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UNCLAIMED PROPERTY FOCUS is a blog written by and for UPPO members, featuring diverse perspectives and insights from unclaimed property practitioners across the U.S. and Canada. We welcome your submissions to Unclaimed Property Focus. Please contact Tim Dressen via tim@uppo.org with any questions about submitting a blog post for consideration and refer to our editorial guidelines when writing your blog post. Disclaimer: Information and/or comments to this blog is not intended as a substitute for legal advice on compliance or reporting requirements.

 

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Litigation Update: New Jersey Court Issues Merchandise Certificate Decision

Posted By Administration, Thursday, November 16, 2017

BBB Value Services Inc. v. Treasurer, State of New Jersey, Department of the Treasury et al. and Bed Bath & Beyond Inc. v. Treasurer, State of New Jersey, Department of the Treasury et al.

 

On Sept. 21, 2017, the New Jersey Superior Court Appellate Division issued an important decision regarding merchandise certificates. The plaintiffs in the original cases under appeal were Bed Bath and Beyond and its subsidiary, BBB Value Services Inc. The respondents were unclaimed property officials with the state of New Jersey. Both plaintiff companies had filed for refunds with New Jersey for escheated amounts attributable to merchandise certificates and were denied.

 

The merchandise certificates in question resulted from a Bed Bath and Beyond policy that customers who returned merchandise without a receipt would be given a certificate for merchandise or services, but not cash. From 2004 to 2012, Bed Bath and Beyond reported and remitted these certificates to New Jersey’s unclaimed property administration. In 2014, the subsidiary reported a sum attributable to certificates issued between 2010 and 2011. When denying the refund claims from both entities, the state argued that the merchandise certificates were considered credit memoranda.

 

The court reversed the state’s denial of both entities. Bed Bath and Beyond successfully argued that the merchandise certificates weren’t covered under New Jersey’s unclaimed property act, in part because they weren’t redeemable for cash. The court agreed that they didn’t fit the definition of “property,” ruled in favor of Bed Bath and Beyond and said the company was entitled to a refund.

 

The subsidiary, BBB Value Services, argued that the items in questions were stored-value cards and not credit memoranda under a July 2010 amendment to New Jersey’s unclaimed property act. As such, they weren’t presumed abandoned until after five years of inactivity and, even then, they should have been reportable at only 60 percent.

 

The subsidiary said that if the certificates were indeed considered stored value cards, the five-year dormancy period had not run. If they were not considered stored value cards, then they wouldn’t be subject to New Jersey’s unclaimed property act because they weren’t redeemable for money. The court agreed with BBB Value Services that the certificates were stored value cards.

 

The court ruled the state had erred by not giving BBB Value Services a refund. Thus, the subsidiary was entitled to a refund, but because the five-year dormancy period had now run, some of the property must now be reported. So, BBB Value Services was directed to file a new report.

 

 

Special thanks to Sam Schaunaman, recently retired senior manager at Ryan AUP and longtime member of the UPPO Government Relations and Advocacy Committee, for his frequent contributions to UPPO’s litigation update blog posts.

 

Disclaimer: This case summary contains a general description of the case. It is not intended as business, financial, legal, tax, reporting or compliance or other professional advice or services. This summary blog is not a substitute for such professional advice.

 

Tags:  litigation  merchandise certificates  New Jersey 

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Changes Proposed to New Illinois Unclaimed Property Statutes

Posted By Administration, Monday, November 6, 2017

On Nov. 1, Illinois Rep. Michael J. Zalewski filed House Amendment 2 to Senate Bill 868, which would make significant changes to the unclaimed property statutes passed under S.B. 9 in July 2017 and scheduled to take effect on Jan. 1, 2018.

 

Following are some of the most noteworthy changes included in the amendment:

  • Gift Card Exemption: The amendment more clearly defines “stored value card” (redeemable upon presentation at multiple unaffiliated merchants for goods and services or usable at automated teller machines) and “gift card” (cards that do not expire and are not subject to inactivity or post-sale service fees and that are for goods or services issued on a prepaid basis primarily for personal, family, or household purposes). It also eliminates gift cards from the definition of “property.”
  • Official Checks: The amendment includes in the definition of “property” any instrument on which a financial organization or business association is directly liable and gives it a three-year dormancy period.
  • Report Deadlines: Under the amendment, the report must be filed before Nov. 1 of each year by financial organizations and insurance companies other than life insurance companies. All other business associations, utilities and life insurance companies must file the report before May 1 of each year for the immediately preceding calendar year.
  • State Treasurer Interest Requirement: The amendment specifies that if an interest-bearing demand, savings or time deposit is paid or delivered to the administrator on or after July 1, 2018, then the administrator shall pay interest to the owner at the lesser of: (i) the percentage increase, if any, in the Consumer Price Index for All Urban Consumers for all items published by the United States Department of Labor (CPI-U); or (ii) the rate the property earned while in the possession of the holder and reported to the administrator. Interest begins to accrue when the property is delivered to the administrator and ends on the earlier of the expiration of 10 years after its delivery or the date on which payment is made to the owner. The administrator may establish by administrative rule more detailed methodologies for calculating the amount of interest to be paid to an owner under this section using CPI-U or the rate the property earned while in the possession of the holder.
  • Escheat Fees: Under the amendment, an escheat fee is defined at "any charge imposed solely by virtue of property being reported as presumed abandoned." Section 15-602 expressly stipulates that a holder may deduct an escheat fee from reported property if certain conditions are met, and removes a clause forbidding a holder from deducting an escheat fee or other charges meeting the stated definition.

The amendment was assigned to the House Revenue and Finance Committee and is scheduled for a hearing on Nov. 7, 2017. Because this is the last week the Illinois legislature is scheduled to convene this year, this amendment represents the last chance for changes to the law before its effective date.

UPPO will continue to monitor and report on the progress of this legislation.

 

Update: UPPO has received reports that Illinois unclaimed property officials plan to submit administrative rules to the Joint Committee on Administrative Rules by the end of December 2017, with the goal of making the rules effective in late spring of 2018.  



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Celebrate the End of Fall Reporting Season

Posted By Administration, Thursday, October 26, 2017

As October winds down, unclaimed property professionals deserve a pat on the back for surviving another fall reporting season. To help UPPO members who are searching for appropriate ways to let their hair down, blow off some steam and celebrate, we are pleased to offer a few suggestions. 

 

Put the fallen leaves in your yard to good use.

 

 

Find how your favorite football team has been doing.

 

 

Get some exercise.

 

 

Enjoy a nice bonfire with friends but, remember, safety first. 

 

 

Finally figure out what the pumpkin spice latte craze is all about. 

 

 

Dance like nobody’s watching.


 

 

Catch up on sleep.

 

All images from giphy.com

Tags:  fall reporting 

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Serving on the UPPO Board Opens Doors

Posted By Administration, Thursday, October 19, 2017

Serving on the Unclaimed Property Professionals Organization Board of Directors opens doors to new experiences, connections and opportunities. It offers the chance for members to influence the priorities of the organization and give back to others in their profession. 

 

UPPO is currently accepting nominations for the 2018 board election. Four positions – second vice president, secretary, Eastern vice president and Midwestern vice president – are open for nominations by Nov. 20. 

 

“I strongly encourage interested members to run,” said Heather Steffans, UPPO’s Midwestern vice president. “Serving on the board greatly enhances your involvement with the organization. You make connections with many more individuals across the organization, and increase your awareness of what’s happening in the industry. It allows you to provide feedback and ideas on how we can advance the organization’s three-pronged mission of advocacy, membership growth and education. I am continually amazed at the fantastic volunteer efforts that members put into the committees; seeing it first-hand participating as a board liaison. The discussions that occur during the committee and board meetings are efficient and productive.”

 

Serving on the board offers many benefits. As a board member, you can:

  • Lead your profession: Demonstrate and share your skills as a leader and influencer in the unclaimed property profession. 
  • Help guide your organization: Play an essential role in the setting the direction the organization will take. Represent fellow members, ensuring their voices are heard. 
  • Give back: Many UPPO members credit their active participation in the association as a key factor for their professional development, network depth and career growth. Serving on a board is a way to give back to the organization. 
  • Gain 501(c)(6) nonprofit experience: Expand your skills in and knowledge of a nonprofit organization’s operations. 
  • Grow your network: Board members develop new and deeper relationships with fellow directors and association members.
  • Expand your resume: Whether you desire to move up your current company or anticipate seeking new opportunities elsewhere, board experience demonstrates your leadership skills and involvement beyond the workplace. 
  • New expertise: As a board member, you’ll gain greater insight into the unclaimed property world and experience with issues you may not otherwise encounter.

Board members are often surprised by how rewarding their participation is – and by how many ways their dedicated time and energy pay off. 

 

“Overall, it’s been a great experience,” said Michelle Graf, UPPO’s Southern vice president. “I’ve learned a lot about the in-depth issues within UPPO and the unclaimed property arena. It also opens the door to new personal and professional connections. Serving on the board is unlike anything I’ve done before.”

 

Consider sharing your ideas, talents and skills by applying to become a board member today, or nominate a fellow UPPO member by Nov. 20, 2017. Learn more

 

Tags:  board of directors  election  nominations  UPPO 

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UPPO members play an essential role in growing membership

Posted By Administration, Thursday, October 12, 2017

The value of a professional organization like UPPO comes from strength in numbers. As membership grows, more knowledgeable individuals share their experiences and work to tackle common issues. So, it makes sense that recruiting new members is viewed as an essential, unending task for the organization.

 

Potential members often learn about UPPO from current members who are eager to spread the word about the organization’s benefits.

 

“The best individuals to sell the value that UPPO delivers are the members who have experienced it themselves,” said Chris Jensen, director of abandoned and unclaimed property compliance for Ryan. “Members can provide real-life examples about how they rely on other members to get questions answered or to come up with ideas to improve processes.”

 

When speaking with potential members, Jensen often touts three specific areas where UPPO shines:

  • Education: Webinars and the annual conference provide high quality education for professionals at all levels of experience.
  • Networking: Unclaimed property is such a niche profession that only those who are involved in it fully understand it. The ability to tap into that group’s knowledge is invaluable.
  • Advocacy: More than ever, holders and service providers need a voice fighting for them. Increasingly, UPPO gives them that voice.

James Santivanez, president and co-founder of JMS Advisory Group, believes encouraging client holders to become members builds greater trust.

 

“When our clients talk to other holders in their specific industry, they quickly learn that our advice and counsel is substantive and in line with what they’re learning,” he said. “That validation builds confidence and trust. If you have interested and engaged clients, you want them to be educated and to build their own knowledge base.”

 

Some of the other benefits that often resonate with potential members include tools and resources available on the UPPO website, including the Jurisdiction Resource Guide; and legislative and regulatory tracking via govWATCH.

 

“Any organization is going to be more valuable with as many intelligent inputs as you can gather,” Santivanez said. “It’s such an inclusive organization, whether you want to get involved in leadership, volunteer for committees, or just show up and quietly learn.”

 

As a token of appreciate for members who refer new members and to encourage member references, UPPO thanks recruiting members with a $100 gift card. To learn more about UPPO’s Membership Recruitment Program, access a digital version of the UPPO member packet or request printed copies, visit UPPO’s member referral web page.

 

 

Tags:  advocacy  education  membership  networking  recruitment  UPPO 

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