MoneyGram “Official Checks” Cause Unclaimed Property Dispute with Delaware

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As of June 2016, 23 US states are in legal dispute with the State of Delaware and MoneyGram Inc over the alleged improper handling of unclaimed property in the form of uncashed checks.

MoneyGram, which is incorporated in Delaware, offers a service of issuing “official checks,” which work similarly to money orders. But unlike a money order, MoneyGram merely backs the “official check” and pays the check amount only upon presentment. When an “official check” is never presented for payment, MoneyGram doesn’t release the money it collected for the “official check.” Thus, MoneyGram accumulates hundreds of millions of dollars each year in unclaimed funds when these checks are not presented.

The dispute hinges on whether the official checks are properly classified as third-party bank checks (as Delaware directed MoneyGram to remit them as) or are more similar to “money orders”, which under the Disposition of Abandoned Money Orders and Traveler’s Checks Act of 1974 (Act), entitles ownership to the “the States wherein the purchasers of money orders and traveler’s checks reside”.

Delaware Becomes Last State Not to Seek Unclaimed Property Owners before Escheatment

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Provisions in Pennsylvania’s new budget will leave Delaware the only state left that doesn’t require notification be sent to owners of dormant assets prior to the remittance of assets to the Department of Treasury.

Pennsylvania, like other states, now demands holders make a real effort to find the owners of unclaimed property, by way of first class mail with description of the property, the property’s owner, its value and how to contact the state treasury.

Historically, Pennsylvania and Delaware have been the only two states in the nation to NOT require that notification be given to property owners before unclaimed property is transferred to the state. When Pennsylvania enacted these changes (effective on September 10 2016), Delaware became the lone state with no such consumer protective provision in their unclaimed property law. Delaware’s aggressive unclaimed property collection tactics are already under fire as a result of lawsuits brought against them such as by Temple Inland and other disputes among states over ownership of unclaimed property.

Beware of Unclaimed Property Scams

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Although there are many great organizations out there that are sincerely working to reunite lost assets with their rightful owners, there are also many fraudsters out there in the world of unclaimed property. It’s best to be aware of the various unclaimed property scams that are out there in order to avoid them. Consumers should be diligent and carefully review letters or emails they receive regarding unclaimed property.

The most common form of unclaimed property scam comes in the form of email. Various states in the US have heard reports from citizens who received false emails notifying them that they are owners of unclaimed assets and luring them into calling an overseas toll telephone number to retrieve their supposed funds, then using various schemes to keep them on the line as long as possible.

A more recent scam involved fraudulent letters telling consumers that they are entitled to unclaimed sweepstakes and need to send money to purchase “the necessary Federal State Registration Stamp” to claim the so-called award. This particularly deceptive message is written on fake NAUPA (National Association of Unclaimed Property Administrators) letterhead and requests money be sent to claim the property.

Other scams out there are aimed at getting your personal information, most likely to get bank account numbers or other financial information in order to commit identity theft.
The following is a list of tell-tale signs that you may be dealing with an unclaimed property scam artist:

• It comes as an email. State unclaimed property offices do not use email to contact you.
• It claims to be from the National Association of Unclaimed Property Administrators. NAUPA is an organization that unclaimed property administrators belong to. NAUPA does not reunite people with their missing money.
• You’re asked for your bank account information. You may have to supply personal information such as your social security number to make a legitimate unclaimed money claim, but you will NEVER be asked for your bank account information.
• There is an upfront fee to file the claim. State governments do not charge money for searching their database of unclaimed accounts or for making a claim.

One in Ten Americans Owns Unclaimed Money

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There is a chance that the US government might be holding unclaimed money in your name and waiting for you to claim it. Throughout a person’s lifetime, the chances of inadvertently leaving a trail of unclaimed property is higher than one might think, even among those who are particularly financially organized. Opening a bank account, purchasing an insurance policy, paying taxes, changing jobs, paying into retirement programs or pensions, purchasing stocks, moving addresses – these are things we all do that could result in unclaimed property.

Suppose your last payroll cheque is issued to an old or incorrect address after a career change. Perhaps a bank account is forgotten or left dormant with no activity for many years. Or maybe an insurance policy was not redeemed upon the death of a family member, or a tax refund cheque was never cashed or sent to the wrong address.

Experts estimate that 1 in 10 Americans is owed unclaimed property by one or more government entities around the world. Visit our Inquiries and Database Searches page to submit your name for a free global search.

How Exciting is it to Recover Unclaimed Property?

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From Treasure Island to Storage Wars, one thing can be said for certain – everyone loves a good treasure hunt! There’s nothing more thrilling than the prospect of becoming instantly rich. Here’s 5 reasons why embarking on your own treasure hunt for unclaimed property with AssetMine can be incredibly exciting!

  1. The Stakes Are High – Currently the AssetMine database holds an estimated 150 assets over $1 million dollars. There are 28,000 assets totaling $2 billion with a value of at least $30,000! The highest known value asset is currently worth $5,279,789.70!
  2. Better Odds – approximately 1 in every 10 people in the US has unclaimed property. That’s much better odds than finding a lost treasure from a map!
  3. Easy to Search – the AssetMine proprietary global database enables clients to quickly and efficiently search anywhere in the world for their unclaimed property. The database is constantly being updated with new unclaimed assets as they become available.
  4. Easy To Claim – if ownership can be proven with the right documentation, and especially with the help of unclaimed property recovery professionals such as AssetMine, it can be relatively simple to initiate a claim. No fumbling through storage lockers, or digging holes on desert islands!
  5. Anyone Can Do ItGet in touch with AssetMine today. Searches are free and payment is only due upon the successful recovery of your assets!

How AssetMine Recovers Global Unclaimed Property for Corporations

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AssetMine Global Unclaimed Property Experts use sophisticated search algorithms and state-of-the-art technology to efficiently track down dormant financial assets that are held in unclaimed property treasuries around the world. Individuals, Governments, and Corporations alike are losing track of assets which then become escheatable and held by governments around the world awaiting claim. The amount of money being forgotten each year continues to grow and each year $3 billion to $4 billion is deemed lost or abandoned.

Corporations and small businesses are known to have unclaimed property dispersed over many geographical regions. This is due to them operating in many locations and/or frequent transactions with other entities nationwide or internationally, thus increasing likelihood that assets become lost.

Using the AssetMine proprietary global database, global searches for unclaimed property can be executed quickly, effectively, and on a large scale. The process for corporate clients can be summarized in 4 steps:

  1. AssetMine obtains a corporate lineage – a list of all official company names, alternate names, acquisitions and affiliations.
  2. AssetMine conducts a free-of-charge global fuzzy search, which even uncovers asset listings that contain misspellings, non-standard punctuation, abbreviations and acronyms.
  3. AssetMine provides client with a draft of found asset listings for review and confirmation of ownership.
  4. AssetMine proposes a contract for claiming assets on client’s behalf and is paid only on success.

Steps 1 to 4 are repeated regularly to ensure assets are located and claimed as soon as they become available. Get in touch today to find out if there is any unclaimed money out there for you or your business.

Unclaimed Property Legal Dispute: Delaware vs Temple Inland

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Delaware is home to more than a million business entities registered in the state due to favorable conditions for business and taxes among other benefits. They are also known as one of the most aggressive states in pursuing unclaimed property which represents a significant source of their annual state government revenue.

Delaware collects an especially large amount of unclaimed property as a result of “priority rules”, set forth by a series of US Supreme Court cases, which state that unclaimed property should be turned over to the holder’s state of incorporation in cases where the rightful owner’s last known address cannot be determined.

As a result of an ongoing lawsuit brought forth in 2014 by Temple-Inland Inc, a packaging manufacturer incorporated in Delaware with its principal place of business in Texas, Delaware’s aggressive unclaimed property collection tactics are under fire. Specifically, the Federal District court regarded Delaware’s unclaimed property escheat practices as, “a game of “gotcha” that shocks the conscience.”

The court case examines Delaware’s use of and methodology for liability estimation in state-driven audits. The allegations stem from an unclaimed property audit initiated by Delaware where unclaimed property liability was analyzed reaching back to 1986. For the years that Temple-Inland did not have complete records, Delaware’s contract auditors estimated the unclaimed property liability. The liability assessment at the end of the audit was over $2.1M, an exorbitant amount in the view of Temple-Inland.

In a June 2016 ruling, the court ruled that Delaware’s unclaimed property audit of Temple-Inland, Inc. violated substantive due process. However, the court also noted that the “reasonable estimation of a holders’ unclaimed property liability is not an unconstitutional taking”.

Will Delaware further amend its unclaimed property legislation?

UPDATE: In August 2016, news spread that Temple Inland and the Defendants had filed a joint motion to dismiss the case based on a recent voluntary settlement between the parties.

Unclaimed Property Compliance in the US: Voluntary Disclosure Programs

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Many US states offer corporations holding assets the chance to comply with unclaimed property laws via Voluntary Disclosure Programs (“VDP’s”), encouraging holders to proactively cooperate on their own rather than undergo the potentially more daunting reactive process of a state-driven audit. Companies who proactively enroll in their state’s VDP are better off since they can conduct their own self-audit and potentially avoid some interest and penalties for non-compliance, which can be significant.

The following are some considerations for holders entering into VDPs:

• Review your state VDP documentation thoroughly. Note that the rules vary slightly by state.
• Understand how historical exposure will be calculated. If historical records can’t be provided, estimation may be necessary for some states.
• Make sure your company qualifies. Typically, your company can’t already be under audit.
• Once conducting the self-audit, initial scoping and gathering should be documented clearly so as to back up the integrity of your procedure.
• Understand what the state expects to receive and expect resistance if those expectations are not met.

Uniform Unclaimed Property Act Revised by the Uniform Law Commission

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The Uniform Law Commission is a non-profit, unincorporated association that researches, drafts, and promotes enactment of US legislation in areas of state law where uniformity is desirable and practical. In 2013, the ULC appointed a committee, called the Revisions to the Uniform Unclaimed Property Act committee or “RUUPA” committee, which over the past few years has gathered written and oral testimony, and held public meetings in regard to amending the existing Uniform Unclaimed Property Act which has been in place since 1995.

In July 2016, the ULC voted favorably on revisions put forth to the Uniform Unclaimed Property Act. When the majority of state legislatures open sessions in late winter or early spring, 2017, the RUUPA may be introduced for consideration either in whole or in part.

Here are the highlights of the approved revisions:

Statute of Limitations and Repose
The RUUPA includes a statute of limitations stating that the Unclaimed Property Administrator can’t bring an action to enforce the Act relating to reporting, payment or delivery of property five (5) years after the business filed a non-fraudulent report. Further, the administrator cannot bring an action or examine a holder related to a duty under the RUUPA more than 10 years after the duty arose.

Record Retention Period
A record retention period of 10 years after the unclaimed property report was filed or should have been filed is included in the RUUPA.

Audit Transparency
To make unclaimed property audits more transparent, the RUUPA requires that the administrator follow the state’s procurement law in hiring contract auditors, provide the business to be examined with a confidentiality agreement, and provides for an informal conference with the administrator and an administrative appeal provision. Plus, the administrator is required to provide a report annually to the legislature/governor regarding the revenues received from audit (by contract auditor) and the claims paid and denied.

Electronic Due Diligence
Notices to owners of property about to be escheated will still have to be sent via US mail but also must be sent to the owner by electronic mail if the owner has previously consented to receiving notifications in this manner. Under the RUUPA, such notices must be sent within 60 to 180 days prior to the reporting deadline.

State Sale of Remitted Securities and Claimant Payment
Under the RUUPA, a state administrator is restricted from selling securities within three (3) years after receipt by the state and the state has given notice to the owner. If the administrator sells the securities within six (6) years after they have been delivered to the state and a valid claim is made within the time, the claimant is entitled to receive replacement shares and accrued dividends and other property that may be the result of stock splits or corporate actions.

Pay Cards Dormancy Period
Different from wages, salary or payroll paid via check which are assigned a one (1) year dormancy period, outstanding balances on pay card accounts are assigned a three (3) year dormancy period.

Securities Dormancy Period Trigger
The trigger for initiating a three (3) year dormancy period for securities is a second consecutive returned communication that was sent via first class US mail to the owner. If the owner doesn’t receive communication from the holder via US mail, the holder is required to confirm the owner’s interest by sending an electronic mail communication within 2 years after the owner’s last indication of interest in the property. If no response is received to the electronic mail or the holder is notified that the electronic mail was not received, the holder must attempt to contact the owner via US mail and the three (3) dormancy period would be triggered and begin to run after that US mail is returned as undeliverable.

Gift Card and Business to Business Exemptions
While almost two thirds of the states have unclaimed property laws that exempt gift cards from the law under certain conditions, the RUUPA makes such an exemption optional for state legislatures that choose to adopt the RUUPA. Further, while about one third of the state unclaimed property laws exempt specific types of credits that occur between businesses, the RUUPA does not include such a provision nor does it make mention of making it optional.

 

AssetMine Offers Free Unclaimed Property Searching

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AssetMine is now offering free unclaimed property searching for everyone.

AssetMine Global Unclaimed Property Experts are industry leaders in the location and recovery of dormant financial assets worldwide. The AssetMine proprietary database, which is constantly being updated and refreshed, contains over 150 million financial assets worth an estimated $55 billion belonging to individuals, corporations, and governments around the world.

Click here to find out if you or a family member are entitled to any unclaimed financial assets around the world. AssetMine will run a global search for up to 3 names free of charge and will notify you of any assets potentially linked to you or a family member.

Click here to learn more about the services AssetMine has to offer.