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Unclaimed Property Focus
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UNCLAIMED PROPERTY FOCUS is a blog written by and for UPPO members, featuring diverse perspectives and insights from unclaimed property practitioners across the U.S. and Canada. We welcome your submissions to Unclaimed Property Focus. Please contact Tim Dressen via tim@uppo.org with any questions about submitting a blog post for consideration and refer to our editorial guidelines when writing your blog post. Disclaimer: Information and/or comments to this blog is not intended as a substitute for legal advice on compliance or reporting requirements.

 

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Debugging the Unclaimed Property Reporting Codes

Posted By Christa DeOliveira, CIA, CCEP, compliance officer at StoneRiver, and UPPO Annual Conference speaker , Thursday, January 16, 2014
Updated: Thursday, January 16, 2014

Codes are a central aspect of unclaimed property reporting. Essentially, codes enable holders and states to speak the same language. With the different kinds of codes and the many variations within each respective kind, selecting appropriate codes for a given set of circumstances can be challenging, and at times it is an art, rather than a science. To understand the proper use of codes it can be helpful to step back and look at the statutory and regulatory underpinnings, in addition to the intention of what the codes are designated to communicate.


The kinds of codes include

  • Property Type Codes
  • Relationship Codes
  • Deduction and Withholding Codes
  • Addition Codes
  • Paid or Deletion Codes·
  • Security Delivery Codes
  • Country Codes
  • County Codes
  • Owner Type Codes
  • NAICS Codes

Property type and relationship codes are arguably the most important categories of codes.


Property Type Codes
In the NAUPA II Standard Format this is a four character code that identifies the specific property type. The leading two letter portion represents a subgroup of related property types, and when combined with numbers it results in a code with an assigned corresponding brief description. Using AC01 and AC02 as examples, AC refers to an account, such as what a bank or a financial institution would provide. When 01 is added, then AC01 identifies Checking Accounts; whereas, AC02 represents Savings Accounts, according to the current NAUPA format.


Relationship Codes

Relationship codes are used to document the relationship between respective owners of the same property. This allows the holder to relay this important information to the state. For example, for an unclaimed checking account that belongs to two owners, the relationship code associated with this property could be AN (for "and”), which would show that the owners have an equal legal entitlement to the property. Whereas, if the relationship was OR (for "or”) then presumably the property could be claimed independently by either party. While these examples are straightforward, relationships can be more complicated and properly communicating the legal relationship between the owners to the state becomes even more significant.

The NAUPA II Standard was created in an effort to promote uniformity and over the years has undergone modifications and revisions. Despite NAUPA’s consistent efforts to achieve standardization, universal uniformity remains elusive. In the absence of complete uniformity holders will need to continue to ensure they are abiding by each individual state’s requirements.

NAUPA’s Uniformity and Standardization Committee is in the midst of a project related to relationship codes. As part of this project, NAUPA is working to establish a broad listing of relationship codes in an effort to produce a listing that can be universally accepted by states. Additionally, NAUPA is developing a short paragraph describing each relationship code. Undoubtedly, this would be helpful to holders in identifying the most appropriate relationship code to use. Any developments related to relationship codes will be covered at the Unclaimed Property Professionals Organization’s Annual Conference in Grapevine (Dallas), Texas March 23-26, 2014.

As part of NAUPA’s five year strategic plan, unveiled in May 2013 at the Treasury Management Training Symposium of the National Association of State Treasurers (NAST) in Pittsburgh, Pa., a key goal is updating NAUPA’s file format by the end of 2017. It is important to note this updating of the NAUPA format is anticipated to take into account pending revisions to Uniform Unclaimed Property Act. Assuredly, all codes will be reviewed and considered for revision as part of any new NAUPA format.

There is clearly a mutual benefit to both holders and states to use the appropriate code to convey key information in unclaimed property reporting. For a better understanding of the statutory and regulatory foundations, the intent behind the codes, the art of selecting the best code, the variations between states, and a more in-depth discussion of the pending NAUPA relationship code revisions attend the session, Debugging the Codes, Rules and Regulations, on Wednesday, March 26 at the 2014 UPPO Annual Conference.

About the author: Christa DeOliveira, compliance officer at StoneRiver, is a UPPO past president and will be speaking at the 2014 UPPO Annual Conference, March 23-26, 2014. She is presenting the session entitled Debugging the Codes, Rules and Regulations. For questions about this blog posting contact Ms. DeOliveira at christa.deoliveira@stoneriver.com.

For questions regarding the 2014 UPPO Annual Conference contact Jackie Cote at 763-253-4341 or jackie@uppo.org.

Tags:  Annual Conference  education  NAUPA II Standard Format  property type codes  relationship codes  unclaimed property reporting  UPPO 

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UPPO Buyer’s Guide – What do you think?

Posted By Administration, Friday, December 13, 2013
Updated: Thursday, December 5, 2013

It has been five months since the UPPO Buyer’s Guide launched. If you haven’t checked it out, it’s a complete categorized listing of UPPO’s service provider members. It was created to help you, the holder, navigate unclaimed property services available. You can find everything from consulting services, legal counsel to software providers. The best part is it’s free and available to everyone.

Have you used the Buyer’s Guide? We’d love to know what you think, answer the poll question below.

If you have questions about the Buyer’s Guide, or are a service provider member and would like to upgrade your listing contact Jackie Cote at 508-883-9065 or jackie@uppo.org.


Tags:  Buyer’s Guide  free  service providers  unclaimed property  unclaimed property services  UPPO 

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Internet Daily Deals – Don’t Overlook the Unclaimed Property Compliance Risks!

Posted By Michelle Andre, UPPO member, Thursday, December 12, 2013
Updated: Thursday, December 12, 2013

If you are like me, since the holiday season began, not a day goes by without receiving several emails with daily deal offers for products and services. Today’s deal offers include, vouchers for kickboxing and grass-fed/organic holiday gift baskets. These offers are typical of the daily deals offered by daily deal marketers (e.g. Groupon, LivingSocial, and Amazon). For $19 the recipient will receive two weeks of kickboxing training valued at $70 and for $139 the recipient will receive $278 worth of an assortment of grass-fed beef and organic chicken. What a deal!

Daily deals are great for consumers because they can purchase goods and services at significant discounts. However, to receive the benefit of the bargain, the recipient must use the voucher within the stated period. For example, the deals described above require the recipient to use the voucher by March 2014. If the voucher is not used by the specified date, the promotional value will expire and the recipient will only be entitled to the amount paid for the voucher. For the kickboxing lesson that means a loss of 73 percent of the value.

For the merchants, daily deals mean greater exposure to a wider variety of potential consumers and for marketers daily deals mean revenues. In 2013, it is expected that daily deal marketers will generate $3.3 billion in revenues (a growth of 15.2 percent over 2012). However, the daily deal business model raises several significant unclaimed property compliance issues because an estimated 22 percent of vouchers go unredeemed. One of the unclaimed property questions raised with this business model, is what exactly is a daily deal voucher? Is it a coupon, a gift card, a combination coupon and gift card or something else entirely? This is a key question for unclaimed property compliance because the classification of the voucher impacts how the property will be treated for unclaimed property compliance purposes. For example, if the voucher is treated as a coupon, it would likely not be treated as reportable property. However, it is unlikely that the entire value of the voucher would be treated as a coupon because some consideration was paid for the item.

Is the voucher a gift certificate? Connecticut takes the view that the voucher is a gift certificate. In July 2011, the Connecticut Attorney General sent a letter to Groupon asking several questions about the company’s product and business practices, indicating the state believes that Groupon’s product may fall within Connecticut’s definition of a gift certificate. Similar to other jurisdictions, Connecticut defines a gift certificate as "a record evidencing a promise, made for consideration, by the seller or the issuer of the record that goods or services will be provided to the owner of the record to the value shown in the record.” Groupon and the Connecticut Attorney General reached a settlement agreement in April 2012, with Groupon agreeing to provide improved consumer disclosure information regarding use of the sales (paid) and promotional (discount) values of the voucher. But the question of whether the voucher is regarded as a gift certificate under Connecticut’s unclaimed property law was not resolved. In the April 2012 press release, the Connecticut Attorney General said, "reasonable minds may differ about whether Connecticut’s gift card law was intended to apply to these kinds of vouchers.” The same can be said about the other 52 jurisdictions’ laws regarding whether or not gift certificates are subject to reporting. That is, even in the 30 plus jurisdictions where unredeemed gift certificate balances are exempt in some form from reporting, there is a question as to whether daily deal vouchers are gift certificates subject to the exemption or something else captured by the jurisdictions’ "catch-all” language. This is an issue that has not been addressed by most jurisdictions. Practitioners were hopeful that this issue would be addressed in at least one of the several law suits filed against Groupon and LivingSocial to provide some clarity, but both companies settled these lawsuits in 2012.

Assuming the voucher is a gift certificate subject to reporting, another issue that must be addressed is what is the reportable value? Is it the face or market value, the price paid, issuer’s cost, or some other amount? This question needs to be addressed to ensure compliance with the applicable jurisdiction’s law. It would seem unfair to require remittance of $70 if the kickboxing voucher goes unredeemed because only $19 was paid for the voucher. But we all know that fairness does not necessarily drive unclaimed property outcomes. As a result, the specific product and the applicable state’s law must be analyzed.

Another key issue with the daily deal model is which entity – the merchant or the marketer (e.g, Groupon, LivingSocial, and Amazon) – is the holder for unclaimed property purposes? In an attempt to add clarity to this issue, some marketers have added language to their sales agreements that the "merchant is the holder and issuer of each voucher … and is solely responsible … for any unclaimed property liability.” So, at least based on the agreement, the merchant is the holder and is required to comply with the jurisdictions’ unclaimed property law, and therefore, is responsible for determining how to address the issues outlined above. However, in 2013 the number of daily deal companies is estimated to be in excess of 600 companies. Not all of these companies may have addressed this issue in their agreement or address it in a similar manner. Furthermore, the marketers may not be off the hook because the jurisdictions may deem the agreement irrelevant in determining who is the holder and may in fact determine that the marketer is the holder. As such, my gift to you this holiday season is to recommend your company, whether it is a merchant or a marketer, seek unclaimed property consulting assistance in developing a compliance/planning strategy for all those daily deals that will be sold this holiday season.


I think I will get that kickboxing voucher for my daughter.

Michelle Andre, managing member of Tre Towers Advisory Group is a UPPO member and serves as a committee member of the UPPO Government Relations and Advocacy Committee. If you have questions for Michelle, you can contact her at michelle.andre@tretowersadvisory.com or at (703) 222-5010.



More Resources
Looking for unclaimed property consulting services to help your company? Check the Buyer’s Guide
Join UPPO, to receive more information like this!
2014 UPPO Annual Conference – March 23-26, 2014, Grapevine (Dallas), Texas


Tags:  certificate  compliance  Connecticut  gift card  Groupon  Living Social  unclaimed property  voucher 

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Apply for the UPPO Scholarship by Dec. 31!

Posted By Emily Lee, UPPO, Thursday, November 21, 2013
Updated: Thursday, November 21, 2013

Before applying for the inaugural UPPO Scholarship, Ann Hopkins, like most, had limited knowledge of unclaimed property. At the time, Ann, a nuclear engineering major was in her sophomore year buried in books about fluid physics and engineering dynamics at Penn State University studying nuclear engineering.

 

UPPO member, Chris Hopkins and Ann’s father, learned about the UPPO Scholarship and encouraged Ann to apply. "It created an open dialogue between us about unclaimed property and the challenges it presents for companies. She actually found it quite interesting and equated it to nuclear engineering because not many people understand it,” said Chris.

At the 2013 Annual Conference, Ann was awarded the $1,000 UPPO Scholarship. "It [UPPO Scholarship] is a good opportunity for members with college-aged children to help offset the significant educational expenses,” Chris said.

All members and their dependents are eligible to apply for the scholarship to cover post-secondary education. The $1,000 scholarship is renewable for up to a maximum of three years, earning a total of $4,000. Even if you or your dependents aren’t eligible to apply, "I would encourage people to make a contribution to the scholarship,” says Chris.


Applications are being accepted until Dec. 31, 2013. Apply today or encourage your dependents to apply and become the second recipient of the UPPO Scholarship!

 

Photo: Chris Hopkins and daughter Ann Hopkins

Tags:  education  scholarship  unclaimed property  uppo 

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Catching “UP” on Canada

Posted By Will King, UPPO member, Thursday, November 14, 2013
Updated: Thursday, November 14, 2013

The passage of unclaimed property laws in countries across the globe is a trend that continues to gain momentum. In staying on top of these trends, holders and practitioners are monitoring a series of changes happening just north of our border in Canada.

Unclaimed property initiatives in the Canadian provinces mirror their U.S. neighbors in many respects. Significantly, in 2003, the Uniform Law Conference of Canada (ULCC) developed a Uniform Unclaimed Intangible Property Act (UUIPA). Much like the U.S.’s unclaimed property jurisdiction rules, under the UUIPA, an enacting province or territory would be entitled to receive unclaimed intangible property if the property belongs to an owner whose last known address as shown on the holder’s records is in that province or territory.[1] Also similar to U.S. statutes, the UUIPA contained provisions that include an owner notification process by holders, the requirement to remit property after a statutorily defined period of time, and establishment of a public registry of unclaimed property. Still, the status of unclaimed property laws in each province is different. An update on four key provincial unclaimed property laws (or efforts to enact such a law) is provided below.

Ontario
In 1989, Ontario passed the Unclaimed Intangible Property Act, however at the time, the statute was not proclaimed in force. In 2012, the Ontario budget announced the government’s intention to create an unclaimed property scheme that mirrors that of the United States. Under the proposed plan, intangible property currently lying unclaimed in institutions in Ontario is to be remitted to the Ontario government where an owner may claim it, and where it is to be used to the benefit of Ontarians until such time as it is claimed. The property intended to be included in the program includes amounts due under insurance policies, unpaid wages and interests recognized by share certificates and bonds, as well as other property types.

Using the UUIPA as the basis of discussion, in June 2013 the Ontario Ministry of the Attorney General (OMAG) held a series of roundtable stakeholders meetings in Toronto. The meetings were held in order for stakeholders to express their opinions related to the new law. In addition, Ontario sought its second round of written comments from stakeholders which were due back on Sept. 18.

A summary of the stakeholders meetings issued by the OMAG revealed that – perhaps not surprisingly - consumers were very interested in the creation of a program encompassing as much unclaimed property as possible, similar to programs in the United States and Alberta (discussed further below). Further, in their summary the OMAG indicated holders were concerned about a new law creating undue burdens on them, particularly the cost burden of having to deal with low value property, that the law’s application not be retroactive in nature, and that dormancy periods be uniform among the provinces. You can find out more about the proposed Ontario unclaimed property law by visiting: http://www.attorneygeneral.jus.gov.on.ca/english/about/uipp_consultation.asp

It is possible that a form of the UUIPA may ultimately become Ontario law. If so, it’s scope could be quite broad. Consider that, the UUIPA applies to credit balances, shares, cash, bonds, amounts due and payable under insurance policies, trust funds, distributions from retirement or pension plans, gift certificates, etc. The dormancy periods are generally three or five years depending upon the property type. Under the UUIPA , due diligence mailings are required for property valued at $100 or greater but is not required for items the holder has reasonable grounds to believe that the correct address of the owner cannot be reasonably ascertained. Within four months from the end of the calendar year, a holder is required to report and remit unclaimed property.


For more about the UUIPA visit: http://www.ulcc.ca/en/uniform-acts-en-gb-1/545-unclaimed-intangible-property-act/1114-unclaimed-intangible-property-act

Quebec
A comprehensive unclaimed property program has existed in Quebec since 1997. Additionally, Quebec has incorporated many aspects of the UUIPA into its unclaimed property law and places requirements on financial institutions, insurance companies, trust companies, mutual fund and other investment dealers, credit unions, pension plans, and more. Specifically, Quebec’s unclaimed property requirements apply to financial assets, property of successions, property of dissolved businesses, property without an owner and property located in Quebec whose owner is unknown or untraceable. Like the UUIPA (and in the U.S.), jurisdiction is based on the last known address of the owner.

The dormancy period for most of the property types covered by Quebec’s unclaimed property law is three years. If the value of the property is $100 or more, the holder is required to conduct a reasonable search to locate the rightful holder and notify him or her in writing about the property and how to claim it. Property that remains unclaimed must be reported to the Revenu’ Quebec three months after the end of the fiscal period during which the asset became unclaimed.

More information about Quebec’s unclaimed property law can be found at: http://www.revenuquebec.ca/en/bnr/pfnr/detenteur/procedure_instit.aspx

Alberta
On Sept. 1, 2008, Alberta’s Unclaimed Personal Property and Vested Property Act (UPPVPA) went into effect. Like many U.S. laws, the UPPVPA specifically excludes gift certificates, retail business credits, and certain other property from its scope. However, it does apply to uncashed checks (including payroll), accounts receivable credits, refunds, bonds, shares, amounts due and payable under insurance policies, retirement and pension fund distributions, etc. While the law as written applies to securities, a pending review by the Alberta Treasury Board and Ministry of Finance (ATBF) of the application of the Act to securities property has delayed application of the law to this property type.

Similar to the laws in the United States, the Alberta UPPVPA requires the delivery of notice to the owner at the owner’s last known address in the books and records of the holder. However, the Alberta law does not require due diligence be performed when the holder knows the address to be invalid although such information must be included in the unclaimed property report.

Reports and remittance are due with 120 days after Dec. 31 and Alberta requests reports be delivered via their online website portal at: https://tracs.finance.gov.ab.ca/publicTracs/submitUnclaimedProperty.do?event=init


For more about the Alberta UPPVPA and compliance requirements go to: http://www.finance.alberta.ca/business/unclaimed_property/info_property_holders.html

British Columbia

Quite different from the Alberta unclaimed property laws and those of most U.S. states, the British Columbia unclaimed property law and regulations apply narrowly to certain types of property valued at specified dollar thresholds. Unlike state unclaimed property laws and the Alberta law, uncashed vendor checks and outstanding wages and payroll items are not covered by British Columbia's Unclaimed Property Act (the BC Act).

Note however, that the BC Act does apply to outstanding items that may be held by insurance companies. More specifically, amounts of $200 or greater which are due and payable by an insurer under the terms of an insurance policy, such as premium refunds - which are not due under a life insurance policy, annuity, endowment policy or a variable insurance contract - are covered under the BC Act and carry a three year dormancy period. Amounts due and payable by an insurer under a life insurance policy, an annuity, an endowment policy or a variable insurance contract relating to segregated funds, and which are $1,000 or greater, have a three-year dormancy period. In addition, money deposits of $200 or greater that are not deposits in a savings association or a deposit for an insurance premium, are covered property, but only if there is a right to receive a cash refund of the deposit. These deposits carry a three year dormancy period. Other types of property are covered under the BC Act as well if they meet particular dollar thresholds, such as money orders, securities, and trust and retirement plan distributions.

Under the BC Act, businesses that hold covered property are required to make reasonable efforts to locate the owner and to notify them of the property within six months from the end of the dormancy period. If the owner cannot be located and notified within 12 months of the dormancy period, the property is considered unclaimed. Once property is considered unclaimed, a business must consider whether reporting and remitting it to the British Columbia Society (BCS) is mandatory or voluntary and, if it is voluntary, what its obligations are if it does not report and remit. Under the BC Act, the following businesses must report and remit property that is deemed unclaimed: credit unions, debt collection agencies, real estate agencies, and companies in liquidation.

Businesses for which reporting and remitting property is voluntary, have the option of reporting and remitting property to the BCS or retaining the property and doing the following:

  1. Publishing designated information about the property and owner in a publicly-accessible database as specified in the BC Act, and
  2. Establishing and maintaining an information line or other point of contact for owners inquiring about unclaimed property, and
  3. Making available to the public, information about whom to contact and how to make a claim, and
  4. Establishing and following procedures for reviewing and processing claims, including a process for appeal of a decision to deny a claim.

For more information about the BC unclaimed property requirements visit:

http://www.unclaimedpropertybc.ca/submit.php

Many unclaimed property holders already face the daunting task of staying informed of legislative and regulatory changes in the United States year after year. Now, with the emergence of a Canadian unclaimed property scheme, holder compliance efforts will accordingly increase in complexity. However, it’s imperative to stay on top of these changes so appropriate and timely compliance program adjustments and determinations can be made.

About the author: Will King is the Associate General Counsel and a vice president at Unclaimed Property Recovery & Reporting (UPRR). If you have questions for Will you can contact him at wking@uprrinc.com or 857.444.6004.



[1] The commentators to the UUIPA believe that this is "the fairest, clearest, and most practical basis for determining the jurisdiction to which unclaimed intangible property should be reported and transferred.”


More Resources
Overview of Ontario’s Unclaimed Property Law Feedback

Tags:  Alberta  British Columbia  Canada  Ontario  Quebec  reform  unclaimed property 

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