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4/14/22 9:50 AM

Reduce Escheat Liability with Owner Reunification Programs.

by Bill Berger, Tracy Olsen and Heather Gabell


email people and mail-2If your organization places a value on customer retention and would like to reduce your overall escheatment and due diligence expenses, now is the time to commence an outreach program to dormant account owners. There is still time to make contact with customers prior to the fall escheatment cycle, and if you move quickly, you can also reduce your due diligence mailings expenses. 
 

Due diligence for the fall reporting cycle generally mails anytime from July – August. The due diligence mailing process cleans up a handful of accounts every escheat season – usually somewhere between 10 -20%. However, as the below chart demonstrates, a proactive outreach program that begins far in advance of the due diligence time frames can significantly reduce the population of accounts that are ultimately escheated.

REunifcation Graph

At MarketSphere we call this Owner Reunification.

There are many benefits to Owner Reunification. The earlier you start, the more you can save from escheat. Improving your due diligence process is one of the benefits associated with early owner outreach. There are resources and costs associated to meet the state mandated due diligence obligations that can be a drain on your organization. You can avoid, greatly reduce, or even eliminate the population of accounts that require due diligence by successfully contacting inactive (or at risk) customers early on.

Remember, the due diligence process is a last attempt to contact customers to make them aware that their property will be escheated absent their response to the diligence notice. Each state has specific provisions surrounding the process, including timing, delivery method (first-class mailing, certified mailing, etc.), and even content and font requirements. Due diligence letters are also required to be sent after the account has become dormant. As a result, customers often receive these mailings after a number of years, meaning they may not even reach the entitled owner (or heir), and could even be thrown out.

 Early outreach, on the other hand, can be performed much earlier, such as 60-90 days after an account becomes inactive. Programs are customizable and can be as varied as your resources allow. An outreach campaign that includes phone calls, emails, and courtesy mailings, absent the requisite state-specific verbiage, that is tailored to your customer base, results in more responses, and a reduced reportable population that will be escheated.

Consider a regular review of your accounts, across all lines of business, and reach out to inactive customers on a regular basis. Confirm address information and obtain additional points of contact, such as an email address. As a best practice, establish and document policies and procedures around your owner outreach process and how you track customer activity, in addition to your due diligence policies and procedures.

 Another benefit to a proactive outreach program for many companies is customer retention. If you have unclaimed property owners who are also your customers, the return on investment from a proactive owner outreach program is likely higher than the return based on new customer acquisition efforts. Research has found that new customer acquisition is costlier than an effective retention program. And that even a 5% retention rate can dramatically benefit your company. In other words, many companies are spending money to bring in new customers and account owners, so it would serve them well to do what they can, not to lose them out the back door, to escheat!

The specialists at MarketSphere have extensive knowledge of creating programs that fit the needs of your industry and organization. We encourage you to contact us to discuss how we can customize a plan for you.

*Content contained in this article is considered accurate as of the publish date.

 

Topics: Due Diligence, Best Practices, Owner Reunification