BiggerPockets

Unclaimed Property on Ebay...

Wednesday, May 18

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If you’re looking some great deals on interesting items, then you need to go to Ebay.  Ebay has become the auction place of choice for state’s looking to get rid of the billions of dollars of unclaimed assets that it has in its coffers.  Most items are those that have been taken out of safety deposit boxes that have been considered abandoned.

For a safety deposit box to be considered abandoned, usually it is one where the fees have not been paid up to date and the financial institution holding the box cannot get in touch with the owner listed on the account through an address or phone number that is associated with the account.  The time frame for this to take place is usually about 3 years.  The contents of the box are then turned over to the state’s unclaimed property division, which then catalogs the contents and puts them up for sale on Ebay. 

The money is always available to the owner of the box if they ever claim it.  The items vary widely in the boxes and can include diamond rings and necklaces, watches, jewelry, rare coins and bills, collectable sports cards and comic books, stamps, books, photographs and more.

Why Ebay for auctions?

Most states have found that by putting the items up for sale on Ebay bring them more bidders from around the world and a greater number of dollars.  The bottom line is that more revenue is generated through this auction method than any other.  There is no special rule as to when these sales will occur, but when they do, a vast array of unique items can be found.

Here is a sampling of the states that have gone the Ebay route:

California: Seller Name on Ebay: ucpauction

Colorado: Seller Name on Ebay:co.unclaimed.property

Indiana: Seller Name on Ebay: indiana_unclaimed

Kansas: Seller Name on Ebay: isolit.kansas0208

Maryland: Seller Name on Ebay: mdcompschaefer

New York: Seller Name on Ebay: nyssurplus-albany

Pennsylvania: Seller Name on Ebay: pastatetreasury

Rhode Island: Seller Name on Ebay: riunclaimedproperty

Texas: Seller Name on Ebay: tx.unclaimed.property

Washington DC: Seller Name on Ebay: DistrictofColumbia

Wisconsin: Seller Name on Ebay: wi.unclaimedproperty

 

The Fed Wants to Take OUR Money, Again!

Tuesday, May 17

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Many of the country's states are looking at unclaimed property and the surplus funds associated with them to help them with their budget deficits also known as Unclaimed Property Divisions.   

 According to the Center on Budget and Policy Priorities regarding the 2010 budgets, 48 states have addressed shortfalls in their proposed budgets, which total $192 billion dollars or 29% of state budgets - the largest monetary gap ever on record.  At the rate that this country is going, this amount may be dwarfed.  

 With a deficit of this magnitude, states are looking for ways to generate revenue to help the budget deficit; states are looking at Unclaimed Property Divisions to help loosen the noose that is steadily strangling them. 

The main reason unclaimed property funds is looking like a relevant solution to help lessen the deficit is because only about 1/3 of the money unclaimed actually finds its way to the rightful owners despite the fact that each state claims that it takes aggressive steps or efforts in locating the owners.  

There are dozens of Agencies and Organizations that those funds could be in. The Unclaimed Property Division of that agency then holds these assets in trust for their rightful owners until it can locate them and return their property.  The Unclaimed Property Division usually will send out a letter to try to locate the individual(s), many times, unsuccessfully. There are many states where they are not required by law to let the individual(s) know that monies are available to them.  

While the unclaimed property funds are sitting in the state coffers, the states are tapping into those funds and using them. They do not want that money to be found because after a statutory period, many states keep or escheat those funds and then can do or use those funds however they please.  

The National Association of Unclaimed Property Administrators (NAUPA), declare that state treasurers and other agencies have a total of at least $32.877 billion that is currently being safeguarded for 117 million accounts.  Many states have already put into effect laws that allow them to take unused gift card money even if it has no expiration date.  In New York alone, the amount they collected was $9.6 million for the year 2008 (Please see my other article on Gift Cards: They do expire).   It is only a matter of time before states have passed additional laws that give them the authority to take these funds.

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Unclaimed Property: Where does it go?

Friday, April 01

There is unclaimed funds and property in every state in the country.  There are laws on the books for how all types of unclaimed funds and property is to be handled by the various companies that are holding them.

These assets are to be considered lost or abandoned (usually from inactivity) after three to five years.  During this time, these companies and businesses are supposed to make an effort to return these assets to their rightful owners.  After this period of time expires, they are then to turn over the funds and property to the state’s unclaimed property office or appropriate agency.

In the U.S. Supreme Court decision (Texas vs. New Jersey, 379 US 674, 1965), “Jurisdiction to escheat abandoned intangible personal property lies in the State of the creditor's last known address on the debtor's books and records or, absent such address or an escheat law, in the State of corporate domicile -- but subject to later escheat to the former State if it proves such an address to be within its borders and provides for escheat of such property. Pp. 379 U. S. 680-683.”

What this says is that the unclaimed funds and/or property is returned to the state of the property owner's last known address. If an address is unknown, it is returned to the state where the business holding the funds is incorporated.

A major flaw with this is that in many of the unclaimed or abandoned property cases, the individual(s) that are said cannot be found have been at the same address for many years.  In one case, the Claimant was at the same address for 34 years in California.  How do you not find or notify this person when they haven’t moved in so long?

The state’s unclaimed property office attempts to find the rightful owners by sometimes placing advertisements in newspapers and setting up at county and state fairs trying to locate the owners of lost, abandoned or unclaimed funds.

Depending upon the state depends on whether or not there is a time limit on claiming your funds or property. Some unclaimed funds and/or property that have been deemed lost or abandoned has been reunited with its rightful owners 30, 40, and even 50 years after it was turned over to the state.  In other cases, states keep escheated funds after 3,5, and 7 years.

Government Takes What’s Yours (What else is new?)

Thursday, March 31

Gift cards.  Ever get one for a gift?  Ever give them out as one?  You might want to start changing your mind on what you do with them and how you use them, whether you get one or give one.

Why?

Simple, because states that are confronted with ever sinking tax collections and a rising mountain of debt are going after any additional revenue that they can find, and what they have found is unused gift cards.

Numerous states are looking to put forth legislation that will give them the right to go after and collect gift cards that remain unclaimed or unused, even those that have no expiration date.  Many states already take the funds from cards that currently have an expiration date.

For many years, states have been looking under every rock that they can find to help slow the revenue withdrawal symptoms they are experiencing because of the recession.  What they have found are the county and state coffers of unclaimed funds and a way to use them, especially unused, untapped gift cards.

Americans spend every year $65 billion in gift cards.  This does not include prepaid cards by banks.  Every year Americans throw away $6.8 billion by not redeeming them, according to research done by TowerGroup, a financial consulting firm.

The New York Times estimated $3.5 billion in gift cards went unclaimed during last year's holiday season alone.

Consumer Reports completed a study where the group found that 62 percent of consumers are planning to buy gift cards. The survey continued, 27 percent who received a gift card never used them due to numerous reasons that included not having the time to use them.  Other top reasons were that they could not find anything that they wanted and the majority of the balance was that they completely forgot about the cards.

The National Retail Federation said retailers have opposed efforts to extend states’ reach into unredeemed gift cards.

According to the Securities and Exchange Commission filings, Home Depot Inc. reported $37 million in revenue from unused gift-card credit in 2009.

Best Buy recently had revenue in the amount of around $19 million in unused cards. Because of basing its gift card operation center in Virginia, the unclaimed balances are able to go straight to Best Buy's bottom line.

As states target these dollars, companies are moving and separating their gift card operations to friendlier states that won’t go after these dollars.

It won’t be long before states go after the unclaimed funds so that they have use of that money to help balance their budget. 

The key word is help, not balance. 

Their spending is too far-gone to ever get any kind of balance.

Why are Asset Recovery Specialists portrayed in a bad light?

Sunday, March 27

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There is over $400 Billion dollars available in unclaimed property departments in all 50 states.  Approximately, $33 Billion of that money is from tax sale and mortgage foreclosure overages.

States call us Money Finders and pass laws putting limits or “capping” how much money can be made from helping people locate funds that they did not know existed.

States like to say that companies like ours and people involved in this type of business are piranhas or sharks that prey on the unsuspecting public taking advantage of them when they need help and are the most vulnerable, especially after a property has been taken through a tax sale or mortgage foreclosure.

We are not Money Finders and are not, (in most cases) subject to those types of laws. Money Finder laws are for money that has been escheated and is at the state level. The money that we are helping people with is usually located at the county level.

Escheatment: Every State requires financial institutions to report when property has been abandoned or unclaimed after a specified period of time. When money is transferred to the state level from the county level. If the Surplus Funds or Excess Proceeds balances have remained unclaimed for the period of time specified by State law (which varies from State to State), the county must report the account to the State where the account is held. The State then claims the overage balances through a process called "escheatment."

 The funds that we locate are not found on websites that are free to the public to check, but are found through lists that we acquire through means of investigative research that take time, money and resources.

We typically earn from 30-50% of the Surplus Funds or Excess Proceeds (if we are successful in our collection abilities) by locating and tracking the people entitled to these overage funds. At no time do we collect up-front fees or money from these individuals.  Any expenses that are reimbursed to us come from money collected.  If we fail to collect, then the individuals do not owe us anything.

Counties that receive and hold onto these overage funds are supposed to make a “concerted effort” to reach out and get hold of the people due these funds.  This effort for some is sending out a letter to the last known address, which… you guessed it, was the tax sold or foreclosed home. Many times, the county or agency doesn’t have to make any effort at all.

In many states, once the money has been escheated, if it is not claimed within a certain period of time, that state gets to keep the funds and use them for their own purposes.

With that being said, if you were the state, how much effort would you actually expend to locate the owners of the funds?

Are we really the bad guys here?  We’re the ones making the effort to find the money and the people it belongs to.  They don’t want to make the effort because they want to keep the money for their own purposes.

 Who are really the bad guys?

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Surplus Funds, Overages, Excess Proceeds... Learn how

Tuesday, March 08

Many of you are familiar with Rick Dawson and his Overage course (if not, send me an email and I will provide you with a special link).

I've been in the niche market known as surplus funds, excess proceeds and overages (to name the most widely known names) for many years now.

Most people know about Tax Sale Overages, however, most don't know about the mortgage foreclosure overages and the opportunities that are there. 

Well, I've just been asked by Rick Dawson to be a special guest on a call with him to speak about mortgage foreclosure overages and the amazing opportunities that exist from this side of the business which is relatively unknown.