Let's get it together Ontario for the sake of all residents (and former residents)

The submission deadline for Ontario's unclaimed Property Program has been delayed until Sept 18th. I guess the thought is that we are already 40+yrs behind the US & so what’s a few more weeks especially when the weather is so delightful.

But sadly, this is the second try for Ontario (!)

Ontario was the first province to pass Unclaimed property legislation in Canada (1989). 22 years later it was still not in force and the Bill was repealed.

Of my many suggestions to the Attorney General here is one….

No more push to paperless until Canada gets all Provinces onboard with Unclaimed Property Legislation.

Yesterday I got a note from my RESP provider (Invesco Trimark). No more PRINTED semi-annual statements effective 2014. Not cool because this increases the risk that any funds with Invesco Trimark will go unclaimed. But Age Unfriendly as well. Do all Invesco Trimark Investors have online access? Really? 

The US considers such legislation as an important component of Consumer Protection Legislation-and it is! So...why are we some 40 years behind? The US has $58B in unclaimed funds/property despite the program but searching for assets is much easier.

In Canada ? The total is at least $4B and the searching is difficult. 

Read more on submissions to Ontario's Unclaimed Property Program

US Life Insurers finally do the right thing on unclaimed death benefits

Re: Insurers have been found to be collecting premiums till the accounts are depleted...even though they should or 'did' know that the policy owner was deceased..They have reached a $267M in settlements 

It’s been going on around the US for a year or so…Individual States, squeezing Insurers to come ‘clean’ on death benefits that have remained unpaid instead of going to rightful beneficiaries. Nearly $267M in unpaid death benefits have already been recovered in the State of California alone.

In the US they take unclaimed property/funds very seriously. In the US it’s serious because unclaimed property has been an important part of consumer protection legislation more/less the1940’s. Not so in Canada.

In the US, each state requires ‘holders’ to forward unpaid or unclaimed amounts to them and each State proactively looks for the owners. In the meantime, each State uses the cash, but for the most part there is no deadline for the asset to be claimed.

In the case of life insurance it might be difficult to determine when a death benefit is unclaimed-without knowing if the owner of the policy is actually deceased. The problem is solved by using the ‘death file’ which each insurer runs against their policies to determine the ones where the owner has died. The problem is that in some instances, the insurers, were able to use the ‘death file’ to stop paying annuities but not to stop collecting premiums on policies or to seek the beneficiary out in order to payout the death benefit. 

In California, almost a dozen insurers continued to deduct premiums against policies until all the cash benefit was depleted and then they closed down the account without notifying anyone. Of course, the onus is on the beneficiary to file a claim; but in these cases, there is no disputing the fact that the insurers knew the owner was deceased and in most cases, it was a matter of the beneficiary not knowing that there was a policy.

The state controller, John Chiang said, “it's ethically and morally wrong for an insurer to sit back and do nothing after finding out that a policyholder has passed away….

They should do what they promise," If you're going to spend billions of dollars advertising that you'll be there when people need them, then you should do it. You should do the right thing."

Sheila Bridgeforth, a company spokeswoman, declined to comment but said Prudential believes that "there is nothing more important than honoring our obligations to our policyholders."   Which is apparently the reason they settled up for $47M last year with the State of California which has resulted in beneficiaries like the one noted in the article, receiving death benefits years after they should have. Her Mother died in 1995 and her father passed away in 1999. In 2013, she received $11,000 from their policies. 

Read the full article here from the David Lazarus of the LA Times Dated June 18 2013

LA Times-Life Insurers finally do the right thing on unclaimed death benefits

Before you go…Mr. Carney:

(An open letter to Mark Carney)

There’s been a fair bit of ongoing analysis and controversy surrounding the remarks you made some months ago about Corporate Canada sitting on huge piles of “dead money” on their balance sheets that could be better utilized to feed the economy or failing that; returned to investors.

Stop sitting on your cash piles, Carney tells Corporate Canada

Financial Post Aug 22 2012

Free up 'dead money' Carney exhorts Corporate Canada

The Globe and Mail Aug 22, 2012

Canada's corporate 'dead money' grows as consumers fall deeper in debt

Toronto Star Sept 17 2012

Dead Money

Canadian Business Feb 12, 2013

Ottawa's 'dead money'

Ottawa Business Journal Dec 3 2012

Carney urges firms to spend cash or return to shareholders

CBC News August 23 2012

Estimates vary but it seems that the total balance of ‘dead money’ has increased as much as 40% since 2009; and may total as much as $526 Billion… and that has you concerned. 

That is indeed a lot of cash.  No question there.

But, as you head out on your new adventure and leave the Bank of Canada,  I think it’s only fair to point out that corporations are not alone in holding onto ‘dead money’ that could be better utilized to grow the economy.

I am a bit embarrassed to point out that our own highly respected Bank of Canada which you have so masterfully governed for the past 5 years, is itself currently sitting on $500Million in unclaimed funds which I think we could agree may also be described as “dead money” and money that could be much better utilized to feed the economy….if not the actual owners.  That might be possible, if only the Bank of Canada took a more proactive approach to finding those owners.

Indeed, the rise in the balance of unclaimed funds in the Bank of Canada certainly appears to rival the rise in ‘dead money’ in Corporations with an increase of 55% over the past 5 years (!) That’s an extraordinary increase on an extraordinary balance of ‘dead money’ given that the this balance of $500M only includes amounts turned over by federally (not provincially) regulated banks, and only after 10 years of inactivity and only where those accounts are held in Canadian dollars (no foreign $ amounts). 

Alas, despite this extraordinary increase on an extraordinary balance on a population of only some 34M Canadians, very little awareness and very little effort seems to be being made in trying to locate owners. Granted, the Bank of Canada does update this balance once a year and provides an online database for unclaimed funds; whereas, the same treatment is not afforded to the balance of Unclaimed/Matured Canada Savings Bonds which are also piling up at the BoC. 

It is not a published number but I understand the value of Unclaimed/Matured Canada Savings Bonds totaled $259M as of this past April which I believe would make that an increase of $147M or 231% or over the past 5 years. 

Extraordinary and Sad at the same time.

So, using the same argument you have made for ‘dead money’ in Corporate Canada…for the sake of the economy AND in this case, for the sake of Canadians generally, don’t you think we could put a little more effort into reuniting this money with owners?  

This is after all, the age of technology so one would think we could apply a little technology to finding owners and making things right. But as well,  if some inspiration is needed into this challenge, we can also look south for some good ideas given that the US has had consistent & comprehensive unclaimed property legislation in place for 50+ years. In the US, unlike the situation in Canada, unclaimed property legislation is an  important part of consumer protection legislation. Sadly, that's not the case in Canada; but it should be. Each state in the US has enacted unclaimed property legislation requiring the transfer of all unclaimed property to  that State who then takes a very proactive role in helping to return assets to owners. 

So before you go...perhaps you and Mr. Poloz could give the 'dead money' in the Bank of Canada some thought. 

Brenda Potter Phelan 

Legacy Tracker Inc.

Oakville and Cambridge ON

The secrets behind unclaimed safety deposit boxes

 

From a story by the New England Cable News
Post-Crescent Madison, Wis (AP)
Feb 16 2013

Unclaimed property, untold stories in safety boxes

I am sure any day now someone will realize that they could make the story of unclaimed safety deposit boxes a reality TV show but until they do so, I pass along this story by  New England Cable News which shines some light on how the US handles unclaimed safety deposit boxes (for obvious reasons, it fails to shine any light on what happens here in Canada but we will keep trying)

NECN - Unclaimed property, untold stories in safety boxes&

In the US, each State takes responsibility for the boxes after 5 years of no activity (most importantly, missed payments) because safety deposit boxes are considered unclaimed property and well, the US has had unclaimed property legislation for about 40+ years.

After reading the story of a typical day of opening abandoned safety deposit boxes in in a typical state like Wisconsin I have a new appreciation of why they REALLY try to return the boxes to the rightful owners.

Hundreds of boxes arrive at this particular office in Wisconsin but each State may vary in the additional amount of time they will hold abandoned items after receiving the boxes from the banks who have already held them for 5 years.. Wisconsin holds boxes for 2 years while Iowa will hold boxes for 10 more years.

"We've really tried to push our outreach efforts to let people know about unclaimed funds and getting money back to people," said Scott Feldt, the deputy state treasurer. "That's our major effort, that's why we are here."

They do so at by way of public events, radio, TV and newspaper interviews. They also publish lists of people owed unclaimed property in various newspapers and in their searchable online database.

More commonly, they hold coins and jewelry, old stamps and personal documents, like wills and marriage certificates. But often times unusual items of no monetary value re found in the boxes and they have no choice but to destroy. This story details some of those finds:

·        One box contained a Band-Aid box and two toenails, wrapped in tissue.

·        One box contained an empty envelope.(only)

·        One box contained nothing but spoons.

·        One box contained a Rolex box, but alas, no Rolex.

·        One box contained dental gold, teeth still attached

Some of the items are sold in monthly eBay auctions. The office holds the proceeds for the owner in the event someone later claims them.

Perhaps not these particular items but some items that are found to have value are sold in monthly eBay auctions and then the proceeds are held for the owner in the event someone later claims them.

And while it may depend on the State most will hold onto certain special items ‘in perpetuity’ like photographs and war medals which they know would mean the most…if they eventually find the rightful owners.

All in all, it seems like a fairly civilized and respectful process and transparent!

I look forward to unravelling the story of unclaimed Canadian Safety deposit boxes.

 

USA Unclaimed Property Balance hits $58 Billion yes $ 58 Billion

 

It looks like the unclaimed fund balances have recently  been updated by each State, federal and other organization as required in the United States as a new figure is being quoted for the total held. Ready....?

The new estimated value for unclaimed property is now ...$58 Billion.

Again, sad but true. That's a lot of money as it works out to approximately $186 per resident of the US. Imagine if that money was all put to use in the economy.

The list of assets included in what the US defines as unclaimed (or abandoned) property (or sometimes referred to as unclaimed assets or unclaimed funds) is quite wide ranging in the US and actually getting wider.

Common forms of unclaimed property in the US includes savings or chequing accounts, stocks, uncashed dividends or payroll checks, refunds, traveler's checks, trust distributions, unredeemed money orders or gift certificate/cards (in some states), insurance payments or refunds and life insurance policies, annuities, certificates of deposit, customer overpayments, utility security deposits, mineral royalty payments, and contents of safety deposit boxes.

Here's some further detail on this $58 Billion estimate:

·        $300 Million in pension benefits from employment owed to 38,000 individuals

·        $16 Billion worth of matured US savings bonds (more than 45 million bonds)

·        $153.3 Million in tax refunds that were not deliverable by the IRS

·        $1 Billion in unclaimed insurance policy proceeds

·        $41.7 Billion in unclaimed funds held by individual states.

This last figure of $41.7 Billion is worthy of some further explanation. .

While rules vary slightly between each state, specific types of property are considered as being ‘abandoned’ or unclaimed when there has been no activity for 1-5 years. At that point, all financial organizations or any organization holding such property or funds are required to turn them over to the State Treasury.

Each state then takes over the search for owners through websites, newspaper ads, and booths at Malls and events like State fairs and Exhibitions. While searching for the owners, the State can use those assets to fund government operations but the owner’s claim to the property remains intact. Of the $58 Billion in unclaimed funds that has been reported, $41.7 Billion is being held by individual States. .

"The money belongs to the owner in perpetuity. Even if the owner dies, then their heirs could come back and claim it," said Carolyn Atkinson, West Virginia's deputy treasurer for unclaimed property and a past president of National Association of Unclaimed Property Administrators.

More on this story:

WPTV news story on unclaimed funds

To learn more about the National Association of Unclaimed Property Administrators and for a link to all State databases : NAUPA Website

Google Alerts fuels my obsession with the problem of Unclaimed funds

Google Alerts has been fueling my obsession with the problem of unclaimed funds for a long time. Every day in my inbox appears stories related to the reporting of unclaimed assets or the actual reuniting of long lost owners with those assets.

These stories all come out of the US primarily and not from Canada. While the stories are heartwarming they are also troubling since 1) it confirms the very real problem that exists related to unclaimed property and 2) it makes me wonder how Canada could be so far behind in legislating unclaimed property regulations when those regulations have been in place in the USA for 40+ years and 3) I fear that no one in Canada really has any proper handle on the extent of the problem here and finally, 4) given a multitude of factors, the problem of unclaimed funds will continue to rise at an ever faster pace. The problem is global and will grow unabated without a 'multi-pronged approach' of awareness, legislation and a financial organizing solution that individuals can put to use to safeguard their hard earned, tax paid financial assets.

Here are 3 stories from 3 different States to give you a sampling of what I read every day.

Feb 5 2013

Report from KLKNTV news/Nebraska:

The State of Nebraska paid out more than $1,215M to residents in in January 2013 made up of $560,000 in cash and more than $655,000 in stock and safekeeping items including:

·        A woman from Lincoln, Nebraska received $60,404 in cash and more than $232,000 of valuables from a safety deposit box.

·        A couple from Omaha were paid out a claim worth $101,000

·        A man originally from Nebraska now living in Colorado received $60,000 in cash and more than $217,000 in valuables

·        Two brothers from Omaha each received more than $33,000 from an abandoned chequing account owned by their uncle who died in 2008

The unusually high amount was a result of additional effort put into finding owners and returning as much money as possible, as expeditiously as possible reported the State Treasurer. The State is holding more than $125 Million owed to 350,000 residents or former residents from Nebraska. The list of owners for property added to the database for 2012 will be published in all 16 Nebraska newspapers and to the online database provided by the State.

January 16 2013
Report from the Quad City Times/Illinois

The total amount of cash and assets returned to Illinoisans through the state treasurer’s office last year increased by 27 percent over 2011; to a total of $129 Million up from $101 Million the year prior. Amounts returned ranged from a couple of dollars to an individual claim of $9 million. The Illinois state treasurer (Dan Rutherford) was thrilled “it’s pretty big when you can put $129 Million back into the economy of Illinois without raising taxes.” The state currently has $1.7 Billion in cash and contents from Illinois bank safety deposit boxes that have been abandoned for 5 or more years that is looking to reunite owners with. In Illinois, one in eight people has an asset to be claimed.

January 8 2013

Report from AOL Finance/Wisconsin

 

54 year old Daniel DeMeuse from Porterfield Wisconsin awoke $28,000 richer when he found out that a friend had left him money years earlier but the inheritance had been delayed by probate. At the time that the Office of the State Treasurer of New Jersey contacted him he was an unemployed studio artist and used the money to take care of his elderly mother

 

After reading just a sampling of some of the many stories I read each week,  you will have a better understanding of the 'why 'behind Legacy Tracker.  I think it is imperative that individuals and families have a secure and simple solution to better organize their financial and estate information which will help reduce the risk of their assets being lost. But it’s just as imperative that each Canadian province recognize the problem, shine a light on it and legislate some protection. Please.