Showing posts from April, 2012

Unclaimed Property 101 Part 2 ("Where") - Jurisdiction - What State Makes the Rules?

Today, we are going to continue our break from the New Jersey gift card saga and take a step back to first principles by continuing our new feature to the blog:  "Unclaimed Property 101."  In these articles, we will provide a primer on the basic unclaimed property laws and policies that govern an unclaimed property holder's (or owner's) rights and responsibilities.  While this represents a departure from our gift card discourses, it is not entirely unrelated.  Indeed, most of the ink spilled for and against New Jersey's gift card legislation relates to the law's requirement that gift card sellers collect the purchaser's name and address (or at least zip code) information at the time of purchase.  Why does the law do that?  Good question.  Here's the answer: In the beginning . . . . In the beginning, there were no set rules for determining which state had the primary right to take custody of unclaimed property.  In many situations -- for example, a

MetLife Announces Multi-State Examination Settlement

Today, we break from one long-running unclaimed property story (the New Jersey gift card legislation) and return to another (the multi-state examination of life insurers' death benefit settlement practices ).  MetLife issued a press release yesterday, announcing that it was adopting "new processes" to govern the handling of claims that do not arise "in the normal course of business."  Note: the reference to "normal course of business" refers to the fact the policies that were the subject of the examination were those wherein the insured died, but no claim was made on the policy.  See here for a primer. In any event, the press release announces that as part of these new processes, MetLife will: "periodic[ally] match . . . administrative records against available external sources such as the Social Security Death Master File";    attempt to contact many of its older (over age 90) policyholders; and implement a new online

NJ Legislative Research Office: Gift Cards Worth $20-$25 Million Per Year to State

In connection with NJ Assembly Bill 1871 , which would reverse the changes made in 2010 to New Jersey's unclaimed property laws, the New Jersey Office of Legislative Services released its Fiscal Estimate Report on the proposed legislation.  While the OLS itself declined to estimate the lost revenue impact on New Jersey that would be a consequence of undoing the gift card legislation, it did recount testimony from the Unclaimed Property Division last summer wherein the Division estimated that the state would collect "$20 million and $25 million per fiscal year from the escheatment of stored value cards." The entire report can be found here .

An Introduction to Unclaimed Property - Part I (Who)

Welcome to a new feature that we will roll out over the next few weeks on this blog:  An Introduction to Unclaimed Property.  For regular unclaimed property professionals, this is just a refresher.  Really, these posts are intended for you if you are: An accounting or finance professional who has just been told that you will be responsible for unclaimed property compliance; An in-house counsel who is dealing with a legal/compliance issue relating to your company's unclaimed property responsibilities; The unlucky recipient of an audit notice from a state or private third-party auditing firm; A reporter looking for an unclaimed property primer; or Someone simply interested in learning more about unclaimed property (in which case, we'd suggest you get a hobby). As a general rule, "unclaimed property law" refers to a statutory regime in every state (plus the District of Columbia, Puerto Rico, the U.S. Virgin Islands, and a number of foreign jurisdictions) whereby

An Update on the Kenyan Unclaimed Property Act

Last fall, we mentioned that Kenya was considering passing an unclaimed property law that was very similar in scope and application to unclaimed property laws in the United States.  That law  was passed and went into effect on December 16, 2011.  A copy of it can be found here .  As a review of the law makes clear, the provisions of the Kenyan act appears to be very similar to those of the 1981 Uniform Unclaimed Property Act, only with a 2 year dormancy period for most property types. Although the Kenyan Act just recently came into effect, its application could be significant.  According to a recent editorial in Business Daily Africa , commercial banks in Kenya are holding approximately 7.4 billion Kenyan Shillings ($88.8M US) in dormant assets. Like its U.S. counterpart, the Kenyan act requires holders to send written notice to apparent owners of unclaimed property, and requires annual reporting.  As the editorial makes clear, however, the Act is decidedly silent on what (if any)

Lost & Found: PA Reporting Deadline, OK Trial Set to Begin, Philly Sheriff Settles (. . . and Cookies!)

Some snippets from this week that don't relate to New Jersey and gift cards: Pennsylvania Reporting Deadline Coming - Most state unclaimed property reports are due in the fall, but there are a handful of "Spring" reporting states.  In this press release , Pennsylvania State Treasurer Rob McCord reminds holder's that Pennsylvania's report deadline is on April 15th.  Holders with questions or who need assistance in advance of the deadline can contact the Treasurer's Office. Trial Set to Begin For Former Unclaimed Property Auditor - Last September, we  mentioned   the story of a former Oklahoma unclaimed property auditor who was charged with stealing unclaimed property from the state.  Now, according to  The Oklahoman , the trial of the former auditor, LaTisha Reid, is scheduled to begin next Wednesday. Philly Sheriff Settles With State   In early 2011, we  mentioned an unclaimed property investigation of the Philadelphia Sheriff's Office concernin

New Jersey Issues (Misleading) "Real Story" on Gift Cards; Trade Group Counters With (Somewhat Misleading) Response

. . . and so it continues.  Those of you hoping for a relatively genteel, thoughtful and well balanced discourse concerning the relative merits and risks of New Jersey's 2010 gift card laws are sure to be disappointed. When we last left the saga of New Jersey's 2010 gift card laws, three gift card retailers had pulled out of the state, citing an inability or unwillingness to ensure that it could comply with New Jersey's gift card rules.  For its part, the state responded with a press release wherein it purports to provide the "Real Story" with regard to the legislation, and provides some FAQs to address concerns.   Unfortunately, while the state purports to provide the "real story," the canned FAQs provided are quite misleading.  The primary problems with the state's press release fall into two main categories: 1.  Complete Silence on the Federal CARD Act -- In several places, the state's press release contends that "after two years o

Lost & Found: UPPO Events, Wisconsin Hits the Road, Missouri Shows Haul

UPPO Holder Seminar Coming in July -- For those of you in the Pacific Northwest, the Unclaimed Property Professionals' Organization will be holding a Holders' Seminar on July 16-17 in Seattle, Washington.  The Seminar will cover a variety of beginner and intermediate relating to unclaimed property reporting, audits, and legislative changes.  The agenda can be found here .  As we've mentioned several times, the UPPO is a fantastic resource for unclaimed property professionals.  If you are interested in learning more and can make it to Seattle, it will be well worth it.  If you just can't wait until July for your dose of UPPO-y goodness, they are sponsoring an April 30th webinar to provide "the State's Perspective" on unclaimed property.  More info can be found here . Wisconsin Treasurer on Unclaimed Property Tour -- According to the  Wisconsin State Treasury Blog (a must read for Badger State residents), Wisconsin State Treasurer  Kurt Schuller wil

Breaking News (Updated): Second (and Third) Gift Card Retailer Leaves NJ

Coincidence or Exodus?  According to the Associated Press , a second company is pulling gift cards from New Jersey shelves in response to that state's unclaimed property requirements.  According to the article , Atlanta based InComm (which provides Visa, Macy's, iTunes and other gift cards to more than 2,500 retail locations) is leaving New Jersey at the end of June.  InComm, like AmEx before it , has cited compliance with New Jersey's unclaimed property law (which requires sellers to collect purchaser name and address information at the point of sale) as the reason for the withdrawal. UPDATE (5:15pm):  According to an additional AP  article , a third card seller, Blackhawk Network, has joined the exodus.

Gift Card Litigation Fallout -- AMEX Pulls Out of New Jersey

Earlier this year, the U.S. Court of Appeals for the Third Circuit ruled on New Jersey's 2010 legislation concerning stored value cards.  Though the appellate court ruled that certain parts of the law probably had to be struck down -- most notably the use of a so-called "transactional rule" at odds with Texas v. New Jersey , the court upheld what was colloquially referred to as the "Zip Code Requirement."  As you might imagine, that portion of the law required gift card sellers to collect purchaser and/or owner zip code information at the point of sale (presumably to avoid unused funds from escheating, if at all, to the state of the card issuer's domicile. In connection with that litigation, some card issuers indicated that they would simply stop doing business in New Jersey if the new law was upheld.  At the time, it is unclear whether anyone took that to be a serious threat.  Yesterday, according to The Associated Press , American Express made good on i

What California's Unclaimed Property Statistics Mean

Recently, the California State Controller's Office (the CA government entity responsible for administering that state's unclaimed property program) released a variety of charts and statistics relating to property returned by California to owners from 1997-98 to 2010-11.  While the amounts of cash returned , securities returned , and notices mailed to owners seem impressive (and frankly, are impressive), the huge uptick in each of these items doesn't tell the whole story:  The huge uptick appears to begin in 2007.  As you may recall, in 2007, the California Unclaimed Property Department was  shut down by a federal court for what the court determined was a violation of owners' due process rights by the state.  As a result of that injunction, the state passed new legislation that, among other things, required both the holder and the State to make attempts to notify the owner. In other words, while holders in California -- as elsewhere -- send due diligence notices t