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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 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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Building positive relationships: Be open to talking to one another

Posted By Administration, Thursday, February 11, 2016

Any relationship that involves one party ensuring another party follows specific rules has the potential to become contentious. This is certainly the case with unclaimed property, in which state administrators enforce holder compliance with pertinent regulations and the possibility of an audit notice. However, relationships between holders and state administrators don’t have to be divisive. When both sides make a concerted effort to get to know each other, positive relationships develop, benefiting holders and administrators alike.


Often, contact between a state administrator and holder occur when there’s an issue, such as a problem with the holder’s reporting or the beginning of an audit. This isn’t the ideal scenario for establishing a relationship. Therefore, taking proactive steps when no such issues are in play is a much better strategy for making contact.


“Calling the administrators and introducing myself helps immensely,” says Lori Fitzgerald, director of unclaimed property at Computershare. “I’ll ask if there are any issues with our reporting, and the administrators have been very receptive. If something is outstanding or there are ways we can do things better, I’m giving them the chance to tell me. Once discussed, if there are any issues, responsiveness to the state is key. They don't forget that, and as long as they know you are addressing a concern, that’s all that they want.”


In fact, Fitzgerald has expanded her outreach beyond state administrators, building similar relationships with state reporting, reconciliation and claims unit personnel as well. Establishing those relationships makes it easier to contact the correct people when questions arise and, in some cases, to get a quicker response. When the people at the other end of the line already know you from previous, positive interactions, they may be inclined to give your issue a higher priority that those of other holders they don’t know.


Unclaimed property events, like the UPPO Annual Conference, provide ideal opportunities for holders and administrators to establish and build positive relationships.


“UPPO does an excellent job at its conference to create a positive environment where the states and holders can come together without the pressures they may face in their daily responsibilities,” says Chris Jensen, director of abandoned and unclaimed property for Ryan. “Holders and states can use that opportunity to establish relationships and then continue the dialogue after the event.”


Although not all state administrators regularly attend unclaimed property professional events, those who do find them beneficial, as do many holders and their service providers. For example, Texas has been extremely receptive to invitations to unclaimed property professional events, according to Jensen.


“Speaking in front of holders and networking afterward helps get them in an environment where they can establish relationships outside of the unfortunate circumstances that often bring the two parties together,” he says. “There’s no relationship without engagement, and that responsibility falls on both sides.”


Kathleen Lobell, director of the Louisiana Unclaimed Property Division, has participated in past UPPO events and recently presented during a NAUPA webinar that attracted more than 800 holders. Her office has also held its own holder seminars. Communicating with holders in these forums builds familiarity and gives holders and state administrators common reference points when initiating one-on-one discussions later. She encourages holders to reach out with questions as often as necessary.


“That line of communication is so important,” Lobell says. “I find that other state administrators feel the same way. We don’t want to be seen as an enemy.”


Being flexible and open to understanding each other’s points of view can go a long way toward creating mutually beneficial relationships. For example, although Louisiana doesn’t have a formal voluntary disclosure agreement (VDA) program, Lobell encourages holders needing to come into compliance to simply file their reports and include a letter requesting that they waive penalties and interest.


“We try our best to be very flexible when dealing with holders,” she says. “In my time here, we’ve never assessed any penalties and interest on voluntary disclosures.”


Leigh Underwood, senior manager of unclaimed property and insurance taxes for HCA Healthcare, echoes the advice to, first and foremost, do the right thing and make efforts to properly comply.


“Don’t wait on an audit notice to begin filing,” she says. “Go through a VDA program. If the state knows you’re not trying to pull the wool over their eyes, it goes a long way.”

In some cases, the holder may even find they share common challenges and can work together to find solutions. For example, Nevada requires separate entities to file separate reports. HCA Healthcare has more than 5,000 legal entities, making this requirement extremely cumbersome. Presenting the holder point of view to the state with UPPO’s assistance, Underwood has found Nevada to be open to working toward process improvements.


“They’re receptive to our issues,” she says. “They’re trying to make changes so it’s easier for both parties. In the meantime, we’ve worked out an agreement on how to file in a way that works for everybody.”


State administrators often don’t know how their operational policies affect holders until someone takes the time to clearly explain the challenges and ask if they can work together to find a reasonable solution.  While state administrators may be able to work toward improvements to unclaimed property reporting processes, it’s helpful to keep in mind that they aren’t responsible for making the laws. They too are sometimes hamstrung by the manner in which the laws were written.


“If a holder doesn’t like the law, the administrator, unfortunately, can’t do anything about that,” says Barbara Rice, state compliance liaison for Keane and former South Carolina unclaimed property administrator. “The administrator is obligated to enforce the law as written.”


Ultimately, positive relationships between holders and state administrators come down to open communication from both parties, a willingness to understand the other’s position and mutual respect.  


“Most state administrators are very willing to work with the holder community,” Rice says. “Just keep the conversations open and keep in mind we’re all after the same thing—getting the money back to the rightful owners.”


Tags:  unclaimed property 

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Can’t We All Just Get Along?

Posted By Administration, Thursday, February 4, 2016

Every day, unclaimed property holders and their advocates face the challenge of complying with inconsistent, sometimes vague regulations while under the constant threat of resource-heavy audits. Meanwhile, state administrators and their third-party auditors seek to enforce these regulations and ensure compliance by understandably defensive holders. It’s no surprise that relationships between the parties involved in the unclaimed property process are often fraught with confusion, frustration and tension. It’s easy for holders, advocates, state administrators and third-party auditors to develop an “us vs. them” mentality, leaving everyone wondering if it’s possible to live together in harmony.


During the “Can’t We All Just Get Along?” session at the 2016 UPPO Annual Conference, panelists will address frequent points of contention, explore the reasons behind each party’s approach and consider whether it is possible for everyone to get along.


Conflicts often arise because each party in the unclaimed property process has a different perspective. Panelist LeeAnn Dionne is a compliance officer with Boston Financial Data Services, the nation’s largest mutual fund transfer agent. In her industry, people often invest in mutual funds for the long term. They buy and hold, without the need to interact or make contact for long periods of time. This may be different than in other industries, causing frustration when unclaimed property regulations, especially inactivity rules, are applied to these shareholders.


Despite companies, including Dionne’s, investing significant resources on investor outreach, some property owners simply don’t respond, resulting in their funds being escheated and possibly liquidated by the state.


“These investors then don’t understand why their money is no longer invested in mutual funds,” Dionne says. “So there’s been an increase in investor claims, an increase in calls to investor services lines and an increase in complaints to the states to get their money back. The investors are not lost. They just chose to not take action on accounts that were meant to be long-term investments.”


State administrators share similar frustrations. Panelist Karen Anderson, vice president, reporting compliance at Keane, is a former administrator for Illinois and served as the first director of the National Association of Unclaimed Property Administrators (NAUPA). Her experience on the state side has given her significant insight into many of the unclaimed property nuances that may not otherwise be obvious in her current role as an advocate.  


“We don’t always stop to consider things from the other point of view,” Anderson says. “We just get frustrated about having to do something.”


For example, some states that require reporting electronically in the NAUPA format also require holders to send a hard copy. On its face, this seems counterintuitive. If the state has the data, why would they need a printed copy? Anderson explains that states receive so many reports simultaneously that they are unable to quickly load them all into their software systems. Thus, they need the hard copy to pay claims until the data is loaded.


“Sometimes there are really good reasons why they make these requests,” Anderson says. “They’re not doing it just to create extra steps in the process.”


Acting on behalf of their state clients, third-party auditors employ several strategies that confuse and frustrate holders. Panelist Jim Sadik, managing director of unclaimed property for True Partners Consulting, previously worked as a third-party auditor. In his current role as an advocate, he works with holders, who often become frustrated by the audit process. However, he understands the “methods behind the madness” from his previous work.


“It is not always obvious from the auditor’s perspective which legal entities should be included in the audit scoping, let alone what legal entities exist in the first place given the availability of public information,” Sadik says. “Consequently, auditors will initially include all subsidiaries and affiliated entities, throwing a big blanket over the entire organization with plans to whittle away at what’s actually included in the liability quantification, after the initial information request.”


The holder doesn’t care for this process because they want the states and auditors to define which entities they are auditing upfront and to stick to it, something states are generally reticent to ever do. It’s not obvious which parts of a company likely hold material amounts of unclaimed property unless the audit is conducted, and a rational and timely scoping exercise that appropriately focuses on the primary areas of business activity benefits both holders and states in moving the audit process along.


In addition to entity scoping issues, other areas of frequent conflict between auditors and holders include unrealistic deadlines assigned for turning over large amounts of data, inconsistent estimation methods, inconsistent standards for determining what constitutes communication between holders and owners, and the inability to get states and their auditors to officially close audits with no findings.


Despite all these differences, some states are extending an olive branch to holders, offering a compliance alternative. Voluntary disclosure agreement (VDA) programs are, in many ways, substantively comparable to audits, but they typically have a shorter look-back period, reduced penalties and interest, and importantly, allow holders to maintain greater control of the process. Panelist James Doody is senior accounting director at Drinker Biddle & Reath, which administers Delaware’s VDA program. He previously worked as an auditor with Kelmar and as an advocate. Doody believes the VDA program offers a greater opportunity for holders to come into compliance with their historic unclaimed property liability in a manner that is more efficient, more business friendly, and more collaborative.   


“Our role in the VDA program is to validate the self-analysis performed by the company, a stark difference from a third-party audit, where the auditor controls the document production and ultimately the assessment,” Doody says. “Don’t get me wrong, in administering Delaware’s VDA Program, we are very thorough in our validation of the holder’s self-review, but giving holders some control over the analysis leads to greater efficiency as well as collaboration. No VDA is like another, so it is important that when issues in the analysis arise that they are resolved quickly and fairly.”


The VDA offers holders the chance to perform a self-review, completing an internal audit, submitting it to the state for validation and ultimately reaching an agreed upon liability. The holder isn’t subject to the same hurry-up-and-wait deadlines imposed in a third-party audit, according to Doody.


“I think it’s a very good alternative to an audit,” he said. “We’ve seen quite a few companies take the opportunity to clean up all past-due liabilities and come into compliance in all jurisdictions. They start with a clean slate going forward, usually implementing a new unclaimed property review and reporting process, so they avoid this issue of having any past-due exposure in the future.”      


So whether it’s through participation in VDA programs, greater communication or simply taking the time to consider other parties’ motivations, can everybody get along? Perhaps, but it’s going to take a lot of work.


“Part of the problem is the profit motivation that is prevalent in the industry,” Sadik says. “The states profit from being able to hold and use funds until they are returned to owners, and they ultimately keep a lot of it. The auditors profit from contingency fees paid against the value of the property recovered. This payment mechanism, which is often pointed to as creating an incentive for auditors to inflate assessments, has not been significantly improved upon in 30 years. Holders are often compelled to hire third parties to assist in providing legal and accounting support, over and above the time incurred by their own staff and management to defend against an audit.  The audit process is likely to remain adversarial as long as there is property not ultimately returned to the rightful owner—a condition that will always exist. The spike in litigation in the past three years tells me it’s getting worse and not better.”


With so many issues complicating the unclaimed property process, sometimes it’s easy to lose sight of the reason it exists in the first place—to reunite owners with their property. But that shared goal may be the basis for finding common ground.


“Most administrators want to make it a collaborative environment so the owners win in the end,” Anderson says. “As holders, we have to be willing to try to see things from their side and meet them in the middle. We’re not going to agree on every issue and we’re not always going to be successful in negotiating a solution we’re 100 percent comfortable with, but I think we need to make the attempt. What we all want is the same—a fair, reasonable, consistent process that gets money back to the owner. So we have to focus on that shared goal. It’s just how we get there that is usually the issue.”


Join these panelists and moderator Robert Joseph, manager of unclaimed property for True Partners Consulting, for an in-depth discussion at the “Can’t We All Just Get Along?” session at the 2016 UPPO Annual Conference. This unique session provides the opportunity to share experiences and gain new insights into what other unclaimed property entities are thinking. Register today.



Tags:  audits  compliance  unclaimed property 

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Fraud originating from the California preliminary report is still an issue

Posted By Administration, Thursday, January 28, 2016

Last spring we reported on the issue of fraudsters attempting to claim property as the rightful owner. These fraudsters are using the data published from the California Preliminary Report to get holders’ contact information and sending fraudulent claim letters attempting to receive money not rightfully owed to them.

Below are red flags and tips to keep you mindful of the possibility, published in the California spring 2015 newsletter

Keep these tips in mind prior to releasing funds:

1) A holder should always request that the property owner provide proof of association to the property, such as:

  • Photo identification;
  • Proof of reported and/or current address; and/or
  • Proof of entitlement

2) A holder should always have a system in place to validate any documents provided.


3) A holder should always exercise caution any time a property owner:

  • Requests to change the reported address;
  • Requests a wire transfer (especially overseas);
  • Is irate and not willing to go through the claims process;
  • Threatens legal action; and/or
  • Changes his or her story

What to do when you believe the person doesn’t demonstrate ownership?

In these instances, California allows the holder to send the property to the State Controller’s Office to facilitate the reunification process.

If you’re interested in seeing an example of a fraudulent letter, here’s an example with holder and “owner” information redacted received by a holder.

Questions? Contact California’s Fraud Unit at (916) 464 - 6259 or email Gillian Knight at


Tags:  California  fraud  preliminary report  unclaimed property 

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State Spotlight: West Virginia

Posted By Administration, Tuesday, January 26, 2016

Like so many other people with a vested interest in the unclaimed property world, Carolyn Atkinson awaits the Uniform Law Commission’s (ULC) final draft of the Revised Uniform Unclaimed Property Act (RUUPA), scheduled for release in July. In her role as West Virginia’s deputy treasurer for unclaimed property, she is hopeful that the ULC develops an act that is beneficial for unclaimed property owners, holders, and administrators alike.


“We haven’t had new legislation recently,” Atkinson says. “We’re waiting to see what happens with the Uniform Law Commission in July. If the RUUPA will work for us, we’ll recommend adopting it. We hope it’s going to be beneficial because we’ve put a lot into the process.”


However, she also knows that with any legislative changes come some challenges.


“We’ve all sort of learned to live with what we have, so when that gets updated there will be some unhappiness on both sides simply because people have adapted to what we have,” she says. “There are certainly things included that are not controversial—like technology related issues, for example—but when they change other things too, that can upset the apple cart.”


Whether working through major changes like those that could result from the RUUPA or simply trying to get more holders to comply with their unclaimed property responsibilities, holder education is a significant focus for the West Virginia Unclaimed Property Division.


Each year, the division holds at least two holder workshops. This year’s will take place on April 19 in Huntington, W.Va., and on April 26 in Daniels, W.Va. Information and registration will soon be available for both on the state treasurer’s website. The division staff also present unclaimed property seminars to companies and business organizations throughout the year.


“We believe education is very important,” Atkinson says. “Most holders want to do the right thing. The best way we can help them do that is through educational outreach to get them on board with their responsibilities.”


Fortunately, the effort appears to be paying off.


“I think there’s an increase in compliance,” she says. “More unclaimed property has been reported in the last couple years. I think some of that is a greater understanding of what holders’ responsibilities are. That enables us to give back more money, which is the whole point.”


Much of Atkinson’s interaction with holders comes about from calls to her office requesting assistance. Although some holders may hesitate to call a state administrator out of fear that it could draw unwanted attention and lead to an audit, that’s not a valid concern, according to Atkinson.


“We certainly don’t select companies for audit because they’ve called us for help,” she says. “We usually look at companies who haven’t reported anything at all to us and who haven’t come forward. If they’re trying to comply, we want to work with them. We even have a voluntary compliance agreement they can enter into. Typically we will waive penalties and interest in conjunction with that agreement. If you wait until we have to audit you before you report anything, that’s when problems arise.”


In addition to holder education, West Virginia has a few unclaimed property projects in the works:

  • The state is in the process of changing securities custodians. Holders who report securities as unclaimed properties will need to report to the new custodian, which will likely be announced within the next month or two.
  • The unclaimed property division is working to increase its use of technology to improve internal efficiencies. Specifically, it is transferring all of its records to an electronic format. The changes shouldn’t have an impact on holders other than perhaps minor process adjustments when filing.
  • The division is also working on a project to use an external database to update property owner addresses. Implementation of this new process is expected to increase the amount of property returned to owners.

Whether it’s the pursuit of an acceptable RUUPA or working together to improve compliance, the West Virginia unclaimed property division and property holders have more in common than one might initially think.


“We view this as a partnership,” she says. “Ultimately, we have the same goal as they do to get property back to its rightful owner.”


More information

UPPO Jurisdiction Resource Guide

govWATCH legislative and regulatory tracking service

Tags:  compliance  RUUPA  unclaimed property  West Virginia 

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Inside the B2B exemption

Posted By Administration, Thursday, January 21, 2016

Unclaimed property laws exist to protect property owners, ensuring the ability to claim what is rightfully theirs. These laws are especially important for consumers, who may have no knowledge or record of property they legally own. However, several states have exempted businesses from these protections under the premise that they do not need the same level of protection as consumers. Businesses have more robust record-keeping systems as well as resources to manage their transactions and relationships.


“To B2B, or not to B2B,” a session at the 2016 UPPO Annual Conference, will offer an in-depth look at the various state business-to-business (B2B) rules, the nuances of applying the exemption, and the best ways to mitigate risk when doing so.


“The B2B exemption affords holders a really unique opportunity in a business function—unclaimed property—that is often thought of solely as a cost center,” says Michael Unger, unclaimed property manager at Crowe Horwath LLP. “These states have provided some favorable legislation, so holders should take advantage of that.”


As with other unclaimed property rules, not all B2B exemptions were created equally. States offering the exemption can be grouped into one of four categories:


  • Substantial exemption: Illinois, Kansas, Maryland, Ohio and Virginia offer the most favorable rules, exempting most B2B transactions and property types.
  • Partial exemption: Some states provide mostly favorable statutes but may apply some thresholds or property type limitations. These states include Indiana, Iowa, Massachusetts, Michigan, North Carolina and Wisconsin.
  • Limited exemption: A few states appear to exempt B2B property but require an ongoing business relationship. In practice, this exemption is actually a deferral. When the relationship ends, the dormancy period begins. States with a limited exemption include Arizona, Missouri, Nevada and Tennessee.
  • Administrative exemption: Although they don’t have a statutory B2B exemption, New York and Texas have taken the position through administrative advisories or actions that holders may be able to claim B2B exemptions.

B2B exemptions can be extremely beneficial, substantially decreasing a holder’s liability. However, applying those exemptions comes with some inherent organizational risks.


“There are not many exemptions that can be applied similarly across all of the B2B states,” Unger says. “Understanding the nuances is important.”


Among the questions holders need to consider when applying the B2B exemption are:

  • Which property types are exempt?
  • How does a state define a business?
  • Is due diligence required for items that are flagged as exempt?
  • Do exemptions apply for the holder’s specific business type—telecommunications, financial, or healthcare, for example?
  • How should documentation be handled and how long do records need to be maintained in case a state questions the exemption in the future?

“When someone asks about mitigating risk, I try to understand their risk profile,” Unger says. “One company might be more willing to take on risk for the benefit of the exemption. Others are more risk averse and would rather err on the side of reporting the item if they’re not sure whether the exemption applies or how the state intends the statute to be read. So it’s helpful to build a risk profile to determine what positions the holder wants to take and then be consistent with how the exemptions are applied each year.”


The B2B exemption is one of several areas under consideration by the Uniform Law Committee (ULC) as it works to finalize the Revised Uniform Unclaimed Property Act (RUUPA), scheduled for release this summer. Until recently, the ULC included two alternatives in the RUUPA draft—an exemption contingent on the holder and owner companies maintaining an ongoing business relationship (alternative A), and a comprehensive, blanket B2B exemption (alternative B).


UPPO advocated for the drafting committee to adopt alternative B, arguing that unclaimed property laws are intended to protect consumers. Businesses don’t need the support of the state to monitor unclaimed property because they have sophisticated accounting resources (software and staff) to manage business relationships. Often, amounts reflected as debts to other businesses are merely accounting errors that are later reconciled in some manner (e.g., settlements). Even if amounts are owed, businesses may make affirmative decisions not to pursue debts because the amounts owed are immaterial or for other important business reasons. UPPO also recommended that alternative A be deleted from the RUUPA as an unworkable option that would be difficult to implement and time-consuming, thereby adding unneeded challenges to compliance.


Unfortunately, the RUUPA draft issued before the October 2015 meeting eliminated the exemption alternatives, seemingly allowing each state to determine whether it will craft a B2B exemption.


“The ULC is in a difficult position of having to balance a lot of different stakeholders,” Unger says. Despite this challenge, Unger doesn’t believe it’s insurmountable. He points to tax structuring as an example of a system that offers a balance between governmental and business needs.


“If we can figure out how to structure the tax climate, I think we can figure out how to find a B2B exemption that’s going to work for all parties,” he says. “Policymakers and states have successfully navigated tax structuring to promote a climate that fosters long-term relationships with businesses. I think that we can do the same with the unclaimed property act and the B2B exemption. I’d like to think we could find something that isn’t going to sacrifice consumer protection but is also favorable for consistent filers of unclaimed property.”


B2B exemptions offer holders a great opportunity to lower their unclaimed property liability, but implementing them correctly is essential. For a more extensive look at the intricacies of B2B exemptions, attend the “To B2B, or not to B2B” session at the 2016 UPPO Annual Conference, March 20 – 23. Register today.


Tags:  B2B  exemption  unclaimed property 

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