Q. What is Unclaimed Property?

A. Unclaimed Property includes any type of property that has not been claimed by the rightful owner. Most common examples include gift certificates, merchandise credit, vendor checks, aged accounts receivable, credit balance, and payroll checks.

Q. Do all businesses have to file unclaimed property reports?

A. The 1995 Uniform Unclaimed Property Act states, "A business association" means a corporation, joint stock company, investment company, partnership, unincorporated association, joint venture, LLC, business trust, trust company (land bank), safe deposit company, financial organization, insurance company, mutual fund, utility, or not-for-profit are required to follow unclaimed property laws.

Q. Are there penalties if unclaimed property reports are not filed?

A. Both the 1981 and 1995 Uniform Unclaimed Property Act addresses penalty and interest charges that States can charge holders of unclaimed property who fail to report in a timely manner. According to the 1995 Uniform Act, "A holder who fails to report, pay or deliver property within the time prescribed by this (ACT) shall pay to the administrator interest at the rate of 12% (two percentage points above the annual rate of discount in effect on the date the property should have been paid or delivered for the most recent issue of 52-week United States Treasury Bills) on the property or value thereof from the date the property should have been reported, paid or delivered."

Q. Why is it so important to prevent accounts from escheating?

A. There are several important reasons to prevent an account from becoming dormant and eligible for escheat. If you are unable to contact the account owners, then you continue to incur the expense of mailing statements, dividend/refund checks and other communications. Additionally, you bear the incremental costs of handling, sorting and investigating the returned mail. In the event the dormancy period exceeds state guidelines, you are also faced with the expense of escheating the assets, which has a high cost of compliance and may involve significant penalties under audit. Each phase of this process can often cost several dollars per account to manage. However, the most important expense is customer goodwill: proactively finding your lost account owners enables you to revitalize and further expand your valuable long-term relationships with your customers.