Billions in gift cards go unspent

January 2, 2012

By Phil Izzo

$41 Billion: The total amount of money on gift cards that went, or is likely to go, unspent from 2005 to 2011.

Gift cards are becoming an increasingly popular holiday present, but as the market grows in value the question of what happens to money that goes unspent still looms large.

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The vast majority of the money put on gift cards gets redeemed, but Riley estimates that since 2005 $41 billion in money on gift cards has been lost or is likely never to be cashed in. The lion’s share of money lost on gift cards from 2005-2009 came from fees and expiration dates. All that changed with the passage of the Credit Card Accountability Responsibility and Disclosure Act of 2009 that was signed into law last year. The Act largely forbids fees on cards sold by retailers (cards given away as promotional items can still charge fees), and it prohibits expiration dates less than 5 years after the card is purchased.

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But some states don’t allow companies to keep unused gift-card cash. They demand that companies give the money to the state after a certain period of time to add to unclaimed-funds accounts. States claim this is a way to reunite consumers with their unspent money, but practically it’s a way for cash-strapped governments to give themselves more liquid funds. Money the state holds as unclaimed funds can be used for general purposes until someone claims it. For example, in 2008 — the most recent year for which data could be obtained — New York state collected $9.6 million in unredeemed gift cards and returned around $2,150 to the rightful owners.

Read the full story here.

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New York Insurers Pay up On Unclaimed Death Benefits

January 2, 2012

Wall Street Journal article by LESLIE SCISM

Three children of a New York City firefighter who died in 2005 at age 91 and the daughter of a dentist who died in 2000 as an octogenarian are among the 1,209 New Yorkers benefiting from a crackdown on insurers to pay overdue death benefits.

State residents have received a total of $16.9 million in recent months, thanks to the push by officials here and in other states to make life insurers cross-check customer rosters against a Social Security Administration death database, according to a report released last week by the New York’s Department of Financial Services.

Now, a human face on the problem—which state officials say could total $1 billion nationally—is emerging, as some of the New York beneficiaries agreed to help the department publicize the matter by giving interviews.

“If the beneficiary is aware, they should do their part [and file a claim], but there are instances when someone lives into their later years, and they’re physically unable to convey that a policy exists,” said Karen Masucci, daughter of firefighter, roofer and appliance-repairman Norman Kattenstroth, who died in 2005 at age 91.

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New York officials said the matching efforts they pushed this summer for insurers licensed in the state yielded $52.6 million in payments to a total of 8,000 people, including the New Yorkers.

The largest payout was $673,485; the average in New York was about $14,000, while across the country payments averaged less than half that. Many of the smaller payments are decades old and may have been bought to largely cover funeral expenses. The most overdue payment dated to 1970.

Insurers are processing an additional 28,000 claims, while continuing to check out hundreds of thousands of other potential matches, the state said.

Read the full story here.

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Unclaimed Funds of the Rich and Famous

March 3, 2011

MarketWatch.com Article by Tom Bemis

Thursday, February 10, 2011

From Angelina to Zsa Zsa, Steven Jobs to Sergey Brin, the chairman of the Fed to the CEO of Goldman Sachs, the famous and the rich share a common failing with the rest of us: they’ve misplaced some of their money.

Nationwide the pool of unclaimed property held by states is close to $33 billion and growing.

A MarketWatch review of some of the major unclaimed property sites maintained by the states revealed some surprising names and organizations that have unclaimed property.

Read the rest of the article here.

See the full list of celebrities with unclaimed property here.

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Tracking Down and Collecting Unclaimed Life Insurance

February 27, 2011
By Paul Sullivan
Published: February 25, 2011
Hundreds of millions of dollars in life insurance goes unclaimed each year simply because the beneficiaries do not know the money exists.

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Dirty Truth about New York’s Unclaimed Property

February 24, 2011

New York has the unenviable reputation of having the fastest rising pile of unclaimed money out of all the states in the country. The unclaimed property list continues to grow at an alarming rate in New York. Almost $25 million inactive bank, business, and government accounts all contribute towards this million dollar unclaimed property amount. While the state treasury is taking all the relevant steps to locate the owners of unclaimed funds, the success rate has still not reached a satisfactory level.

In some cases, owners are coming forward to claim their lost funds but the absence of adequate documentation makes it impossible for the state to release the funds. The launching of a new unclaimed property website couple with joint exercises with NAUPA has yielded better results, but the volume of unclaimed funds is increasing in size with every passing day.

New York State Comptroller’s Office of Unclaimed Funds (OUF) is also collaborating with the state treasury to return the unclaimed funds to its actual owners. This aggressive reclaim awareness program has shown very successful results and has been received very enthusiastically by the citizens of New York. A boost in the number of claims across the state has also been witnessed by the aggressive program. The outreach program effectively conveys the message across the state of New York by participating in a variety of public events. The New York State Comptroller’s Web Site can be accessed at www.osc.state.ny.us.

In the middle of all these constructive efforts to reunite the owners of the unclaimed funds with their rightful money, there are some notices of government apathy. Many of the citizens of New York are concerned that the state is doling our money to welfare programs run by the state without informing the citizens to whom this money belongs. A lot of voices in the state have displayed their concern over this and this has been rightly conveyed to the decision makers. Many of the New York citizens feel that the use of unclaimed property towards state run programs is solely done for political reasons.

New York is one of the most employable and ethnically diverse states in the country, not to mention about its cosmopolitan culture, which translates into a large number of migrant workers. The workforce migrations are also very regular and make a great impact on the volume of unaccounted funds and financial accounts. The state of New York also publishes an “Abandoned Property Supplement” of the New York State Register, which contains a list of abandoned property. This supplement is published by New York State Department of State, 162 Washington Avenue, Albany, NY 12231.

This is not to undermine the efforts of New York as one of the most successful states as far as reuniting the owners with their lost money is concerned. The outreach program of the state, along with the National Association of Unclaimed Property Administrators (NAUPA), has created a good impact and the awareness levels regarding the unclaimed property has increased substantially in the last couple of years. With unclaimed funds sprinting rapidly towards the $15 billion mark, the state authorities are leaving no stone unturned in locating the owners of these lost funds.

Article by Nicole Anderson: Republished with permission.

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