KeepUP™ Blog

Brian McGill

Recent Posts

9/19/19 8:27 AM

Electronic Payments and Unclaimed Property

In today’s business world, companies are using more and more electronic payments to pay what they owe instead of using paper checks.  The widespread use of direct deposits, wires and ACH’s came about because they are quicker, easier, and have a much lower chance of becoming an unresolved liability (than an uncashed check), because the amounts are being deposited directly into accounts provided by the payees.

Using electronic payments lessens the possibility for the creation of unclaimed property as these payments types rarely fail.  However, when they do fail, it is important that the payor identify and research the reason for the failure and correct any errors to ensure the obligation is paid and does not go unresolved.

As electronic payments rarely fail, they are not high on the list of potential unclaimed property types that companies might focus on.  Unfortunately, unclaimed property auditors are beginning to highlight these payment types focusing on rejections and bounce backs to see how the related obligations are satisfied.


Topics: Compliance, Audit, Best Practices

2/28/19 8:07 AM

Unclaimed Property Risk Associated with Third-Party Administrators

Companies are generally familiar with the unclaimed property that they generate and the process for reporting and remitting that property to the various states.  Having good policies and procedures that help you identify, evaluate, mitigate and ultimately report unclaimed property housed on your books and records allow for companies to comply with state statutes.

But what happens when any unresolved liabilities are not recorded on your books and records?

This situation occurs when a company uses the services of a third-party administrator (TPA).  Companies use TPA’s for a variety of property types, including stocks and bonds, payroll, rebates, gift cards and benefit programs.

In these cases, the TPA’s maintain the records and the company may have limited to no visibility about any unresolved liabilities.  Why is this a problem?  Unless the contract between a company and a TPA includes specific language transferring the escheat responsibility to the TPA, states will consider the company the holder of any related unclaimed property and expect the company to report that unclaimed property.  Obviously, this is a problem if the TPA has all the relevant books and records. 

What should a company that employs TPA’s do to ensure it remains compliant with the unclaimed property statutes?


Topics: Compliance, Recordkeeping, Best Practices

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: Compliance, Due Diligence, Reporting, Best Practices

1/24/18 9:16 AM

3 Ways to Reduce Risk of Unclaimed Property Penalty/Interest Assessment from California

Blue dollar symbols isolated over a white background-1.jpegEvery year, California mails out penalty and interest assessments to holders across the nation.  These assessments relate to violations of California’s unclaimed property laws that were evident on the assessed companies’ unclaimed property filings. 

California is one of the most stringent states in the country when it comes to enforcing the penalties and interest sections of its unclaimed property laws.   Once received, it is very difficult for holders to get California to waive or recalculate an assessment.  In addition, California does not offer a voluntary compliance program that allows companies the ability to avoid penalties and interest through a VDA. 

Here are three reasons a company would receive a penalty and interest assessment and ways to avoid those issues in the future.

  1. Reporting Property Late on the Notice Report. This is the most common cause of an interest assessment from California. California assesses 12% interest for every year the property is late. 
  • California assesses interest for late reported properties based on the properties reported on the Notice Report (filed in the fall) not the Final Report (filed in the summer). Therefore, if a reported item is resolved between the Notice Report and Final Report (i.e. by response to California’s due diligence outreach), interest will still be assessed on that item because it was reported on the Notice Report.  

Topics: Risk, California, Reporting, Best Practices

11/9/17 10:17 AM

Could Outsourcing Unclaimed Property Compliance Be Right For Your Company?

When one unclaimed property reporting deadline comes to an end, holders give a sigh of relief and enjoy a brief respite before the next deadline is quickly upon them. Often times holders’ must turn their attention away from their normal everyday work to focus on preparing and finalizing the compliance requirements for the next filing cycle.

Holders that manage unclaimed property reporting in house face many challenges including: allocating resources, being up to date with legislative changes, complying with each jurisdictions requirements to fulfill due diligence and reporting guidelines, as well as, reviewing all types of property to ensure they have not over or under reported. Due to these, and other challenges, holders often contemplate if outsourcing is a better path to follow.  

As with any outsourcing discussion, there will be pros and cons to each option. Here are a few key areas that should be considered when you are looking at options and can help you create the pros and cons for your company.


Topics: Compliance, Reporting, Best Practices