Thursday, March 31, 2011

Did You Know? Opening Day Edition.

It's time again for Did You Know?  On DYK days here at Escheatable, we try provide you with interesting information regarding the unclaimed property laws to amaze your friends and frighten your enemies.

Today is Major League Baseball's Opening Day.  There are 6 games on today's schedule, meaning that 12 teams start their quest today for the Championship Trophy With All The Little Flags (not sure if that's the formal name, but it's no Stanley Cup).  Among the teams playing today, the Atlanta Braves, Detroit Tigers, New York Yankees, Los Angeles Dodgers, Los Angeles/California/Anaheim/Los Angeles Angels of the Western United States, and San Francisco Giants all have property being held for them with their respective states' unclaimed property department.  So, if they need a little cash at trade deadline time . . .

Wednesday, March 30, 2011

Missouri Opens 12,000 Safe Deposit Boxes to Public & B2B Update

Missouri State Treasurer Client Zweifel opened up 1,200 safe deposit boxes last week as part of the publicity effort surrounding the Show-Me-State's unclaimed property program.  Among the items featured were the usual coins and memorabilia, but also some more unique items such as dolls and a tortoise shell baby rattle.  Generally, the items are held for 2 years by the Treasury, then auctioned to the general public.

In other Missouri news, House Bill 401, which would, among other things, enact a "business to business" exemption to the Missouri Unclaimed Property Act (discussed here), is still progressing through the legislative process.  Most recently, the House Rules Committee recommended passage of the bill.  No vote by the full House has been scheduled.

Tuesday, March 29, 2011

Pending Legislation in the Lone Star State

Were not sure why, but the Texas state legislature seems to be very busy with unclaimed property bills.  Currently pending before various committees of the Texas House and Senate are the following:

Texas Senate Bill 1535 - This bill would amend the Texas Unclaimed Property Act to provide that class action settlement proceeds are deemed abandoned 90 days after becoming payable, unless a different time period is specified by the applicable court or settlement agreement.  The bill is currently before the Committee on Finance.

Texas House Bill 3790 - Would permit the Controller of Public Accounts to deduct a claim fee of 10% of all claims valued at over $100.  Currently pending before the Appropriations Committee.

Texas Senate Bill 1657 - Would add unclaimed land grant mineral proceeds to the coverage of the Unclaimed Property Act.  Currently pending before the Committee on Finance.

Texas House Bill 3571 - Would allow "institutes of higher education" to maintain custody of credit balances of $25 or less and to use such funds.  The bill would also require the colleges to maintain a list of owners and permit claims against the property.  The bill is currently pending before the Committee on Higher Education.

Texas House Bill 257 - This bill would establish a 1 year dormancy period for utility deposits, shorten the dormancy period for money orders to 3 years (from 7) and shorten the dormancy periods of matured CDs to 3 years (from 5).  Currently pending before the Committee on Ways & Means.

Monday, March 28, 2011

The New York Times on Unclaimed Life Insurance Proceeds

It's a little dated, but The New York Times ran an article by Paul Sullivan a few weeks ago on unclaimed life insurance proceeds, and the difficulties that some beneficiaries encounter in trying to find information regarding a deceased loved one's benefits.  While the problem is certainly a familiar one to those in the unclaimed property business, the numbers reported are still staggering.  According to the article, "New York has received $400,287,736 in unclaimed life insurance property since 2000" with one account being worth approximately $1.7 million.


Of course, while holders have many responsibilities relating to the custody, reporting and remittance of unclaimed property, the first line of defense is always a well-educated owner.  Accordingly, holders seeking to limit amounts being turned over as unclaimed property should consider encouraging customers to regularly update their contact information and to place life insurance documentation in a place where it is likely to be discovered by an executor.

Wednesday, March 23, 2011

Operation Extra Mile: Reuniting Missouri Veterans With Their Property

We've spent a fair amount of time here lately discussing some of the more unique holder reunification efforts.  Today's comes from the Missouri Unclaimed Property Division, which bills itself as "Missouri's Largest Lost & Found."  Missouri is no stranger to unique and expanded holder notification efforts; in fact, the state's email notification program is a simple, but effective way for people to keep in touch with their property.  Many of us, in fact, have moved our physical or work address several times in the past few years, but retain the same email account.

Anyway, today's featured reunification effort is Operation "Extra Mile".  The Missouri Treasurer's office has teamed up with the Missouri Veterans' Commission in a database-matching project intended to ensure that Missouri Veterans get their money.  If you or a friend is a veteran who ever lived, worked, or frequently traveled to Missouri, check the database out.

Monday, March 21, 2011

Delaware Abandoned Property Collection "Well Above" Expectations

In these trying times for the economy, its nice to know that some folks are still doing well.  Take the Delaware Abandoned Property Division:  according to this article from Delaware Online, the Delaware Economic and Financial Advisory Council (DEFAC) has approved revised projections "showing a $78.6 million increase for the current fiscal year versus estimates last made in December."  From the fact that we are noting this on Escheatable, you can guess where some of that money comes from.  According to reporter Chad Livengood:

"DEFAC's new estimate for 2012 shows revenue from abandoned property breaking the $390 million Markell budgeted for by $35 million. Abandoned property, or escheat, revenue is "well above what we were expecting," said Deputy Finance Secretary David Gregor."

Although we've often made the point here (not to mention here, here, and here), it bears repeating that unclaimed/abandoned property often makes up a sizable percentage of state revenue.  Accordingly, remember that at precisely those times when unclaimed property seems like the least of your priorities, it may become more important to the states.

Friday, March 18, 2011

SoundExchange - Unclaimed Royalties for Musicians

SoundExchange is a not-for-profit performance rights organization that collects and distributes royalties from internet radio (e.g., Pandora), satellite radio (e.g., SIRIUS XM), and cable television platforms to the musical artists who own the copyrights of those works.  Of course, as we've discussed previously with regard to movie royalties, it is sometimes the case that the artist(s) cannot be located.  In these instances SoundExchange maintains a list of unpaid royalties owed to artists.  If, before you got your start in unclaimed property, you were the member of boy-band, pop group, or Classically-influenced country metal hardcore punk hip-hop jazz fusion outfit, check to see if SoundExchange is holding royalties for you.

Included on the list are some of Escheatable's old favorites, including Annihilator and Kreator.

Thursday, March 17, 2011

Pending Legislation - States Take An Interest (in Interest)

It's been a while since we've done an update of proposed unclaimed property laws that are pending in state legislatures around the country.  Below are some of the more notable recent proposals.  As always, these are just bills - proposed legislation - not laws.  (For more information on how a bill becomes law, see here).

California - Senate Bill 495 - Would lengthen the dormancy period for safe deposit boxes from 3 years to 5 years, establish a "compliance program" for holders of unclaimed property, and require the Controller to pay interest on certain unclaimed property reclaimed by the rightful owner.

Ohio - House Bill 110 - Requires the state to pay interest on certain claimed unclaimed property. 

Why the interest in interest?  In Ohio's case, its due to the Ohio Supreme Court's decision in Sogg v. Zurz, in which the court ruled that "'Unclaimed funds' are not abandoned; they are the property of their owner. Accordingly, the state may not appropriate for its own use, against the owner of the underlying property, interest earned on that property."  California has had its own well-publicized disputes with claimants over the ability to reclaim the full value of abandoned property.  It will be interesting (no pun intended) to see if either of these bills progress in the legislature.

Wednesday, March 16, 2011

Reuniting Owners with Unclaimed Property: It's Harder than You Think

I am not sure why Massachusetts is getting so much coverage here recently (see here and here), but interesting stuff keeps coming out of the Bay State.  Today, we have an article from Julia Spitz of The MetroWest Daily News that asks the following question:  how hard can it be to give unclaimed money to its rightful owners?  This is especially the case when it comes to famous entities (or even some other well-known figures). 

The answer, as Ms. Spitz points out, is that it's often harder than it looks.  Whether because of disbelief, disinterest, or simply being unaware, the fact is that most unclaimed property will never be claimed by the rightful owner (or his/her/its heir or successor).  Thus, while we often give states a hard time for not doing more to reunite owners with unclaimed property (in some instances, rightfully so), it bears remembering that the job isn't as easy as it may seem.

Tuesday, March 15, 2011

The FDIC Unclaimed Funds List - A Resource for Depositors of Failed Banks

Last week, the Federal Deposit Insurance Corporation (FDIC) announced that Legacy Bank of Milwaukee, Wisconsin and First National Bank of Davis, Davis, Oklahoma, were being closed by the Wisconsin Department of Banking and Comptroller of the Currency, respectively.  In both cases, the FDIC was appointed as the receiver of the failed banks.  That brings the total number of failed banks in 2011 to 25.  In these cases, the FDIC - created by the Banking Act of 1933 - is responsible for the payment of deposits and the liquidation or sale of the remaining bank assets.  Notably, the FDIC is not funded directly by taxpayer dollars, it is generally funded by premiums paid by its member banks for deposit insurance.

For those customers who do not withdraw their funds from a failed institution (or don't have their account assumed by a successor bank) the FDIC also maintains an unclaimed funds website where depositors can search for their abandoned accounts.  Eventually, the FDIC turns the funds over to the appropriate state as unclaimed property, but with a twist.  As a matter of federal law, if the funds are not claimed "within 10 years of the date of delivery [to the state], the deposit shall be immediately refunded to the [FDIC] and become its property.  All rights of the depositor against the appropriate State with respect to such deposit shall be barred as of the date of the refund to the FDIC."  12 U.S.C. 1822.

Monday, March 14, 2011

Owner-Reunification Efforts Get Political (In a Good Way)

On Friday, we mentioned that Massachusetts recently published its 50 largest items that were reported to the state in the past year.  Today, we bring word from the Bay State of a first-of-its-kind (I think) owner-reunification effort started by the Treasurer's office.  According to an article on wickedlocal.com, the Treasurer's office is providing members of the state legislature with contact information for constituents that have cash accounts greater than $500 being held as abandoned property.  This is, frankly, an ingenuous idea, harnessing the legislators' desire to serve their districts (read: get reelected) to assist with the process of reuniting citizens with their unclaimed funds.

It is also a relatively low-cost method of owner-outreach.  For the price of a few hundred CDs, containing information that was already compiled, the Treasury department can use the state legislators and their staffs as agents to assist (or at least publicize) the Treasury's efforts to return unclaimed property.  There are many stories about states doing little, or nothing, to return unclaimed funds.  It's nice to see that Massachusetts is making an unique effort to fulfill the unclaimed property department's lesser known function.

Friday, March 11, 2011

Massachusetts' Most Wanted (Owners)

WCVB 5 Boston (www.thebostonchannel.com) posted an article yesterday mentioning the 40,000 Massachusetts residents, including some celebrities, that are the apparent owners of unclaimed property being held by the Bay State.  More interesting, however, is the accompanying list of the state's Top 50 Unclaimed Property Owners of 2011.  These fifty individuals and companies (actually, closer to 40 as there are some duplicates) are collectively owed in excess of $7.2 million.

Names on the list include consulting firm BearingPoint and the late Abe Pollin, former owner of the Washington Wizards.

Thursday, March 10, 2011

Breaking News: Costco Sues Washington State Over Unclaimed Rebates

According to an article by Vanessa Ho in Tuesday's Seattle Post-Intelligencer, Costco - the famous big box grocer/wholesaler - has just sued the State of Washington over $3 million in unclaimed rebates.  According to the article, Costco alleges that it should not have to turn over the amounts requested by the state because it has engaged 3rd party rebate fulfillment houses to manage its rebate programs and that it does not retain the amounts at issue.

As those in the unclaimed property field know, this is far from the first lawsuit between holders and states regarding unclaimed rebates.  In 2006, some thirty-six states, led by Iowa, sued Young America Corporation - a rebate fulfillment house - over the failure to turn unclaimed property over to the states.  That lawsuit eventually resulted in a number of settlements between the states and Young America's customers.  We will continue to follow the developments in Washington.

Tuesday, March 8, 2011

Unclaimed Property in the Caribbean (Part III) - The Jamaica Banking Act

We've discussed unclaimed property laws in the Caribbean a few times (see here and here ), and now we add Jamaica to the list.  As noted in a recent article published by the Jamaica Information Service, "[t]housands of unclaimed bank balances amounting to millions of dollars, with sums in these accounts ranging from nearly $2 million to just over $500, are to be remitted to the revenues of the government."

Under the Jamaica Banking Act, banks are required to annually report all outstanding checks, drafts, and debts of the bank that have been outstanding for 7 or more years and all dividends remaining unpaid after 5 years.  The banks are permitted to retain custody of the property for 15 years.  Thereafter, the Minister of Finance is to publish notice of the abandoned assets, and after one year the property "shall lapse to and become part of the revenues of Jamaica."

Monday, March 7, 2011

The 100th Post: A Request for Comments

This week, Escheatable will be coming to you live from the 2011 UPPO Annual Conference in San Antonio, Texas.  Early indications are that attendance will be way up this year at this event, which is the premiere industry event for unclaimed property holders and their service providers.

Today also marks the 100th post of this blog.  Since last summer, Escheatable has attempted to provide news, analysis and commentary on important (and decidedly unimportant) unclaimed property law issues.  As we approach the next 100 posts, we invite your comments and criticisms.

Wednesday, March 2, 2011

UPPO Annual Conference in San Antonio

As a reminder, next week is the UPPO Annual Conference in San Antonio, Texas.  Join your fellow unclaimed property professionalsfor 3 days of unclaimed property classes, contacts and information. Regardless of your specific interests or level of expertise, there is something for everyone.  Basic, intermediate and advanced courses are being offered. There will also be a state administrator open forum, industry-specific breakout groups, and networking events.