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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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UPPO Asks: Unclaimed Property Misperceptions​

Posted By Administration, Thursday, February 14, 2019

Periodically, UPPO asks members to respond to a question, sharing their ideas, insights, and experience. The recurring UPPO Asks feature is a compilation of their responses. 

 

We recently asked several members: What is the most noteworthy or most frequent misperception you’ve heard about unclaimed property? 

 

“The most noteworthy misperception I hear is that MissingMoney.com and states’ websites are the only places to check for claimable unclaimed property.”—Paul Janisko, CEO, CoreUCP

 

 

“Most people think of unclaimed property as lost stuff, like umbrellas. They do not understand how that could pertain to my company.”—Amy Soler, administrative assistant, tax department, Solvay Business Services

 

 

“Sometimes it is challenging to convince management that the due diligence and other unclaimed property reporting requirements must be followed. Once I took a boss to an unclaimed property presentation provided by the state in order to show that the company needed to follow the unclaimed property rules. Many people that I speak with are still unaware that unclaimed property reporting rules exist. I have stated many times to colleagues who work at other companies, ‘No, you can’t write off old, uncashed checks.’”—Ruby Spiller, senior GL accountant, Infineon Technologies Americas Corp.

 

 

“A misperception on the work end of it would be that it’s easy. People within my company that I have talked to don’t realize how much work actually has to go into it. They just assume I throw a report together and send it off, when there is much more to it.”—Amy Lagunero, accounts payable specialist, Mortgage Guaranty Insurance Corporation

 

 

“The two most common misperceptions I’ve heard are: 1. As a holder, you only have to file in the states in which you operate; and 2. There is a uniform law that most states adopt. The reality is quite the opposite.”—Missy Key, vp – accounting, America First Credit Union

 

 

“1. Owners don’t realize how complicated the process is for getting escheated funds back from the state. Even when all of the required documentation is provided to the state by the owner, it can take years for the owners to get their funds back, if they are able to get them back at all.

 

"2. You don’t have to claim unclaimed property on taxes or as income.

 

"3. Owners don’t realize that their funds are sent to the state after the dormancy period. They often think that we just hold the money forever until they ask for it.”—Courtney Papinchak, accounting manager, Anadarko Petroleum Corporation

 

 

“The most frequent misperception I find for holders is the discounting of the gravity of their compliance responsibilities, recognition of its application and the degree of their potential exposure.

 

“The most frequent misperception I find for owners is that when searching for their properties they need to utilize searches for all name combinations, including aliases, in as many jurisdictions as possible, especially those individuals whose surname may also be a first name.”—Mark Watters, owner, Watters Unclaimed Property Consulting LLC

 

 

“They don’t think it affects them so they don’t care about unclaimed property.”—Susan Maul, senior manager, indirect tax, Arris International PLC

 

 

“The misperception I have often heard is that if someone is owed money from a company they would somehow be found. At this point, I gently explain that most often if the payee has changed address several times, or their last name has changed or whatever other circumstance applies, it becomes very difficult to track an individual – especially if no unique identifier is available, like a SSN or date of birth. I have personally experienced this many times as an escheat administrator since we do not collect SSNs or DOBs from our clients. 

 

“Another misperception I have heard of is if a due diligence letter is not returned by the U.S. Postal Service that means that the owner has received it and funds should not be escheated. Again, I gently explain that just because a due diligence letter was not returned undeliverable, we cannot assume that the owner received it. Since no response has been forthcoming from the owner, it is safe to assume that funds should be escheated.”—Antoinette Di Dato, accounting – compliance, GreenbergTraurig, P.A.

 

 

“One of the biggest noteworthy things in working for a TPA is that I rely heavily on our adjusters to contact claimants and providers when a check becomes stale dated. I am frequently asked to void checks because a claimant/provider is not able to be contacted or due to not having a current address. This is frustrating from my end because I know I am sending out due diligence letters to the wrong address, which means I’m not giving the state ‘good’ information when filing.”—Eric Nesbitt, accounting supervisor, Cannon Cochran Management Services, Inc.

 

 

“I guess the most frequent misconception is that once funds are moved to an unclaimed liability account, the business’s normal policy and procedures are eliminated. For instance, if the funds are related to a death claim, the misconception both internally and externally is that the death claim paperwork is no longer required in order to pay the funds out to the owner.”—Tony McDowell, senior accountant, American Equity Investment Life Insurance Company

 

 

“Common misperceptions in the oil and gas industry are that the states do not want every penny – for instance, only $50 and above; and that the states keep the money after a certain number of years of being unclaimed.”—Joni Byrd, senior advisor – land administration, EnerVest Ltd.

 

 

“The most frequent misperception I’ve heard about unclaimed property is individuals accept full responsibility for the recovery of unclaimed funds. If the statement were true, there wouldn’t be billions of dollars sitting on general ledgers of many companies. I believe some people don’t know the funds are there. Some think the funds are so small they aren’t worth the time and effort. Some don’t believe unclaimed property has anything of value. They believe it is a scam. But, I believe each fund-matters – each one has worth – each has a right to be claimed, and when added together the sum is astonishing.”—Monica Johnson, escheatment/unclaimed property manager, United Parcel Service

 

 

Now it’s your turn. What do you think are the most important personality traits for an unclaimed property professional? Add a comment to this post to share your response.

 

Tags:  unclaimed property  UPPO Asks 

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Developing a Strategy for Effective Asset Recovery

Posted By Administration, Wednesday, February 6, 2019

Unclaimed property compliance is a necessary, but expensive responsibility for many companies. However, unclaimed property professionals can help offset some of the costs associated with their role by taking on the holder. Seeking and recovering property owed to the company can turn an area that is normally a cost center into a profit center. 

 

Finding and claiming unclaimed property requires a well-planned and systematic effort. Some states publish unclaimed items only when they’re over a certain age or dollar amount, but these thresholds aren’t consistent from state to state. In addition, searchable data excludes a substantial amount of property held by cities, counties and other entities.

 

The complexities associated with a company’s structure and history compound these challenges. Property may not be listed only under the company’s current name. There may be property attached to numerous subsidiaries and other entities with different names, plus additional companies, subsidiaries and entities tied to mergers and acquisitions. Don’t forget about alternate spellings (or misspellings) and acronyms. 

 

Once property is located, recovering it can also prove challenging. Demonstrating that the property rightfully belongs to your company and that you have the authority to claim it carries another set of roadblocks. 

 

So, how should an unclaimed property professional approach this complicated task? Following are a few tips for making the process less cumbersome. 

 

Understand your company 

Having a comprehensive knowledge of your company’s business activities, holdings and history can help clarify the types of unclaimed property it is likely to have. Similarly, knowing the company’s legal names, DBAs, and merger and acquisition history is essential to conducting complete and effective unclaimed property searches. 

 

"To maximize recoveries, you must know your company,” said Kim Sawyer, consultant for PricewaterhouseCoopers. “Understand your M&A history, learn your corporate structure, identify all fictitious and previous names, appreciate your primary business lines and ascertain significant physical locations. Based on that information, create search and source lists. A search list consists of legal entities and fictitious name under which unclaimed property may be found. A source list narrows down where you are going to do these searches, based on clients, vendors and agencies that may owe you a refund.”

 

Build a reference library

Unclaimed property claims frequently require documents that verify the company’s relationship to its subsidiaries and predecessor companies. Maintaining a library of these documents makes the process easier and more efficient. The library should include: merger and acquisition filings, name change and fictitious name filings, an Internal Revenue Service letter containing the tax ID number, and a list of current and past real estate holdings.

 

Typically, the person signing for the unclaimed property must demonstrate the authority to do so. Depending on the holder or agency, proof may be as simple as company bylaws, but in many cases a secretary certificate or other specific documentation will be required. The signatory usually needs to provide a driver’s license for identity verification as well. 

 

“If you’re searching for a predecessor company that no longer exists, you’ll need documentation that the company was 100 percent owned by your company before it dissolved and, in some cases, you may have to legally revive the company before a source may pay out a claim,” Sawyer said. “When dealing with acquisitions, you’ll need to show documentation that your company is entitled to recover property that exists under the predecessor company’s name. Maintain these documents in an organized fashion because you’ll have to access them repeatedly.”

 

Get organized

A well-designed unclaimed property recovery system includes a thorough tracking document or database containing detailed, up-to-date information about searches, data requests and submitted claims. It should include property IDs, amounts, owner names and addresses, contact names and phone numbers, and scheduled follow-up dates.

 

Exercise care with third parties

If your company decides to seek assistance from a third-party specialist, perform due diligence to ensure you’re dealing with a reputable firm. Make sure you have a detailed explanation of the fee structure before signing any agreements. 

 

“It’s important to conduct background checks when considering a relationship with a third-party vendor,” said Donna Greenhalgh, unclaimed property supervisor with AT&T. “Seeking recommendations and feedback from other departments within your company may also be beneficial, since they may be using vendors that perform services for other purposes, such as tax services or audit support. Checking to see if they are UPPO members is also another worthwhile step.” 

 

Join UPPO for an in-depth look at recovering unclaimed property during the Recovering Assets for Your Company webinar at 1 p.m. EST on Feb. 13. Presenters Kim Sawyer and Donna Greenhalgh will provide insight and practical tips to help unclaimed property professionals find and recovery assets for their companies. Register today

Tags:  asset recovery 

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UPPO Advocacy Update: January 2019

Posted By Administration, Thursday, January 31, 2019

To help members remain aware of UPPO’s advocacy activities, the Unclaimed Property Focus blog recently began including a recurring Advocacy Update when legislatures are active or significant advocacy activity has occurred. Following are recent activities and trends from UPPO’s Government Relations and Advocacy Committee (GRAC).

 

More States Consider RUUPA-Inspired Legislation

With state legislatures back in session, it’s not surprise new RUUPA-inspired bills have begun moving. 

 

In Colorado, S.B. 88 would significantly revise the state’s unclaimed property statutes, including shortening of some dormancy periods and changes due diligence and reporting requirements. The bill has been assigned to the Business, Labor & Technology Committee for review. 

 

Likewise, Washington H.B. 1179 would update the state’s unclaimed property statutes, including provisions covering presumptions of abandonment, reporting requirements and due diligence requirements. The bill is scheduled for a Finance Committee hearing on Jan. 31.

 

A Noteworthy Trend

Two bills – North Dakota H.B. 1187 and Oregon S.B. 454 – would move administration of their states’ unclaimed property functions from the land commissioner and Department of State Lands, respectively, to the state treasurer. It’s not known whether this legislation was promoted by the National Association of State Treasurers, but the simultaneous consideration of two bills with essentially the same goal seems noteworthy.    

 

Priority Issue Workgroups

In preparation for the new congressional session, the GRAC Priority Issue Workgroups are finalizing talking points and single-page position papers about key issues. These materials will be used to help consistently demonstrate support or opposition of state legislation that is likely to affect unclaimed property compliance. 

 

As more and more legislatures and regulatory agencies take on issues affecting unclaimed property compliance, advocacy has become an increasingly important role for UPPO.

Please take a few minutes to complete our Government Relations and Advocacy Survey to help us build our grassroots network. Responses will give us the ability to mobilize UPPO members when we are faced with legislative and regulatory challenges and opportunities.

 

 

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Litigation Update: Univar Takes on Delaware

Posted By Administration, Thursday, January 24, 2019

Univar Inc. v. Geisenberger, et al.

 

On Dec. 3, 2018, Univar Inc. filed a lawsuit against Delaware Department of Finance officials, alleging that several aspects of an unclaimed property audit initiated by third-party auditor Kelmar in 2015 on Delaware’s behalf are unconstitutional. Among the issues at play in the Univar case are:

  • Delaware’s retroactive application of amendments to the Delaware Abandoned and Unclaimed Property Law (DUPL), amended on Feb. 2, 2017. 
  • The state’s estimation methodology.
  • The state’s use of a third-party auditor that simultaneously represents other states in a multi-state audit.
  • The state’s contingent-fee arrangement with its third-party auditor.

 

On Dec. 11, 2015, Delaware notified Univar it would be subject to an unclaimed property examination, conducted by Kelmar. Upon receiving document requests from Kelmar, Univar objected, citing confidentiality concerns, Kelmar’s self-interest, the estimation process and other aspects of the audit. According to Univar’s complaint, Delaware rejected or ignored the objections and continued to do so for more than two years. On Oct. 30, 2018, the state issued a subpoena for the records Kelmar had previously requested. 

 

The Univar case includes several issues that have been part of other recent cases, including Temple-Inland v. CookPlains All American v. Cook and Marathon Petroleum v. Cook. However, unlike those lawsuits, the Univarcase was filed after the February 2017 DUPL amendments and, thus, questions the state’s ability to retroactively apply those amendments to audits that were initiated earlier.  

 

“The subpoena power that Delaware is relying on to force production of records from Univar was not effective until February 2017,” said Jameel Turner, one of the attorneys with Bailey Cavalieri who is representing Univar in this case. “The February 2017 amendments also created a 10-year record retention requirement for unclaimed property records. Prior to that time there was no record retention requirement. Delaware is using estimation for holders that did not comply with a record retention requirement that did not exist until February of 2017. So, they are using estimation when holders do not have records for periods when the law did not require records to be kept. It simply does not make sense.”

 

Univar also picks up the challenge to Delaware’s estimation methodology where Temple-Inland left off. The Temple-Inland court ruled that the state’s estimation methodology was unconstitutional. Univar argues that Delaware merely added a 10-year look-back period but otherwise continues to rely on estimation practices already declared invalid.

 

Delaware and Kelmar also allegedly responded to Temple-Inland by rescinding its requests to holders for prior unclaimed property filings for all states because the court took issue with the practice. However, after the case was settled, these requests were reinstated and the state incorporated the right to request such prior filings into the 2017 DUPL amendments. 

 

“Delaware and Kelmar use prior unclaimed property filings for states not participating in the audit to increase the potential liability due and payable to Delaware,” Turner said. “Univar is asking a judge to confirm that the way they are using those prior filings is unconstitutional and that prior filings in nonparticipating states are not relevant to whether a holder has liability due and payable to any participating state.”

 

One of the issues in the Univar case that was also a factor in other recent litigation is the concept of ripeness. The Plains All American case also questioned Delaware’s use of estimation. The court said Plains may have valid complaints, but because the state had not yet formally taken steps to request records or force Plains to comply with the audit, the case was not yet ripe. 

 

“One of the reasons the Plains All American case was dismissed was because Delaware had not made a formal demand for compliance with the audit request,” Turner said. “Univar has been served with a subpoena, so Delaware has taken steps to formally compel Univar to provide records. That’s a significant factor that distinguishes Univar’s situation from that of Plains All American.”

 

Ultimately, a decision in the Univar case may provide clarity for unclaimed property holders regarding the state’s audit and estimation practices. 

 

UPPO will continue to monitor and report on the progress of the Univarcase as noteworthy developments occur.  

Tags:  audits  Delaware  estimation  litigation  Plains All American  Temple Inland  Univar 

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Unclaimed Property News Roundup

Posted By Administration, Wednesday, January 16, 2019

Unclaimed property often makes news headlines beyond the frequent reports of states trying to return money to their citizens. Following is a recap of some recent stories getting news coverage from local and national media outlets. 

 

Unclaimed property: It’s not just for individuals and companies

On Dec. 19, 2018, KMBC news in Kansas City, Mo., reported that the Kansas and Missouri unclaimed property owner lists included many schools and municipalities. In addition to the news story, reporter Matt Flener tweeted that more than 900 schools in Kansas are owed more than $143,000; more than 500 Kansas cities are owed more than $195,000; and Missouri has undetermined amounts owed to more than 600 schools and more than 1,400 cities.

 

Fraudsters hit Arkansas unclaimed property coffers

On Dec. 15, 2018, several Arkansas outlets reported that the state auditor’s office paid out at least $40,000 in fraudulent unclaimed property claims. The scammers used stolen identities to claim the funds. In response to the discovery, Auditor Andrea Lea told state officials her office had enhanced its verification process.

 

It’s not easy retrieving green

On Nov. 29, 2018, NBC Connecticut reported on challenges one of its viewers had claiming $138 in unclaimed property despite following the state’s instructions. The television station’s consumer reporter intervened and successfully helped the fund owner get her money.

 

Fame, fortune and uncashed checks

A popular, recurring unclaimed property news story highlights celebrities who appear on state unclaimed property lists. One of the latest examples of this appeared in the Nashville Tennessean on Nov. 21, 2018. The newspaper discovered that Tennessee’s unclaimed property list included two checks totaling $179 owed to musician Keith Urban, a $100 manufacturers rebate owed to singer Trisha Yearwood, and $150 in telecommunications payments waiting to be claimed by hockey player Pekke Renna.

Tags:  Arkansas  fraud  Kansas  Missouri  municipalities 

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