Tuesday, September 27, 2011

Ohio AG Signals Potential End to Dispute Over Interest

Ohio citizens who have claimed abandoned property from the state in recent years may soon be closer to collecting interest on those amounts. 

In some jurisdictions, the state does not have to pay interest on unclaimed property claims, notwithstanding the fact that the state earns interest on the money while it has custody of the funds.  In 1991, for example, the Ohio Unclaimed Property Act was amended to provide that interest was no longer payable to owners claiming property to the state.  In 2009, the Ohio Supreme Court ruled that the new law denying interest was unconstitutional.  In so doing, the court reasoned that noted that the Ohio Unclaimed Property Act was custodial in nature -- in other words, the state takes custody of, but not legal title to the funds.  The Ohio Supreme Court's 2009 decision, however, did not end the case.  The Supreme Court sent the case back down to the lower court for additional proceedings.

Some consumers have (understandably) gotten a little restless waiting for case to finally conclude.  All of this has put Ohio Attorney General Mike DeWine in a tough spot.  As Attorney General, Mr. DeWine is charged with representing both the interests of state agencies, as well as consumers.  Now, Jenn Strathman of ABC affiliate WEWS-5 (Cleveland) is reporting that the AG wants to settle the case.  Specifically, General DeWine told WEWS that he hoped the case is settled "fairly soon."

Why so much interest in interest?  According to the article, the Ohio Department of Commerce (which administers the unclaimed property program) estimated that the inerest payout will exceed $74 million.  If you think you are among those entitled to additional funds, more information can be found at the Department of Commerce's website here.

Monday, September 26, 2011

Unclaimed Property Crime Blotter V - This Time, it's an Inside Job

Welcome to another installment of Escheatable's Unclaimed Property Crime Blotter.  This probably doesn't come as a surprise to most, but because the states are holding on to millions of dollars in unclaimed property on behalf of missing, deceased, unknown, or forgetful owners, some less than scrupulous people think that there is an opportunity to make some easy money.  Many file false claims.  Others take advantage of the relationships with others who have valid claims to make a buck.  Sometimes, it's (allegedly) an inside job:

According to Fox 23 of Tulsa, Oklahoma, a former employee of the State Treasurer's office is charged with stealing unclaimed property held by the state on at least three occasions.  According to the article, the accused conspired with others to make, process, and collect false claims paid out by the state's unclaimed property program.  A copy of the full indictment is available from the Oklahoma Attorney General's Office.

Wednesday, September 21, 2011

Washington Sets Owner Reunification Records

According to a press release from the Washington Department of Revenue, that state's unclaimed property department paid out a record amount of claims (over 100,000) in Fiscal Year 2011.  According to the Department of Revenue, that record breaking performance was due "in part to a sharp increase in the number of businesses reporting unclaimed property to the state."  Regular readers may remember that just a few weeks ago, we mentioned that Nevada also broke its previous records for amounts remitted and claims paid.

To see if you or your company has funds that are being held by the State of Washington, you can visit the Department of Revenue website here.

Tuesday, September 20, 2011

Wisconsin State Treasury Taking Steps to Increase "Unclaimed Property Awareness"

According to a post on the blog of Wisconsin State Treasurer Kurt Schuller, the Treasury is undertaking various efforts to get Badger State holders "on board the compliance train."  In particular, the Unclaimed Property Unit has published the 2011 Holder Reporting Guide and has sent postcards to over 13,000 Wisconsin businesses.

Later this year, the Unclaimed Property Unit plans to post a variety of educational videos, and to host compliance webinars.  For more information or to express interest in these offerings, check out the Treasurer's blog or the Unclaimed Property Unit's homepage.

Wednesday, September 14, 2011

Meet Your Escheator: South Carolina State Treasurer Curtis M. Loftis, Jr.

Welcome to the second installment of Escheatable's "Meet Your Escheator" feature, where we provide interviews and commentary by state unclaimed property officials.  This time, we are thrilled to have South Carolina State Treasurer Curtis M. Loftis, Jr.  Treasurer Loftis took over South Carolina's "Palmetto Payback" unclaimed property program earlier this year and is also responsible for the state government's finances, as well as South Carolina's state 529 plans.  The Palmetto Payback website provides a wealth of information about the program, including FAQs for both owners and holders.  South Carolina has also embraced social media, providing information on Facebook, on Twitter (@TreasurerLoftis) and by participating in interviews with world-class unclaimed property blogs :)  We are grateful for the Treasurer's time and efforts to provide this information. 

1.   By way of introduction, can you give us an overview of your background prior to becoming State Treasurer?  Did you have any experience or involvement with unclaimed property and/or escheat laws prior to that time? 
Treasurer Loftis:  I spent 20 years in private business, owning and operating a pest control business. After retiring from operating the company (I still own a majority share) I dedicated myself to charity work, establishing the Saluda Charitable Foundation. I then went onto start my career in public service in 2007, serving as the  Director of The Office on Aging. I was able to reduce the organizational budget by 23%–allowing these funds to be re-directed to services for seniors. My private business experience is a blessing when it comes to knowing the rules and regulations that businesses must follow when dealing with customers' accounts. But I rely on the guidance and expertise of our Unclaimed Property staff to deal with the numerous issues surrounding Unclaimed Property. 
 2.  Can you give us background statistics on how much money South Carolina is holding? How about the number of claims per year?
Treasurer Loftis:  The Palmetto Payback program is holding 1.5 million accounts totaling nearly $300 million dollars. For fiscal year 2011, the program paid 30,932 claims, returning more than $12.6 million dollars to the rightful owners. For perspective, in fiscal year 2010, the program paid 13,629 claims.
3.  What error do you see holders making the most? What would you like them to improve?

Treasurer Loftis:  It is my goal to reunite as many owners as possible with their unclaimed funds. To do so effectively, we need as much information about the owner the holder has available. Not providing information like the last known address, social security number, date of birth, etc. not only makes it harder for us to locate the owner, but it makes it more difficult for us to verify ownership when claims are presented. 

4.  Does your office perform or participate in unclaimed property audits? If so, how do you select the companies that get audited?
Treasurer Loftis:  My office offers an informal voluntarily compliance program allowing us to work collaboratively with first time filers to assist them in coming into compliance. At the present time we do not have an internal audit staff. We issued an RFP for audit services several months ago and have awarded contracts to those auditors that met our requirements. We hope to start working them soon. 
5.  South Carolina, like other states, often auctions safe deposit box items that are remitted to the Treasury.  What is the strangest (or best) thing that your office has received as unclaimed property?
Treasurer Loftis: I can’t speak for past State Treasurers, but some of the most unique items we were able to return happened shortly after I took office in January 2011. Our staff was able to work with a genealogist and help locate a relative of Union Civil War Soldier Ira Cory.  The documents included a muster roll and papers outlining several battles. Capt. Cory took part in the Battle of Gettysburg. Our office was able to return these priceless documents to Capt. Cory’s great-grandson who lives in Ohio.
Link: www.treasurer.sc.gov/News/civilwarrelease.pdf
Video:  http://www.youtube.com/watch?v=RLUc4zxs6zA

6.  In the past several years, we've seen more interest among both holders and states with regard to IRAs, rebates, and gift cards. What areas do you think your office will focus upon most over the next few years?
Treasurer Loftis:  My office’s focus is in returning as much money as possible to the rightful owners, educating businesses as to their reporting obligations, and to assist holders to come into compliance.
 7.  Other than paying claims, is there any specific budgetary item for which unclaimed funds are used? (by way of explanation, in some states, unclaimed funds are used as general revenue, in others the funds are specifically earmarked for schools, highways, etc.).
 Treasurer Loftis:In South Carolina, until the rightful owner is located, the unclaimed funds are used by the legislature for purposes that benefit all South Carolinians. However, as with most states, the owner never loses his/her right to claim the funds. The funds will always be available to the rightful owner to claim.
 8.  What has been your biggest unclaimed property accomplishment as Treasurer?
Treasurer Loftis:  Our biggest accomplishment has been publicizing the Program in as many free media outlets as possible. We started with two TV news phone banks and have several other TV stations across the State also interested in sponsoring phone banks during their evening news broadcasts. We also use social media outlets like Twitter and Facebook to publicize the Program early on. We have held back on seeking more free media publicity because the response was so overwhelming early on. But once the backlog gets manageable, we anticipate more uses of free media and more public appearances to remind people of the Program.
9.  What is the unclaimed property area where your office has the most work to do?
Treasurer Loftis:  Publicizing the program comes at a cost in personnel time. Large public response results in numerous claims to process. To meet the increased demands on the Program’s resources, we have added additional part time claims processing staff. We are also exploring ways to use technology to assist with the claims payment process. Within the next 6 months we anticipate launching an on-line claims program. Claims for which the claimant is the original owner--and we either have a social security number on the account or the owner is still living at the address as provided by the holder--will be processed electronically. Once the program is functional, many of our claimants will no longer have to send the claim forms by mail, which will reduce the number of claims the staff must process manually thus greatly expediting the payments to the rightful owners.
10.  If you could give one piece of unclaimed property advice to the owner community, what would it be?
Treasurer Loftis:  Make a sincere effort to find the missing owners BEFORE the funds are reportable to the State as unclaimed. It is so much easier to locate owners shortly after you realize they are “missing” than to wait 1 to 5 years to perform the required due diligence. For those accounts for which you were unable to locate the owner, providing the State with as much information as you have regarding the account and the owner will increase the likelihood the funds will be returned to the rightful owner.


Tuesday, September 13, 2011

West Virginia's Treasurer Pens Op-Ed on Unclaimed Property Auctions

As you may know, not all unclaimed property is money.  Every year, thousands of safe-deposit boxes are abandoned, and their contents -- jewelry, coins, gold (of various kinds) and some more . . . unique items -- get sent to unclaimed property offices throughout the country.  We've made brief mention of these auctions before, but recently, West Virginia State Treasurer John D. Purdue wrote an Op-Ed piece in the Charleston Gazette explaining both the process, and the reasons for it.  While it is easy to assume that the state holds these auctions so that items don't just collect dust in storage areas, Treasurer Purdue explains some of the other benefits of the auction program: 
"Opening this process up to bidders nationwide offers a better sale prospect for the property owner. It increases the chances a serious collector might come across the item and appreciate its value. And whatever the item generates remains in the account owner's name while we continue looking for that person."
 For more information concerning West Virginia's actions, visit their auction page here

Monday, September 12, 2011

Programming Note: Meet Your Eschator Coming Wednesday

We are pleased to announce that we will be posting our second installment of "Meet Your Escheator" -- Escheatable's interviews with state unclaimed property administrators -- this coming Wednesday.  In case you missed it, our first interview was with Missouri State Treasurer Clint Zweifel.  Be sure to check on Wednesday, for our newest Q&A with South Carolina State Treasurer Curtis M. Loftis, Jr.

Thursday, September 8, 2011

Unclaimed Property in British Columbia, Canada

We've mentioned unclaimed property held in Canada before, but a recent article by James Kwantes in The Vancouver Sun has a good deal of information on unclaimed property held in the Canadian province of British Columbia (Canada, like the U.S., has a federal government, and unclaimed property is governed by the laws of each individual province).  The situation in British Columbia is quite unique in that a foundation - The British Columbia Unclaimed Property Society - not the government, has been administering the provincial unclaimed property program since 2003.

According to the article (which is well worth a read), the Society is currently holding over $90 million in funds, including some dating as far back as 1859 (even though BC did not become a province until 11 years later).

Wednesday, September 7, 2011

West Virginia Treasurer to Offer Holder Workshop

West Virginia's (and many other states') unclaimed property reporting and remittance date is upcoming on October 31st.  If any unclaimed property holders have reporting questions, the West Virginia Treasury Department has answers.  In particular, the Treasurer's Office is hosting an Unclaimed Property Holder Workshop on October 12 in South Charleston, West Virginia. 

Have your last-minute questions answered.  Details for the workshop can be found on the Treasury's website.

Tuesday, September 6, 2011

Another Record-Breaking Year for Nevada's Unclaimed Property Department

According to an article in the Record-Courier of Nevada, the Nevada State Treasurer, Unclaimed Property Division set a number of records last year with respect to unclaimed property.  According to the Record-Courier, the Treasurer's office transferred more than $83 million in unclaimed property collections to the state's general fund.  Not only did Nevada reach a record high in collections, however, it paid out more than $32.8 million in claims -- another state record.

If recent trends are any indication, these records may not stand for very long.  Nevada's previous records for transfer to the state's general fund ($66 million) and paid claims ($25.3 million) were both set last year.

Friday, September 2, 2011

UP Police Blotter: Wisconsin Lawyer Charged With Unclaimed Property Fraud

According to an article by Aaron Martin on BrookfieldNow.com, a Wisconsin lawyer faces up to 10 years in prison and fines of up to $25,000 for trying to fraudulently claim more than half a million dollars in unclaimed property. According to the article, the dishonest lawyer (no, that's not redundant) -- "targeted mortgage foreclosure cases in which foreclosed homeowners failed to collect surplus funds generated from homes being sold in sheriff's auctions."

This spotlights one type of unclaimed property that is very likely to increase for the next couple of years -- proceeds from sheriffs' sales.  In light of the huge uptick in foreclosures arising from the current financial crisis, many defaulted properties are sold by Sheriffs' sale -- a public auction (generally conducted by the county sheriffs' office - hence the name) at which the property is sold to pay off the outstanding mortgages.  Sometimes, however, the amount that the property sells for is more than the outstanding mortgage.  In that situation, the excess proceeds are the property of the former homeowner.

These excess sale proceeds were the item targeted by this fraud scheme.  According to the article, the rogue attorney "forged signatures on power-of-attorney documents and stamped them with bogus notary seals. He then filed the forged documents in Milwaukee County Circuit Court, duping judges into signing orders for payment of surplus funds."

Just as the jump in foreclosures has lead to more unclaimed property, so too will it lead many try to take advantage of it.




Thursday, September 1, 2011

New York Controller Goes On TV To Talk About Unclaimed Property

Recently, New York State Comptroller Tom DiNapoli appeared on ABC's Good Morning America to talk about unclaimed funds held by the Empire State.  According to the Rochester Democrat & Chronicle, the New York Office of Unclaimed Funds was able to locate approximately $44,000 for the crew and staff of Good Morning America (video here).

Of course, even for those not on TV, you can search for money held by New York State by visiting the website of the New York Office of Unclaimed Funds here.