The second installment of this two-part commentary explores the states' commitment to unite owners with unclaimed property, and the media's role in determining the public's expectation of the states' responsibility. In this commentary, Lynden Lyman, author of "Unclaimed Property Law and Reporting Forms," explores four factors concerning states' ability to return lost assets: the quality of owner information received by the states, the "true" national rates of return for unclaimed assets; state success stories in owner unification, and whether states can- and should- be doing more to unite owners with lost assets.
Excerpt:
The frequent theme of media reports is that states should be returning more property (e.g., a higher percentage of collections) than is currently the case. To determine whether this is a reasoned position, there are four points to consider. The quality of owner information received by the states; the “true” national rates of return for unclaimed assets; state success stories in owner unification; and a consideration of whether states can — and should — be doing more.
1. Owner Locating is Directly Related to the Quality of Data Received by the States. Successful owner location is largely a function of data quality. When the state receives complete and accurate owner information, the ability to find a missing individual, and confirm ownership, is greatly enhanced.
Realistically, however, it is impossible for the states to even attempt to locate owners of at least one-quarter of the property reported. In virtually all states, at least 25 percent of the property is received without an owner name or address. Some of this property is below the state’s aggregation amount, which represents a threshold amount (on average, $50) under which owner information is not required. Other “no address” property includes assets where no owner name or address is ever recorded (the most common examples include money orders and travelers checks), accounts for which the holder has simply failed to maintain a name and address, settlement differences, or other “breakage” from financial transactions. This latter category can produce tens of millions of dollars in unclaimed funds, most of which typically end up with the states in which major corporations and financial services companies are incorporated. This “no address” phenomenon explains in part why Delaware, where so many holders are incorporated, has a much lower return rate than other states.