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10/15/15 12:43 PM

The Question of Unclaimed Property Owner Contact

by Greg VerMulm

unclaimed-property-owner-contactProperty becomes statutorily defined as abandoned or unclaimed when a certain period of time has gone by without any contact taking place between the holder and the property owner. Property can't become abandoned if an owner is aware of it and has demonstrated interest in it. For this reason, owner contact may be one of the most important questions being discussed for the upcoming Revised Uniform Unclaimed Property Act (RUUPA).

Two elements of owner contact are the triggers that determine whether property becomes unclaimed: 1) method of contact and 2) date of last contact (DLC). These two elements are forever intertwined, because only a valid method of contact can prove when a last contact took place.

Valid methods of unclaimed property owner contact

One of the disagreements connected to the owner contact updates in the new act has to do with whether certain types of activity related to an unclaimed property item prove the owner's knowledge of the account.

Back when the only ways we had to contact each other were by U.S. mail, phone or fax, it was easier to prove an owner's knowledge of the property.

New technology, however, has blurred the lines of communication. For example, if automatic payments are being made online or by ACH, does the property owner truly know about the account and payments, or is he or she just not noticing the money is being paid? Is it possible the person has died? Is an email sent from the owners' regular email address really from the owner?

You can see how proof of contact is becoming a bit blurred. It's understandable that states want to be sure they are protecting owners' property by proving contact. It is also understandable that holders want to avoid escheating property that owners know about.

Determining date of last contact with owners

For abandoned and unclaimed property purposes, the states use the DLC as the date the statutory dormancy period begins. The DLC is considered to be the last time an owner showed interest in the property.

The states and holders tend to have different perspectives on this date. Sometimes it's straightforward. Other times, opinions differ about which dates should be used.

In general, states tend to focus on individual transactions and items. They believe each transaction or item is unique and must be treated individually from the point of view of contact 

Holders, in contrast, tend to focus on all interactions with a specific owner. So, if an owner shows activity or contact related to other properties with the same holder, holders believe it proves contact, and they would like to use the latest date of any transaction with that same customer as the DLC.

Tightening the definitions of contact and DLC 

Because technology has blurred owner contact proof, the industry sees a need to redefine methods of contact and DLCs used to begin dormancy. The last two Uniform Unclaimed Property Acts in 1981 and 1995 couldn't make allowances for new technology, because it didn't exist.

The proposed RUUPA, which is expected to be approved next year, takes all of this into consideration. As you will see in the ULC's exact draft language of this section:

  • Electronic communications are now accepted as valid communication concerning the property or account
  • Distributions made by electronic or similar means are accepted and considered as evidence that the distribution has been received
  • Accessing an account is included in the owner-directed activity indicating knowledge of the account
  • A clause is included that could encompass any future technology: "Any indication of an owner's interest in property includes any other action by the owner that demonstrates to the holder that the owner is aware that the property exists."
  • Any action by an agent or other representative of an owner are presumed to have been done on behalf of the owner and is considered an action by the owner

One of the comments in the draft sums up the changes: "The revision expands the ways in which such continuing interest may be indicated, and makes clear that the owner may act through an agent or representative."

Topics: Compliance, ULC