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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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Analyzing Technology Solutions for Unclaimed Property Compliance

Posted By Administration, Sunday, February 24, 2013
Updated: Friday, February 22, 2013

Several weeks ago, we discussed the due diligence involved in assessing whether to outsource the management of the unclaimed property process. Outsourcing is certainly an option for handling all of the complexities yourself, but there are other alternatives, including implementing software solutions to help with the due diligence and reporting process. Technology solutions can help you gain efficiencies, reduce expenses such as overtime and provide compliance with reporting to the various states and jurisdictions.

There are a number of software service providers, many of them members of UPPO that offer technology solutions for your operation.

What are the BENEFITS of using a software package?

  • Many holders attempt to maintain complex matrices with the requirements for every state and jurisdiction. With ever-changing legislative and legal requirements, this task can be never-ending and difficult to maintain. Software systems are designed to comply with these requirements and as a result, software providers bear the burden of keeping abreast of changes.
  • Because your company may do business in multiple states and/or jurisdictions, software systems can help ensure you’re reporting the correct property to the correct state(s).
  • Many systems can quickly provide information to you regarding due diligence requirements. For example, if you need to know about the dormancy period in a specific state, a software solution should be able to provide that information.
  • Some software systems store property owner records in a central repository, rather than in multiple spreadsheets or other types of manual storage.
  • Software systems can aid in developing, refining and maintaining unclaimed property best practices.
  • Systems may be able to track previously reported property and reduce or even eliminate double reporting.
  • Technology solutions can aid you in providing compliance reports to upper management as well as forecasting for potential future unclaimed property liability.
  • Staying in contact with your customers and clients is important to reduce potential UP liability. Software systems can assist you with proactive contact and research.
  • Software systems can help reduce costly reporting errors, taking advantage of allowable exceptions such as B2B or Payroll, and offering available alternatives/requirements for due diligence contact requirements.
  • Perhaps one of the greatest advantages of utilizing a software system is the audit trail it can provide for your time sensitive activities, along with any changes to a record. This may prove invaluable if your organization becomes the subject of an unclaimed property audit.

What are some CHALLENGES with using a software package?

  • As we discussed in our previous third party outsourcing post, use of a specific product or service can be a matter of cost. It is important to determine the return on investment for your organization.
  • Depending on whether the software you choose is Web-based or a traditional licensed package housed on your internal architecture, available IT resources may be an issue, especially for smaller companies.
  • It is important to remember that software systems are not kitchen appliances! You rarely just "plug them in and they work.” Training and implementation efforts require time and resources to achieve the greatest results.
  • Technology will only be as good as your process. Remember the saying, "garbage in, garbage out?” Automating a bad process will only aid in making mistakes faster.

Here are few things to consider if you’re looking for a technology solution.

  • How do they track legislative, regulatory and legal activity? How quickly do they update their systems to reflect any changes? How often do they provide software upgrades and/or enhancements? Will they do any customization of the system, if required for your business model? If yes, at what cost?
  • What type of indemnification do they provide to you?
  • If there are any types of errors in the due diligence or reporting process, will they pay any penalties?
  • What platform options are available? Browser/hosted, traditional licensed software on your system or other.
  • If you are considering a hosted service, what is the guaranteed "uptime?” What redundancy systems do they have in place to reduce any downtime?
  • What support is offered and what are the hours for support?
  • Is support provided free or at an additional cost?
  • What type of installation and training resources do they provide?
  • What type of reporting and audit information does the system provide?
  • How does the product house and track data for multiple companies that have different states of incorporation?
  • Can you design your own search letters or use provided templates so your company can exceed due diligence requirements and find the rightful owners? Can you create a single letter for an owner with multiple properties?
  • Does your solution provide options for creating notices other than the typical due diligence (i.e., courtesy correspondence prior to the required correspondence, NY advertising, certified letters)?
  • How does the system identify what action was taken on each record? For example, is there a way to tell if the record was escheated to the State, paid to the owner, voided or any other action?
  • With some states requiring reports to be encrypted, does the system use encryption?
  • What types of industry holders does your solution support? (banking, corporation, oil and gas, life insurance, securities, etc.) Does it contain the differing report due dates based on those classifications?
  • Does the solution house any Canadian information?
  • What type of security processes and systems do they have in place to protect your sensitive data?
  • What types of options are available to assist you in setting access controls and security levels?
  • As with any service, it is important to check references, both current and past clients. Be sure there are at least two or three from your industry.

As an unclaimed property professional, staying abreast of the complex requirements and reporting properly is perhaps the most important part of your job. Software systems that automate the process can provide a huge benefit to you and your company, as they can provide peace of mind and confidence that you are employing best practices to enhance your due diligence and reporting compliance procedures.

A number of services providers that assist with unclaimed property due diligence will be exhibiting at UPPO’s 2013 Annual Conference in San Diego, March 24-27. If you haven’t registered for the conference yet, it isn’t too late. If you are registered, be sure to check out the exhibits while you’re there and see for yourself whether a software solution is right for your organization.

ADDITIONAL RESOURCES
Suggested Google Search Terms to Find 3rd Party Due Diligence Providers:

  • Unclaimed Property Software Systems
  • Unclaimed Property Due Diligence Services
  • Escheatment Software


The analysis and opinions expressed herein are those of the authors and do not necessarily represent the views of the Unclaimed Property Professionals Organization or its officers, directors or members. This summary document provides background information and is not intended as a substitute for legal advice.

Tags:  Due Diligence  education  Members  Service Providers 

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Guest Post: DE Secretary of State Bullock - VDA Program

Posted By Administration, Sunday, February 17, 2013
Updated: Saturday, February 16, 2013

Delaware’s New Voluntary Disclosure Program

By the Honorable Jeffrey W. Bullock, Delaware’s Secretary of State


Editor’s note: Secretary of State Bullock wrote this post as a guest author to help explain his state’s new VDA process to UPPO members. His office is the driving force behind Delaware’s new VDA process, which we featured in an earlier legislative update. Sec. Bullock will be part of our govSPEAK panel at the 2013 UPPO Annual Conference, where he will answer specific questions about Delaware’s new VDA program, as well as provide an update regarding the Delaware VDA program register online to secure your spot at the conference.

As the state that nearly a million business entities call home, Delaware values each and every company domiciled in the First State. Delaware is a state where companies want to do business because ours is a state with a reputation for clarity and fairness.

It was with that in mind that, on July 11, 2012, Governor Jack Markell signed into law Senate Bill 258, which created a new abandoned and unclaimed property voluntary disclosure program (the "VDA Program”) in Delaware. The new unclaimed property voluntary compliance program is administered through my department, the Delaware Department of State, and offers Delaware-registered business entities an opportunity to come into compliance with Delaware’s unclaimed property laws. The new VDA Program is intended to build on Delaware’s business reputation and specifically the reputation of the Department of State in providing quality service to Delaware’s corporate clients by making abandoned and unclaimed property compliance for Delaware companies cheaper, faster and easier.

Because we have designed a business-friendly VDA process, I believe almost every Delaware-registered business entity, regardless of their reporting history, should take advantage of Delaware’s new VDA Program. Companies that have made recent acquisitions, or have not retained complete and researchable records for 10 years or more, can avoid an audit, interest and penalties, and significantly reduce potential liability, all at the same time, regardless of reporting history. Even companies who have a robust unclaimed property reporting history that believe they are in compliance with Delaware law will receive greater certainty by going through our new VDA process tailored to that company’s circumstances and getting a release of all historic unclaimed property liability.

Under the new program, companies that enroll by June 30, 2013, will only be responsible for reporting abandoned or unclaimed property dating back to 1996. That’s 15 years less than under a Delaware unclaimed property audit. Additionally, companies that choose to participate will not have to pay any interest or penalties on that property.

Most importantly, companies that successfully complete the new VDA Program receive a release of all past due unclaimed property liability up to the present. After entering and completing the VDA Program, companies that fulfill their future annual reporting requirements are protected against Delaware unclaimed property audits for all prior years up to the date of execution of the final VDA Program documents. All the state asks in return is that companies continue to fulfill their ongoing responsibility to report and remit annually their Delaware abandoned or unclaimed property.

Since Senate Bill 258 was enacted in July 2012, I have been speaking to chief financial officers and professionals who have previously represented companies in Delaware unclaimed property audits about ways we can improve Delaware’s process for voluntarily reporting unclaimed property. As a result of those conversations, we have designed a VDA process to fit the needs of each and every company that enrolls. From the introductory meeting through the execution of the final release agreement, our goal is no different than that of the companies I have spoken to, which is to get into compliance as soon as possible in a way that is reliable, efficient, cost-effective, and most importantly, fair.

The alternative to voluntarily participating in the new VDA Program, of course, is the possibility of an unclaimed property audit, in which the Delaware Division of Revenue ("Division”) can examine a company’s books and records for unclaimed property compliance dating back to at least 1986. Such unclaimed property audits often take several years to complete, and the Division has the right to assess interest and penalties of up to 100 percent of a company’s total liability. Accordingly, the potential exposure for a company under audit can be as much as twice the potential exposure as under the new VDA Program.

As the Delaware Secretary of State, I take seriously my responsibility to listen to the concerns of our corporate constituents. My goals remain very straightforward: to administer a VDA Program that brings your company into compliance as soon as possible in a way that is reliable, efficient and cost-effective and also fair to all participants. I believe that this program is a good deal for Delaware companies and one that can save Delaware-registered business entities time and money. As a result, I urge every Delaware company to go to our new website, www.DelawareVDA.com, to learn more about the program and take advantage of this new initiative.


The analysis and opinions expressed herein are those of the authors and do not necessarily represent the views of the Unclaimed Property Professionals Organization or its officers, directors or members. This summary document provides background information and is not intended as a substitute for legal advice.

Tags:  Due Diligence  education  Policy  UP Laws 

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Advancing Growth and Change - 2013 UPPO Annual Conference

Posted By Administration, Sunday, February 10, 2013
Updated: Friday, February 8, 2013

The theme for the 2013 UPPO Annual Conference couldn’t be more appropriate for the unclaimed property profession. "Change” seems to be about the only constant that requires unclaimed property professionals to grow their knowledge and maintain compliance, in order to help protect a company’s bottom line.

The conference – which is being held in San Diego, March 24-27 – is three days of education and networking, as well as an opportunity to meet with service providers to the unclaimed property industry. The conference offers three tracks based upon the attendee’s expertise; basic, intermediate and advanced. This year there are also opportunities to hone "soft skills,” with sessions on public speaking, understanding others, being a better manager and building a broader professional network.

The event begins Sunday, March 24 at 2:00 p.m. with three "pre-conference” sessions; Unclaimed Property Boot Camp (basic), Getting Your Point Across: Public Speaking Methods and Technologies (all levels) and Pros and Cons of B2B (Intermediate/Advanced). Following these sessions, there will be a welcome reception and a UPPO Gives Back charity event to kick off the conference in rousing fashion.

The next two-and-a-half days will feature a full slate of educational topics that are listed in the conference agenda. Several of the "hot topics” will include the following:

· "Have I Got a Deal for You!” – Internet deals such as Groupon, Living Social and others pose new questions and implications. This session will discuss how these sites work and how the states view these types of transactions.

· "How Dodd Frank Impacts Unclaimed Property” – How does this Act, passed in 2010, impact your organization?

· "govSPEAK” Forum – A panel of state unclaimed property administrators will discuss activities for their various states and respond to your questions, while Delaware Secretary of State Jeffrey Bullock will highlight his state’s new VDA program.

· Speak "UP”: Looking into the future to predict the five most significant events that may impact unclaimed property.

New this year is the UPPO Scholarship Program 5K Fun Run/Walk on Monday, March 25 beginning at 5:45 p.m. All proceeds from this event will benefit the UPPO Scholarship Program.

We invite you register today and join hundreds of your colleagues in San Diego to get the latest information and education for unclaimed property professionals. If you have questions, please contact Jackie Cote or Ashley Hennig.

ADDITIONAL RESOURCES
Members as Mentors Webinar – January 2013 (members only)
UPPO Events


The analysis and opinions expressed herein are those of the authors and do not necessarily represent the views of the Unclaimed Property Professionals Organization or its officers, directors or members. This summary document provides background information and is not intended as a substitute for legal advice.

Tags:  education  Members  Service Providers 

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Third Party Due Diligence Services for UP Holders

Posted By Administration, Sunday, February 3, 2013
Updated: Friday, February 1, 2013

There is little doubt that managing a company’s unclaimed property can be a full time job. With the complex statutory and regulatory requirements, not to mention the tracking of property for dormancy, the subsequent due diligence to attempt to locate the property’s owner and the mandatory state reporting, for many unclaimed property professionals it is more than a full time job! Because of the very nature of managing unclaimed property, many UP professionals elect to use the services of a third party vendor to assist them in managing the process.

There are number of third party service providers, many of them members of UPPO that offer a wide array of services. Whether you want them to manage the entire process or just portions of it, you have a number of options available.

What are the BENEFITS of using a third party due diligence service provider?

  • First and foremost, you don’t have to know the legal requirements in every state. Service providers take over the burden of staying current on the ever-changing legislative and legal requirements in all states and jurisdictions.
  • Using your data from any open accounts, they run it against a matrix based on property type, statutory requirements and other factors to track property and determine when it becomes dormant (eligibility).
  • If your internal process is to locate property owners PRIOR to dormancy (pre-escheat), many providers will assist with that process.
  • When property is deemed dormant, they can perform the required due diligence, in accordance with applicable laws, to attempt to reunite the property with its rightful owner.
  • Tracking and responding to the communications with property owners is a critical piece in the due diligence process. Service providers can offer a variety of options including validation of the response; handle any subsequent transactions, etc.
  • Most providers are able to do all of your reporting, regardless of whether you report to one state or multiple states and jurisdictions.
  • Many will respond on your behalf to questions and/or inquiries made by unclaimed property administrators pertaining to filed reports.

What are some CONCERNS about using a third party due diligence service provider?

  • As with any service, it can be a matter of cost. It is important to determine the return on investment for your organization.
  • Sensitive client/customer data must be provided to the service provider for them to do their job. Data security is a key component when researching any of the providers.
  • Some UP professionals feel a loss of process control. It is critical that you understand how the provider will communicate with you to assure the process is being handled to your satisfaction.

Here are few things to consider if you’re looking for a third party due diligence provider.

  • How to they track legislative, regulatory and legal activity?
  • What type of indemnification do they provide to you?
  • If there are any types of errors in the due diligence or reporting process, will they pay any penalties?
  • What industries do they have experience in? Insurance, securities, banking, utilities, etc.?
  • Can they demonstrate they clearly understand what triggers dormancy and how "contact” is defined? In some cases there may be dual triggers so it’s important to be sure they understand your specific industry.
  • When they send due diligence letters on your behalf, do they use generic letters or letters formatted specifically to state statutes? Will they use your letterhead or stationery?
  • Will they perform the entire process for you and/or allow you to select specific processes? For example, they track your accounts, perform the necessary due diligence when a property type is deemed dormant, but you handle the reporting to the state(s).
  • What type of security processes and systems do they have in place to protect your sensitive data?
  • Will they respond on your behalf to inquiries from unclaimed property administrators regarding reports?
  • What type of flexibility do they have to respond to the owner?
  • How will they communicate with you to assure your standards are being met? What’s the frequency of reporting? If they are handling any transactions with property owners on your behalf, how do they reconcile with you?
  • How flexible is the company in working with you the first year versus successive years and does their fee structure accommodate the various volume levels? For example, if this is the first year you’ve reported, the volume may be much larger than it will be in subsequent years.
  • How flexible are they in providing responses to inquiries by owners?
  • Can they do address verification in advance of sending any letters to help reduce costs? If a potential owner has multiple properties, can they list them all on a single letter rather than individual letters?
  • As with any service, it is important to check references, both current and past clients. Be sure there are at least two or three from your industry.
  • Are they members of the Unclaimed Property Professionals Organization?

As an unclaimed property professional, it is your job to assure the organization’s compliance with unclaimed property requirements. Using the services of a third party due diligence provider can protect your company from an unclaimed property audit and impact the bottom line.

A number of services providers that assist with unclaimed property due diligence will be exhibiting at UPPO’s 2013 Annual Conference in San Diego, March 24-27. If you haven’t registered for the conference yet, it isn’t too late. If you are registered, be sure to check out the exhibits while you’re there!

ADDITIONAL RESOURCES
UPPO Members' Only Resource Page
Suggested Google Search Terms to Find 3rd Party Due Diligence Providers:

  • Unclaimed Property Consulting
  • Unclaimed Property Due Diligence Services
  • Escheatment Consultants


 The analysis and opinions expressed herein are those of the authors and do not necessarily represent the views of the Unclaimed Property Professionals Organization or its officers, directors or members. This summary document provides background information and is not intended as a substitute for legal advice.

Tags:  Due Diligence  education  members  Service Providers  UP101 

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Legislative and Regulatory UP-date: A Fast Start for the New Legislative Season

Posted By Administration, Monday, January 21, 2013
Updated: Friday, January 25, 2013

Legislative and Regulatory UP-date – A Fast Start to the New Legislative Season

Unclaimed property professionals understand that unclaimed property compliance can be a daunting task, especially if they are required to report to multiple states and jurisdictions. With no federal preemption for unclaimed property laws and regulations, keeping up with the ever-changing legislative and regulatory landscape can consume much of their time to assure they maintain compliance.

As state legislatures have returned to session, we have seen a flurry of activity in the unclaimed property legislative and regulatory arena. To assist our members with tracking legislative, regulatory and legal changes, the Unclaimed Property Professionals Organization (UPPO) tracks bills introduced throughout the United States and Canada and reports important information to our members weekly.

There are several key areas monitored weekly:

  • Appropriations
  • Dormancy Periods
  • Due Diligence
  • Gift Cards/Gift Certificates
  • Mineral Rights
  • Penalties and Interest
  • Reporting
  • Stored Value Cards
  • Miscellaneous

During the past two weeks 25 pieces of new legislation have been tracked and reported to our members through govWATCH, a weekly briefing on legislative and regulatory matters impacting unclaimed property. Of all the activity, perhaps the most watched piece of legislation concerns Delaware’s VDA program, which is being managed through the Secretary of State’s office.

Delaware House Bill 2 was introduced in early January and was passed Thursday, January 24, 2013 by the DE General Assembly on Thursday, January 24, 2013. H.B. 2 creates additional incentives for holders of abandoned property to report such property to the state and promptly resolve such claims. The bill expands the new voluntary self-disclosure program administered by the Secretary of State and enacted by the 146th General Assembly to further incentivize participation in the program.

  • Section 1 clarifies the existing duty of the State Escheator to protect confidential information by confirming that the existing duty covers the entirety of Chapter 11.
  • Section 2 amends 1177(b)(1) to provide holders that elect into a voluntary self-disclosure prior to June 30, 2013 up to one additional year to enter into an agreement and make payment or enter into a payment plan.
  • Section 3 amends 1177(d)(2) to clarify that a holder that has previously entered into a voluntary disclosure agreement prior to June 30, 2012 may enter into the new voluntary disclosure program with respect to any related party that was not included in an earlier voluntary self-disclosure or with respect to property types and/or periods that were not included in a prior voluntary self-disclosure agreement.

Delaware’s Secretary of State Jeffrey W. Bullock will be participating in a panel discussion at UPPO’s 2013 Annual Conference in San Diego, March 24-27. In addition to Secretary Bullock, the govSPEAK panel will also include unclaimed property officials Gary Qualset of California, Larry Schilhabel of Texas and Kelly Kuracina of New York. The govSPEAK session will take place on Wednesday, March 27 from 8:00-9:30 a.m. Pacific.

ADDITIONAL RESOURCES
UPPO’s govWATCH Program

UPPO News – Legislative and Legal sections

UPPO Members as Mentors Webinar, Jan 9. DE VDA Program (free to UPPO members)


This information is not intended as a substitute for legal advice on compliance or reporting requirements.

Tags:  Education  Members  Service Providers  UP Laws  UP101 

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