KeepUP™ Blog

1/11/19 11:18 AM

Delaware Clarification Regarding Unclaimed Property Annual Filing requirements

MarketSphere has been made aware that holders may be receiving notices from the State of Delaware.  The following is a recent posting to the Unclaimed Property Professionals Organization (UPPO) website concerning these notices detailing interaction with the Delaware State Escheator. 

UPPO recently received reports that Delaware unclaimed property staff has notified some holders that they are required to submit a copy of their policies and procedures as part of their annual filing. In response, UPPO reached out to Delaware State Escheator Brenda Mayrack, requesting clarification. Following is her response:


Topics: Reporting, Delaware

1/8/19 8:29 AM

A New Delaware Unclaimed Property Lawsuit

In December 2018, Univar, Inc. filed an action in U.S. District Court asking the Court to stop an existing unclaimed property audit being conducted by Kelmar Associates, LLC.  In their complaint, Univar seeks a declaratory judgement that the audit violates several matters, including Delaware’s Escheat law, federal common law and certain clauses of the U.S. Constitution.

 In December 2015, Delaware issued an audit notice to Univar, indicating that the audit would be conducted by Kelmar as the state’s agent. Univar disputed the legitimacy of the audit including calling into question Kelmar’s audit protocols. On October 30, 2018, Delaware issued a subpoena to Univar requiring Univar respond to Kelmar’s document requests, which Univar had not responded to. In response to the subpoena, Univar filed this complaint to stop the audit. Among other matters, the complaint alleges:


Topics: Audit, Delaware

12/11/18 8:35 AM

Fall Unclaimed Property Filings Are Done! No Time To Rest.

Holders breathe a sigh of relief when December rolls around.  Fall unclaimed property filings are mostly complete with only a couple of December deadlines remaining.  Time to sit back and relax through the holidays, right?  Not if you want to make your spring and summer unclaimed property reporting seasons run smoothly.

The first spring unclaimed reporting deadlines start in March and roll on from there in a steady stream until the summer reports due at the beginning of July. Mixed in between now and those spring and summer deadlines are holidays, year-end close, financial reporting requirements, quarter closes, and all your other day to day tasks and deadlines not related to unclaimed property. Below are a few things that you and your unclaimed property team can start doing now to keep ahead of the game.

  • Reissue checks for the due diligence responses you received during the fall mailings. Besides just being a good business practice, reissuing these items sooner rather than later will help keep down the complaints from property owners regarding delays in receiving their money. These properties have been dormant for years. Now that the owners know about them, they want their money as soon as possible.

Topics: Best Practices, Reporting, Due Diligence, Compliance

11/28/18 7:32 AM

Corporate Asset Recovery: Third-Party Checklist

Amounts owed to you (unclaimed property) can go unclaimed for a myriad of reasons.  Your company could have moved locations.  They could have changed their process or contact point for payment receipt.  A check could literally be lost in the mail.  Once those items are lost and go unreconciled they turn in to unclaimed property. Unclaimed property can be funds held by a state/jurisdiction resulting from statutory escheat requirements or they can be outstanding balances held by a government entity (that will never be escheated) until you or your organization come forward. 

Whether your unclaimed property is held by a state unclaimed property department or government entity, it is important to know there are two ways to get your property; search and claim it yourself or utilize a Third-Party Recovery Firm.

A Third-Party Recovery Firm is a company who assists owners in the identification and recovery of unclaimed property.  For the most part, Third-Party Recovery Firms will contact your organization about funds they have located.  If you or your organization has decided to utilize a third-party to recover unclaimed property it is important to consider the following checklist:


Topics: Corporate Asset Recovery, Best Practices

11/8/18 10:09 AM

Delaware Unclaimed Property Notice Letter

Delaware has been busy filling the mailboxes of companies recently with Voluntary Disclosure Agreement (VDA) program invitations.  If you are a recipient of any letter from Delaware, pay particular attention to the letter content. 

Pursuant to 12 Del. C. § 1172(a), the State of Delaware cannot initiate a new abandoned or unclaimed property examination unless the company has first been notified in writing by the Secretary of State that it may enter the Delaware VDA program.  The VDA program allows a company to come into compliance by utilizing the Delaware VDA guidelines to conduct a self-audit of their books and records. 

This is an excerpt which will help in identifying the Delaware VDA program invitation:


Topics: Voluntary Disclosure Agreements, Reporting, Delaware

10/16/18 9:45 AM

Unclaimed Property - Q3 2018 Blog Round-Up

As we’re entering the home stretch of the fall filling season, it is important for companies to ensure that they are reporting accurately and comprehensively.  We have been seeing an ever-increasing volume of audits and state enforcement, added sophistication in state report review processes, as well as, assessments of penalties and interest.  Many companies who have been reporting unclaimed property for years are now being targeted for unclaimed property audits as gaps in their reporting processes are being identified. 

It is now more important than ever that companies ensure that they review their unclaimed property policies and procedures to bring them up to speed with the changing regulations and landscape.  All it takes is one missed property type to have the auditors on your door step.  Our mission with our regular blog posts is to help you identify areas of potential non-compliance and industry changes that may impact your company to assist your organization with maintaining compliance.

Our entire team is not only committed to serving our clients and the unclaimed property holder community, they are the creators of our KeepUP™ blogs. This diverse group of individuals lends their expertise to create educational and informative articles for the holder community. In case you missed them, here is a roundup of Q3 posts.


Topics: Best Practices, Reporting, Compliance

9/27/18 9:08 AM

RUUPA Impacts on Foreign Transactions

With most unclaimed property transactions being wholly domestic, it’s relatively straight-forward to determine the reporting obligations for most properties.  However, managing foreign transactions continues to be an, at times, confusing topic for U.S. holders of unclaimed property.  We have previously addressed the considerations for handling foreign transactions, but how do more recent changes, such as the introduction of RUUPA, impact the reporting obligations for foreign transactions?

Revisiting the Types of Foreign Transactions:

  • Domestic to Foreign: The holder is located in the United States and the payee is located in a foreign country. 
  • Foreign to Domestic: The holder is located in a foreign country and the payee is located in the United States.
  • Foreign to Foreign: Both the holder and payee are located outside of the U.S.

Wholly foreign transactions tend not to be impacted by domestic escheat laws, so U.S. holders will be most focused on domestic to foreign transactions – those where the owner's last known address is in a foreign country, and to a lesser extent, foreign to domestic transactions. 


Topics: Best Practices, Reporting, Compliance

9/25/18 8:32 AM

Retailer Found Guilty In Gift Card Case

On September 21, 2018, a Delaware jury found guilty of failing to report and remit nearly $3M in unredeemed gift card balances that should have been reported to the State of Delaware as unclaimed property.
The verdict is the latest in a series of on-going cases that has already resulted in the payment to Delaware of over $25 million in unpaid gift cards and penalties from other retail card issuers who settled before trial.

Under Delaware law, gift card issuers are required to turn over unredeemed gift card balances to the state after a period of 5 years.  However, this and other lawsuits has exposed a common practice in the gift card industry, where significant numbers of cards go unredeemed and issuers keep these balances.

In the Overstock case (The State of Delaware ex. rel. William Sean French v., Inc. [Superior Court of Delaware C.A. No. N13C-06-289 PRW CCLD]), the defendant declared that it had transferred unredeemed gift card balances to an Ohio-based business, CardFact Ltd (now known as Card Compliant).  As Ohio does not require the escheatment of unused gift card balances, this transfer allowed CardFact and Overstock to keep these balances.


Topics: U.P. Law, gift cards, Delaware

9/20/18 8:54 AM

Deeper Dive Into Unclaimed Property With Escrow Refunds

It has been a few years since we blogged about escrows which usually requires a refreshed look at the industry. However, not much has changed in terms of unclaimed property laws surrounding those outside of RUUPA (the Revised Uniform Unclaimed Property Act, which was finalized in late 2016) that changed the dormancy on some escrow account types.  Let’s take a deeper dive into the causes of escrow balances becoming unclaimed and some things that can be done upstream in the life cycle of the account aging and becoming dormant.

RESPA (Real Estate Settlement Procedures Act) was established in 1974.  There have been some revisions with Dodd Frank in 2013 but it basically has kept the verbiage that is causing so many cases of unclaimed escrow refund checks.  The act states that within 30 days of an escrow overage analysis, the mortgage company must send a refund check if the overage is $50 or greater.  Under $50, companies are allowed to maintain the balance in escrow.  So rather than applying any overage to the mortgage or holding it in escrow while reducing the monthly payment, checks are mailed out to unsuspecting owners. 

The good news is that as these payments exceed $50, most would require the mailing of a statutorily mandated due diligence/last contact letter. Unfortunately, owners receive these letters between two and five years after the check was issued and most owners ignore the letter. This results in a substantial sum of money being sent to the states as unclaimed property.

Below are a few tips for holders that manage escrow accounts to reduce the amount of unclaimed escrow refunds:


Topics: Escrow Balances, Best Practices, Compliance

9/6/18 9:28 AM

Illinois Unclaimed Property - The Saga Continues

In what seems like the never-ending story concerning Illinois and its unclaimed property statute, the latest twist occurred last week when Governor Bruce Rauner vetoed a bill (Senate Bill 2921) that barely touched on unclaimed property.  In his veto letter, Rauner indicated that he would pass SB 2921 if the legislature would add certain language to it amending 2017’s Senate Bill 9; specifically, Section 15, The Revised Uniform Unclaimed Property Act.

If you have followed Illinois’ unclaimed property legislation over the last year, you will know that the state has made significant changes to its unclaimed property laws by adopting a version of the 2016 Revised Uniform Unclaimed Property Act (‘RUUPA’), see our related blog Illinois’ New Unclaimed Property Act – Impact on Business to Business Transactions.

The two key parties involved in the disagreement, Illinois State Treasurer, Michael Frerichs, and Governor Rauner have been at odds since SB9 was introduced and eventually passed. (Governor Rauner made an attempt to veto SB9 prior to it becoming law, but his veto was ultimately overruled by a three-fifths majority vote in the Illinois Senate). In what appears to be a continued effort to reform the adopted RUUPA, Governor Rauner states in his SB 2921 veto letter, that the RUUPA is ‘deeply flawed’. Rauner goes on to say;


Topics: U.P. Law, Reporting, Compliance