the appropriate state if no activity occurs in the account within the time period specified by state law." 

This notice may be provided electronically if the customer has consented to receiving electronic notices or account statements.

Tuesday, January 11, 2011

$33 Million Available for Veterans and Their Families

Beginning in 1917 during World War I, the U.S. government has provided life insurance to soldiers, sailors and marines.  Originally intended to provide insurance against the loss of ships and cargo prior to America's involvement in World War I, the War Risk Insurance Act was thereafter amended to allow the federal government, through the Department of Veterans' Affairs, to offer life insurance to members of the armed services.

According to the VA insurance website, over 93% of those eligible during WWI took the coverage (up to $10,000) and these programs were continued through each succeeding war and major conflict.  As with other types of insurance, however, a substantial amount of the policies remain unclaimed.  According to an article on ABCnews.com, at least $33 million in unclaimed insurance proceeds remain with the VA, most of which dates back to World War II.  Veterans, or their families, can check  if they are eligible through the VA website.

Sunday, January 9, 2011

New Jersey Gift Card Requirements Extended to February 1st

We continue to follow the constantly evolving news regarding New Jersey's attempts to regulate gift cards. As many of you know, gift cards that have been dormant for 2 years are now subject to the reporting and delivery requirements on the NJ Unclaimed Property Act.

Other parts of the legislation, which took effect this summer, remain unsettled and the subject of federal litigation between numerous trade groups and the state treasurer. For example, one provision of the law that sought to create a legal presumption that all cards sold in NJ were sold to NJ residents ( the "Location Presumption") has been enjoined by the federal court until further notice.

The fate of another provision of the law - requiring card issuers to obtain the purchasers' zip code at the time of purchase - remains unsettled. The parties to the litigation disagree as to whether the court's previous ruling stopping the Location Presumption also applies to the zip code requirement, and both sides have asked he court to clarify it's earlier ruling. While the parties wait for ruling, the Treasurer issued an announcement last week further delaying the start date of the zip code collection requirement until 2/1.

The court will likely provide additional guidance before that date, and we will continue to follow the story.

Wednesday, January 5, 2011

UPPO to Host "Unclaimed Property 101"

The Unclaimed Property Professionals' Organization - the primary education and advocacy group for holders of unclaimed property is offering a webinar on January 20, 2011 titled "Unclaimed Property 101."  The webinar is designed for those who are new to unclaimed property and will explore the basic principles, priority rules, property types, and reporting requirements of state unclaimed property laws.

The session is free for UPPO members, and $49 for non-members.  Registration information can be found at the link above.

Tuesday, January 4, 2011

Unclaimed Art and its Proceeds

We mentioned recently that some states specifically earmark unclaimed funds for particular uses, such as education.  According to a recent article on Wicked Local, a bill pending in Massachusetts would set aside the proceeds from the Abandoned Property Division's auction of unclaimed "creative and individual works of art" for an Artists Disaster and Emergency Aid Fund to "ensure the safety and vitality of artists residing in the Commonwealth." 

Though Wicked Local included this pending legislation in its listing of the most unusual bills filed during the most recent legislative session, unclaimed art and royalties is a real issue.  We've covered earlier some of the controversies involving the Screen Actors Guild and unclaimed television and movie royalties.  More recently, New York Magazine published a brief story indicating that Sound Exchange, a performance rights organization that collects royalties on behalf of music artists, has in excess of $100 million in unclaimed royalties.

Saturday, January 1, 2011

Happy New Year!

Happy New Year from all of us here at Escheatable!

Just a reminder, starting today, you can once again freely pick up pecans that have fallen onto public walkways in Georgia.