Unclaimed Property:  Service or Scam?

Ideas and Issues

Milwaukee       “Unclaimed property” is an interesting concept.  What is it really?  Years ago, I would have thought it was some share of property in a farm somewhere in the country and people were looking for a long-lost relative who was named in the will, and the state was trying to lend a hand.  Or, maybe, it was a phone or utility deposit that had gone uncollected when a family was forced to move quickly for whatever reason, and the state was doing the good turn of saving it for someone until they realized they needed to collect it.

Could be it’s both of those things, but it is also clearly a good deal more.  Every state has someone somewhere in its administrative bureaucracy that deals with unclaimed property, and as our financial system has become more complex and opaquer, a dollar here and a dollar there unclaimed by lots of people can add up quickly.  In Louisiana, this has also become a political issue which sheds so light on this dark money hole, but for me it has also become personal since I have had occasion to interact with this system.

John Schroder is the Treasurer of Louisiana and like most office holders in the state is a Republican. John Bel Edwards is the Governor of Louisiana and in a refreshing surprise a Democrat.  Schroder is responsible for unclaimed property and has been stirring up controversy because he wants to ramrod a proposal through the legislature that unclaimed property that remains unclaimed should be used for infrastructure repairs in the state.  Edwards on the other hand was counting on $25 million to fill a gap in the state budget.

If I understand this correctly, this has been the common practice.  The Times-Picayune/ New Orleans Advocate reported that this has been commonplace for years “with $15 million shaved off since 2008 to pay Interstate 49 projects and the remaining dollars poured into the general fund to pay for a variety of programs.” To bring a sharper point to the fight, Schroder is now refusing to release the money to Edwards, claiming the legislature and governor never should have had access to the money, and that Edwards will have to go to court to get the cash.  Without irony though, he believes that he has the right to make the decision and spend the cash.

Schroder argued as well that the “unclaimed property fund has a dwindling balance because technological advancements have helped find people who are owed cash.”  Wait a minute.  His job is to be a steward of other peoples’ money, so that should be a good thing, so that sounds wrong for a lot of reasons.  I’m also skeptical that it is even true, and this is where my personal experience comes in, and I bet it’s the more common situation.

Over recent years, it has fallen to me to settle the estates for my family.  The so-called “advance” is that you can go on a website and try to find out if you, or anyone you know, has unclaimed property.  Once someone dies, I guarantee there’s going to be something there.  Some odd dividend from a forgotten stock or a bank account that no one remembers or whatever.  It’s a clunky site, and often just not correct.  Even as I got letters from various companies claiming they would collect the money for a percentage, the website would be claiming nothing was there.  I knew better or at least I thought I did.

Before Schroder took office in December 2017, I had the names of several people who worked there.  I met them when happened to take a call from one of them when I inherited this job while visiting my mother before she died.  A woman had found a small annuity in my father’s name and wanted to make sure I knew they had it.  Wow!  That’s public service, and she was right, and she and her co-workers were very helpful.

When my brother passed away, I tried to call them.  No luck.  I went through the website and sent everything as they instructed including an original death certificate, which no one requires I’ve learned.  Months later, I got a letter from the Treasurer listing the unclaimed items that I had listed in my claim, and in yellow marker highlighting everything I needed to send them to collect, all of which was exactly what I had already sent.

I fumed and stewed for another year, and with the passing of my mother, adopted a new strategy.  I refused to allow them to put me in the position of me identifying what property they held, which of course is the opposite of Schroder’s claim.  This time I made what we refer to in labor negotiations as a global offer.  I assembled all of the court documents, all of the death certificates, and what they needed from me.  I could not send them a copy of my Social Security card, I sent them four documents attesting to my SSN with an explanation for why I didn’t have it when I lost it in a canoe spill twenty-five years ago.  I also sent a cover letter detailing my previous good experience, and my current disappointment.  I packaged it all up and sent it certified mail.  This time weeks later, I received an email from someone acknowledging receipt and the fact they had some unclaimed for my mother, father, and brother.  She told me none of the names I mentioned in my letter were employed by the office anymore, nor did she detail what they were holding.  She insisted that I had to have a brokerage account to receive the funds, so I got one, and sent it to her within twenty-four hours.  Nothing since then.

But, reading Schroder’s claims, sometimes they don’t have the money to pay.  He claimed earlier this year they had to wait 120 days to refund money.  What the heck is going on here?!?  He wants to spend money that isn’t his, claims that they are reaching out for people when they are not, gets rid of competent people, and then doesn’t return to people the money that is their property once it is claimed.

I’m now skeptical of unclaimed property everywhere.  Are there any rules or oversight or is this just a cash cow and a slush fund?  It isn’t the state’s money, it’s citizens.  How long are the funds being held before they are determined to be abandoned and now state property?

What should be a service, increasingly seems to be a scam.