Due Diligence & Reporting Services
Completing due diligence is a bit like jumping through hoops with a whip cracking. Every holder of unclaimed property is compelled by disparate state statutes to follow meticulous rules governing the search for owners of property. The process can be extremely complex and some states are more demanding than others.
The state of California, for example, not only requires holders to conduct due diligence, but also requires a pre-escheat list so the state can perform its own due diligence. The California unclaimed property office publishes properties with names, asking owners to contact holders directly, which invites criminals to pose as owners.
It’s a challenge to handle those calls in addition to calls from real owners who might believe the due diligence letters they received are advertisements. Such misunderstandings sometimes cause owners to become angry and difficult to serve. If a company has a large amount of unclaimed property, management of the calls alone can weigh on staff.
Some companies attempt to complete due diligence in-house, but it’s a big job. Not only does assigned staff have to keep up with state statutes, maintain meticulous records and manage a multitude of calls, the reporting cycle demands huge blocks of staff time, taking personnel away from more important tasks. Any deviation from state mandated due diligence or reporting rules can open an organization to risk of audit and penalties.