| FOR IMMEDIATE RELEASE January 25, 1999 |
Contact: Bill
Teets at (614) 644-7187 |
Ohio Joins National Effort to Collect, Return Unclaimed Funds
Voluntary Compliance Program Encourages Companies to Report Funds
(Columbus)--
Ohio has joined 38 other states in an effort to collect billions of dollars in unclaimed funds and reunite owners with money that rightfully belongs to them. Through the National Association of Unclaimed Property Administrators, these states are participating in a voluntary compliance program for companies not correctly reporting unclaimed funds."The first step in returning unclaimed money to the rightful owners is to ensure proper reporting by holder companies," said Gary C. Suhadolnik, Director of Ohio Department of Commerce. "We hope that this program will encourage holders to establish the practice of proper reporting and develop an ongoing relationship with unclaimed property administrators."
Unclaimed property consists of cash or intangible property such as bank accounts, stocks and bonds, and uncollected utility deposits and insurance policy proceeds, where there has been no documented transactions or contact with the owners for a set period of time, usually five years.
To encourage holders of abandoned property to report and turn these funds over to state unclaimed property programs, NAUPA has adopted a 10-month voluntary compliance program. The states that are participating have agreed to waive penalties and interest on holders who come forward voluntarily to remit unclaimed property. The national program ends October 31, 1999, but Ohio has extended that until December 31, 1999.
NAUPA estimates that states are currently holding more than $10 billion in unclaimed property. Banks, businesses, government agencies and other entities across the nation are believed to still be holding at least this much. Approximately 26 million Americans are the rightful owners of this unclaimed property.
"While many holders have taken advantage of voluntary compliance programs sponsored by individual states, some may fear retribution from other states if they 'come clean' in only one state," said Jessie Baker, president of NAUPA, and Chief of Unclaimed Funds in Ohio. "This nationwide effort is an attempt to alleviate the reluctance of holders to report their funds."
Under Ohio law, holders of unclaimed property can be assessed a penalty of up to $200 per day, plus interest, in addition to a civil penalty of up to 1% of the amount not reported. Most other states have similar penalty provisions. The program is not available to delinquent holders already identified and contacted by Ohio's audit staff or a third party audit firm.
In Ohio, Commerce's division of Unclaimed Funds holds $180 million in 1.8 million accounts. Last year, the division returned $21 million to 23,000 current or past residents of Ohio. Individuals wishing to check for unclaimed funds can write to: The Division of Unclaimed Funds, 77 South High St., 20th Floor, Columbus, OH 43215. Or, they may check on-line at www.com.state.oh.us. Holders can learn more about the national voluntary compliance program by contacting the division or the NAUPA website at www.unclaimed.org.
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Voluntary Compliance Q & A
Voluntary compliance is a program that allows banks, businesses, government agencies and other entities to turn over unclaimed assets to all participating states without the fear of penalties or interest. This program is an initiative designed to increase the awareness of Unclaimed Property Laws using a friendly, helpful approach to make it easier for businesses to comply with the law. It is designed to educate and inform holders of their reporting requirements. The Voluntary Compliance Program is an attempt to alleviate the reluctance of holders to report their abandoned funds.
Any business organization. This includes, but is not limited to financial institutions, utility companies, wholesalers, retailers, manufacturers, restaurants, insurance companies, public or private corporations, and all entities that maintain account balances or write checks.
If the owner is due $25 or more, an attempt to locate the owner, known as due diligence, must be performed before remitting the property. The holders must send a first class letter to the owners’ last known address detailing the amount due the owner and requesting a positive confirmation from the owner within thirty days or the money will be turned over to the state.
No. There is nothing too small that does not require reporting. However, amounts due an owner that total less than $10, may be reported in aggregate. That is, the amounts due owners that are less than $10 may be summed and reported as one aggregate for that property type. Since the goal is to return the property to the rightful owner, if detail is available, it is encouraged that you report it. Owner detail should be retained by the holder for at least 5 years after dormancy period.
The goal here is to educate holders and offer assistance at the request of the holder. Holders that do not come into compliance during this program may be subject to audit in addition to interest and penalties associated with failing to file a report of unclaimed property.
When owner level detail is not available for the unclaimed property, report the amounts, and as much other information as is available, even if it must be reported as owner unknown.
For most property, the dormancy period is 5 years. Some of the exceptions are one year for paychecks, seven years for money orders, and 15 years for travelers checks.
The deadline for reporting for most companies is November 1st. Life insurance companies report on May 1st. Companies are allowed to report early, upon approval from the Division of Unclaimed Funds. In no case can a holder report an unclaimed item earlier than the thirtieth day after the due diligence notice is mailed.
There are 38 states involved in the nationwide program. However, those states not listed may be restricted by their legislature or participate in an individual compliance program. The participating states are:
Alabama Alaska Arizona Arkansas
Connecticut Delaware District of Columbia Hawaii
Idaho Illinois Indiana Iowa
Kansas Kentucky Louisiana Maine
Maryland Michigan Missouri Nebraska
New Hampshire New York North Carolina North Dakota
Ohio Oregon Pennsylvania Rhode Island
South Carolina South Dakota Tennessee Utah
Vermont Virginia Washington West Virginia
Wisconsin Wyoming
If you have additional questions, you may contact Scott Harper at: ucp@mail.sto.state.mo.us.
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