KeepUP™ Blog

4/18/19 9:12 AM

Unclaimed Property Fraud Affects Holders and States

by Clive Cohen

preventing-unclaimed-property-fraudOn-line fraud is becoming more prevalent when it comes to unclaimed property claims. 

In a recent case of fraud, the State of Arkansas was found to have paid more than $40,000 to at least one person who used stolen identities to make fraudulent claims through the State’s online claims tool.

Auditor of State Andrea Lea indicated that the fraud used stolen identities to allow the fraudsters to pose as owners of unclaimed property held by the Auditor's office and claim the property for themselves.

A spokesman for the Auditor's office, said that whoever submitted the fraudulent claims had access to the type of documents, such as a passport or driver's license, that the office required as proof of identity for people filling out online claims, and that "this person was an expert criminal". Lea said that the investigation had expanded to include similar claims made through unclaimed property programs in six other states.

You only must read the newspapers or go on the web to realize that all kinds of on-line fraud are on the rise.  This recent example of unclaimed property fraud highlights that companies holding unclaimed property should ensure their owner verification protocols are stringent enough to ensure claims are paid to the correct person or entity. Simple tips include:

Internal fraud prevention: Ask professional advisors with fraud experience to assess your strengths and weaknesses. Create official monitored processes for handling unclaimed property, including logins and regular reviews. Anyone who otherwise might be tempted to divert funds will see the process is well-managed and risks of attempting fraud are high. 

External fraud prevention: Establish clear processes for verifying owner identity. Professional advisors can help determine information to capture. This should include complete contact information at time of purchase, employee/vendor on-boarding, or account opening. Request the same information from an apparent owner. A fraudster who can't provide the right information will give up.

Holders who are uncertain about their unclaimed property procedures, including those pertaining to claims, can engage an unclaimed property professional who has the expertise and knowledge to help holders understand the most effective practices available and recommend actions that need to be taken.   

Topics: Due Diligence, Best Practices, Fraud