For those who work on the front lines of unclaimed property, the whole abandoned and unclaimed property world can be annoyingly difficult for many reasons. As time goes by, the “industry” is working through some of these difficulties.
I’ve noticed a number of positive changes in our industry, and I thought it might be helpful to do a quick review.
As you read through the list of changes below, keep an eye out for opportunities to take advantage of, as well as pitfalls to avoid. You know your unclaimed property specialists at MarketSphere are always here to help.
The Evolution of Unclaimed Property:
- The industry is maturing, as evidenced by topics having increased in complexity at the recent annual meeting of the Unclaimed Property Professionals Organization (UPPO). Conversations are more about “how to” than “what the heck is happening?”
- Holder personnel have become more knowledgeable, which makes all processes run more smoothly. This means they are able to manage unclaimed property more efficiently, as well as take better advantage of beneficial outsourced services, such as exemption analysis and liability reduction. This is also leading holders to become more proactive, including participating in VDA programs instead of waiting for audit notification.
- Companies are falling in line with unclaimed property laws, and compliance is seen less as an option than in the past. Among many other benefits, this knowledge of and focus on the law will make it easier for staff to get approvals needed to manage unclaimed property effectively and efficiently, rather than having to fight to get their companies to take unclaimed property seriously.
- Unclaimed property duties are being split strategically between different levels of personnel (e.g., due diligence processers, managers, audit teams, etc.), rather than the entire function being assigned to one person. There seem to be more full-time unclaimed property managers being hired, which would support the idea that companies are taking this more seriously and are more willing to put processes in place to minimize potential issues.
- Audits are less threatening for companies and personnel who are more knowledgeable about abandoned and unclaimed property in general, as well as their specific rights. Some companies are pushing back when audits are unfair. This is likely to embolden additional holders, which could more evenly balance interactions between holders and auditors.
- Litigation and legislative changes are helping to naturally resolve conflicts and make compliance requirements clearer. This could be a painful process for some who are caught in the throes of a specific case. Ultimately, resolution of these cases will help holders better understand their rights and may help define a better state audit methodology.
- Complete uniformity seems unlikely, although the work of the ULC is important and there is a benefit to having some uniformity of law where possible. Some states will adopt the new final ULC act, or parts of it. But variance in state unclaimed property laws is likely to persist.
- We see increased interest in unclaimed property within specific industries, in part due to the fact that more holders have come into compliance generally and the states are now narrowing their focus to specific industries and types of property. Some industries must navigate special considerations for unclaimed property, such as the oil and gas industry, which has many suspended accounts. As we move forward, it’s likely there will be a growing emphasis on laws and services designed especially for these industries.
Keep up with Unclaimed Property and Remain Proactive
Abandoned and unclaimed property management is, in some ways, less of a rocky road than it was just a few years ago, but the complex and changeable nature of the industry remains.
We advise our holder clients to stay informed about the current unclaimed property environment, both internal and external, and talk with us frequently. This allows them to be proactive, understand their own situations, anticipate change and react accordingly.