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Unclaimed Property Focus
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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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Unclaimed Property Fraud Hits LinkedIn

Posted By Administration, Thursday, November 1, 2018

Scams involving unclaimed property are nothing new, but the latest attempt at defrauding property owners uses a new tactic – a bogus LinkedIn profile designed to look as though it belongs to a state treasurer.

 

On Oct. 23, 2018, Nebraska State Treasurer Don Stenberg issued a warning that a fake LinkedIn account that appeared to be his had been used to contact unsuspecting recipients about unclaimed property. 

 

“I want Nebraskans to know that this impersonator has been active on LinkedIn and through email, and I am urging Nebraskans to contact my office immediately if they have any concerns or suspicions about notifications they have received claiming to be from the Nebraska State Treasurer’s Office,” Stenberg said.

 

The LinkedIn profile used the name “Don Stanberg” – one letter off from the treasuer’s actual name – and the title “Executive Director at National Association of Unclaimed Property (NAUP) – one letter off from the treasurer’s former position as president of the National Association of Unclaimed Property Administrators (NAUPA). 

 

The biography on the fake account profile was identical to Stenberg’s biography on the treasurer’s website, using the correct spelling of his name and his professional background.

 

The sender’s email address used in that communication was doncop960@gmail.com. Email messages were signed “Hon. Don Stenberg” and were identified as the treasurer’s private email address. All legitimate Nebraska Treasurer’s Office email accounts come from the nebraska.gov domain and end with @nebraska.gov. 

 

Despite the effort put into developing a somewhat convincing LinkedIn profile, the email text should be a tipoff to most recipients that it’s a scam. A Houston resident who received one of the emails was informed he was an heir to $12 million that a deceased client had deposited in a U.S. “Finance House in State of Nevada” that was “now lying DORMANT and UNCLAIMED.” The email was long and awkwardly worded, with poor grammar and confusing sentences.

 

Stenberg encouraged anyone contacted by the impersonator to contact his office with details.

 

Scams directed at individual property owners have sprung up often enough to warrant consumer warnings from several states in recent years. This form of fraud usually entails someone offering to help locate property for a fee or, like the Nebraska incident, promising a substantial (and completely fictional) windfall. Eager consumers either pay for bogus services or provide personal information that gives scammers access to bank accounts. 

 

 

Tags:  fraud  Nebraska  scam  unclaimed property 

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Unclaimed property is ripe for fraud threats

Posted By Administration, Thursday, January 5, 2017

Whenever large amounts of money change hands, the likelihood of fraud exists. Thus, unclaimed property presents a variety of opportunities for potential fraud. Property owners, state unclaimed property departments and property holders can all be targets of dishonest attempts to profit from unclaimed property.

 

Scams directed at individual property owners have sprung up often enough to warrant consumer warnings from several states in recent years. This form of fraud usually entails someone offering to help locate property for a fee or promising a substantial (and completely fictional) windfall. Eager consumers either pay for bogus services or provide personal information that gives scammers access to bank accounts.

 

Claims fraud is another common problem. Inspired by published lists of unclaimed property owner names, people misrepresent themselves to the state in an attempt to claim property that doesn’t actually belong to them.

 

Property holders must also be on guard against potential fraud, which often comes from internal sources—employees who identify opportunities to use unclaimed property for their own gain.

 

“One reason we see fraud related to unclaimed property at the holder level is because the money has been forgotten by the owner,” says Laurie Andrews, unclaimed property reporting technical director for Keane. “It may be sitting in a GL account that nobody touches or on an uncashed check list where the check has been floating out there for an extended period of time. The apparent owner may not know about the money or doesn’t seem to care about the funds.”

 

There are multiple methods dishonest employees use to access property not belonging to them. If a single person controls the assets, and prepares and submits unclaimed property reports, they may simply replace a legitimate property owner’s personal information on the report with their own details. They then go to the state to claim the funds.

 

In some instances, they may act before the property is escheated. Just before the end of the dormancy period, rather than doing due diligence and reporting an uncashed check to the state, for example, they may void and reissue it. To reduce the chances of detection, they cut the check to their credit card or utility company—perhaps the same one used by their company—instead of making it out to themselves.

 

“According to criminologist Donald Cressey’s hypothesis, with every fraud there are three components: opportunity, rationalization and pressure,” Andrews says. “The only one of those within the holder’s control is opportunity. Rationalization and pressure are self-imposed by a person committing the act. So, holders should take steps to reduce opportunity.”

 

Internal controls to safeguard held assets include:

  • Establishing a fraud policy.
  • Segregating duties.
  • Putting checks and balances in place for movement of funds between general ledger accounts.
  • Setting up software alerts to notify managers of unusual data changes for high-balance accounts.
  • Maintaining an ethical culture from the CEO down.
  • Conducting annual or periodic unannounced internal audits.
  • Holding annual fraud training throughout the organization and ensuring internal auditors have a thorough understanding of unclaimed property.
  • Keeping fraud procedures and unclaimed property procedures current with practices and requirements.
  • Maintaining an anonymous employee fraud tip line, and responding to allegations quickly and thoroughly.

 

“Internal controls will vary across an organization depending on property type,” says Ryan Hagerty, manager for KPMG. “It starts by having an in-depth system of checks and balances.”

 

Fraud threats against holders may also come from external sources. As with internal controls, policies, procedures and processes for handling and responding to claims should be thorough.

 

“While training of claims processors is important, multiple levels of management oversight should exist to ensure true segregation of duties,” Hagerty says. “The higher the value of the claim, the more layers of approval that should be required to reduce the financial impact of fraud at each occurrence.”

 

When dealing with property that has multiple owners—funds held in trust, multiple business owners and married couples, for example—extreme care should be taken when a claim attempt is made but all of the owners are not included. Business disputes, divorces and battles between heirs can lead to one party attempting to parties attempting to get more than their fair share.  

 

“Issues can arise when payments are owed to small businesses with multiple owners, individuals whose names have changed due to marriage, joint property owners or estate heirs,” Hagerty says. “When claimants request a refund check be issued in the name of their business or to the exact name and address the holder has on record, there is less of a concern of external fraud. However, caution should be taken if an individual attempts to claim property that is jointly owned or held in the name of a business entity. It’s important to require documentation to support the validity of these claims.”

 

Scammers seeking to claim another entity’s property may use fraudulent power of attorney documents they created and had unethically notarized. Unlike estate administrators and executors that can be easily verified, powers of attorney are not commonly registered by a government entity. This puts holders in a difficult position when faced with a claim from someone presenting power of attorney documents.

 

“Sometimes holders have to depend on the ‘sniff test,’” Andrews says. “If something doesn’t feel right, it probably isn’t, so you need to look into it further.”

 

To learn more about unclaimed property fraud, join Andrews and Hagerty, as they lead the Don’t Make a Fraudian Slip session at the 2017 UPPO Annual Conference. They will discuss how holders can tighten internal controls, safeguard assets, develop procedures for validating due diligence claims, and protect themselves against other potential scams.

 

 

Tags:  employee theft  fraud  powers of attorney  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 gknight@sco.ca.gov.

 

Tags:  California  fraud  preliminary report  unclaimed property 

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Fraudsters Using California Preliminary Report

Posted By Administration, Thursday, February 12, 2015

There’s been an ongoing discussion among UPPO members in the UPPO Forums about fraudsters attempting to claim money as a rightful owner. Allegedly these individuals are using the California Preliminary Report to get information of holders and owners, and then contacting holders to claim their unclaimed property. Being aware of the situation and knowing the red flags will help holders limit returning property to the incorrect individual.

 

In California’s spring newsletter to holders they provided tips to prevent remitting property to the incorrect owner, and ensure they are communicating with the rightful owner.

 

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.

 

Questions? Contact California’s Fraud Unit at (916) 464 - 6259 or email Gillian Knight at gknight@sco.ca.gov.

 

If you’re a UPPO member sign-in to the UPPO website and visit the Forums to join the discussion.

Tags:  california  fraud  holder  unclaimed property 

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