WATCH OUT FOR UNCLAIMED PROPERTY SCAMS

Watch Out for Unclaimed Property Scams, State Officials Warn

The email or letter looks official, and it contains an attention-grabbing message: The state is holding on to your unclaimed property, which may be worth hundreds of thousands of dollars. All you have to do is pay a fee upfront or provide your personal information and the money is yours.

But the letters and emails are the work of scammers, not state officials. A growing number of people across the country are receiving these messages and some are falling for them, losing thousands of dollars or becoming victims of identity theft in the process.

“These scams are just rampant,” said David Milby, director of the National Association of Unclaimed Property Administrators (NAUPA), which represents state unclaimed property programs. “The email from the public we’ve been getting about this has increased tenfold in the past year.”

Some scammers pretend they work for NAUPA and have even used its letterhead to make their pitch.

Besides costing victims money, consumer advocates say this kind of fraud diminishes public trust in state agencies that handle unclaimed property and makes it harder for them to do their jobs.
Unclaimed property is cash or other financial assets considered lost or abandoned when an owner can’t be found after a certain period of time. It includes dormant savings accounts and CDs, life insurance payments, death benefits, uncashed utility dividends and the contents of abandoned safe deposit boxes.

There is plenty of it. In 2015, unclaimed property agencies in the U.S. collected $7.8 billion and returned $3.2 billion to rightful owners, according to NAUPA. At last count in 2013, states were holding on to $43 billion in unclaimed property.

The treasurer, comptroller or auditor of each state maintains a list of abandoned property and runs an online database that anyone can search by name for free. Forty states and the District of Columbia also provide that information to a NAUPA-endorsed national website that the public can search.

But fraudsters don’t bother reviewing or collecting that data. They simply contact people at random, using email, letters or phone calls, hoping to snare a victim.
The scams play on the idea that people are simply getting back assets they’re owed.

Lost Money

Banks, insurance companies and other businesses are required by law to turn over assets from abandoned accounts to state unclaimed property agencies. Often, they haven’t heard from the owners or been able to get in touch with them over a period of time. Some people may have forgotten about the account, moved, changed their name or died.

The state agencies hold the funds indefinitely. The only exception is the contents of abandoned safe deposit boxes, which are often too unwieldy for states to store. Many officials use live or internet auctions to sell off the property. (Purple Hearts and other war medals are excluded.) States then add the auction proceeds to the pot of unclaimed assets, but owners who come forward at a later date can collect what they’re owed.

NAUPA’s Milby said states try hard to connect people with their lost assets. Some send staffers to special events or set up kiosks in malls; some use social media, radio and TV; some take out special section ads in newspapers listing every person who has unclaimed property.

Despite those efforts, many owners never reclaim their property. In Idaho, for example, the state returned $6 million to people in fiscal 2016 but is still holding more than $159 million.
People who want to collect abandoned property can file a claim for free. Fraudsters reach out to people randomly and try to get money or personal information from victims upfront and quickly, often warning that the transaction must be kept confidential.

Milby said no one keeps data on the number of complaints states get about unclaimed property scams. But he said he received hundreds of emails last year from people reporting they had been contacted by a fraudster. “You get to the point where people don’t know what’s real and what’s not real,” he said.

The phony letter, which is posted on NAUPA’s website, says it is from an “unclaimed property adjustor” who works for the association. It uses information about unclaimed property that is cut and pasted from the organization’s website and refers to federal statutes and IRS rules. The letter explains that the recipient is the second-place winner of a sweepstakes award worth hundreds of thousands of dollars that is now unclaimed property.

To check if you have unclaimed property the service is always free and requires no contract. Visit yourmoney.idaho.gov and search your name.

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