Unclaimed Property Reporting: Navigating the Path to Compliance

No one understands unclaimed property reporting better than Argent. Whether your needs are to train your team on unclaimed property compliance or to outsource the entire escheatment process, our dedicated compliance team and our National Consulting & Advisory Services Group are uniquely positioned to assist companies as they navigate the path to compliance with state and federal regulations.

Argent acts as a true partner in addressing specific portions or the entire process of attaining unclaimed property compliance. In doing so, we help reduce compliance costs and turn compliance threats into business opportunities. We offer a full suite of unclaimed property services designed to help companies ensure full compliance with not only their respective state unclaimed property laws, but federal regulations such as Dodd-Frank and SEC 17Ad-17.

Argent’s Unclaimed Property Reporting Services:

  • Annual Unclaimed Property Reporting & Escheatment Reporting
  • State-Mandated Due Diligence
  • SEC Rule 17Ad-17 Compliance
  • Unmatched Education & Training
  • SEC Rule 17Ad-17 Compliance
  • Unclaimed Property Legislation & Compliance Updates

States are becoming more consistent in their enforcement of compliance laws when it comes to unclaimed property and the escheatment process, viewing it as a valuable source of revenue. As a result, unclaimed property audits are more prevalent now than ever before. It’s imperative that companies conduct their unclaimed property reporting correctly and that they are in full compliance with all applicable regulations.

Most state estimates suggest that only 15 to 35 percent of companies have fully achieved unclaimed property compliance, and even those who are in compliance technically may be underreporting because they aren’t correctly interpreting what the state escheatment laws require. Those found to be out of compliance are subject to significant penalties – typically 12 percent of the underreported liability, including interest.

Argent understands the ramifications of an unclaimed property audit – and the associated penalties that go along with one. We leverage the expertise and experience of our staff to ensure unclaimed property compliance moving forward. By taking responsibility and establishing a sound unclaimed property reporting process, your organization will be better able to ensure it is capable of reducing liability, meeting reporting deadlines, and remaining compliant throughout the year – which could save your company both resources and money in the long run.

Annual Unclaimed Property Reporting & Escheat Reporting

If you’ve been charged with the responsibility of escheatment reporting, you know the process is anything but simple. With 55 domestic reporting jurisdictions – and little uniformity from one to the next – it can be a daunting task for companies to handle their unclaimed property reporting processes in-house. For example, some jurisdictions require reports in the fall – others want them in the spring. Dormancy periods vary by property type and which jurisdiction you’re reporting to. Furthermore, unclaimed property laws are constantly changing. Argent’s escheat reporting service is a cost-effective means of ensuring compliance and reporting unclaimed property accurately year after year.

Many organizations realize the tremendous value in outsourcing their annual unclaimed property and escheat reporting work to Argent – and yours can too. Our team of highly qualified specialists will help you successfully navigate the path to compliance with each jurisdiction to which you must submit a report.  Reporting unclaimed property can be a complex procedure. With Argent Firm, the reporting process doesn’t have to be.

Argent’s escheat services specialists will manage the reporting process to all applicable jurisdictions. Our escheat compliance solutions will enable your organization to conduct compliant and accurate required mailings and file reports on time, each and every time.

For each escheat reporting cycle a dedicated reporting coordinator will manage the entire process, beginning with a preliminary analysis of your potential unclaimed property liability. Backed by our team of experienced consultants – attorneys and certified public accountants with decades of experience on both sides of state audits – we will work to identify any allowable abandoned property exemptions to reduce your liability and enhance your cost savings.

The Argent staff will then process all state required due-diligence mailings and determine the final scope of your unclaimed property reports. Final reports are then generated and submitted to the respective states based on their individual requirements and expectations. At the conclusion of the process, our specialists prepare a filing position which contains a detailed report outlining current and future escheat reporting obligations – including any amounts that are past due – and a suggested strategy for addressing future compliance. Your reporting coordinator will answer any questions you may have throughout the cycle and keep you involved through every step in the process.

The annual unclaimed property reporting process can be difficult, cumbersome, and time-consuming – but it doesn’t have to be. By partnering with Argent for annual escheat reporting and escheatment services your organization will be more empowered to address unclaimed property laws and regulations efficiently and effectively knowing that you’re backed by the undisputed leaders in the unclaimed property industry.

  • Ensure your annual unclaimed property reports are filed accurately, avoiding costly unclaimed property audits.
  • Tap into the people, processes, and technology we have assembled to manage annual escheat compliance reporting – including issuance of checks to states and property owners.
  • Receive an accurate data analysis to ensure you do not over-report your obligations.
  • Leverage our extensive system of quality controls.
  • Free your internal resources for other activities that are more strategic to your business.

If you would like additional information on the escheat reporting process and the basics of unclaimed property reporting, Argent has prepared a brief 20-minute webinar presentation hosted by Chief Financial Officer Michael A. Mische that is available to view for free here on our website. We invite you to view the webinar if you are unfamiliar with the process, or just need a refresher course.

State-Mandated Due Diligence

Because unclaimed property due diligence processes vary both by state and property type, creating and maintaining an effective process for managing it isn’t easy. There are currently 55 escheat reporting jurisdictions and more than 100 types of unclaimed property, including uncashed vendor and payroll checks, escrow balances, accounts receivable credit balances, overpayments, unidentified remittances, unredeemed gift cards, rebates, health and welfare plans, self-insured benefit plan payments, stocks, bonds and dividends.

Argent provides comprehensive outsourced unclaimed property due diligence services that allow your staff to focus on the business of keeping your company running. As part of our services, we address the complex and continually evolving state requirements. From setup, merging, formatting, and mailing the required due diligence letters to telephone follow-up and returns processing, we handle it all. In addition to helping your company with each state’s mandatory letter campaign required at the end of a dormancy period, our team will help you put the processes in place for ongoing unclaimed property management.

Most states include a requirement to perform unclaimed property due diligence mailings after the dormancy period has been met – usually three to five years after the payment or credit was originally generated. These letters are simply a notification to the owner that their property is in danger of escheating to the state of last known residence.

However, by performing your own owner outreach program or research much earlier in the process (for example, when checks have been outstanding for six months), you stand a better chance of locating the owner and reuniting them with their funds. This in turn creates less dormant property and helps you save money on both returned mail and servicing inactive accounts and property.

That’s where Argent’s services become invaluable in helping your company with its unclaimed property management. At Argent, we know the system, including the various ways to find lost shareholders, how to handle large-scale mailings, and when to meet special requests regarding delivery methods, such as certified mailings. Our programs for unclaimed property due diligence save you money and resources, and helps keep your records organized when it comes time to file annual unclaimed property reports

SEC Rule 17Ad-17 Compliance

Argent is a premier provider of SEC Rule 17Ad-17 compliance services to business entities and mutual fund transfer agents. Due to the changes arising from the Dodd-Frank regulations, we also assist brokerage firms in compliance with this function. We have been the cornerstone of the industry even before the requirement was first created in 1997, providing searches for millions of lost or “missing” shareholders.

The Dodd-Frank Act of 2010 directed the SEC to modify Rule 17Ad-17 governing the treatment of missing security holders. As of January 2014, the Rule now applies to the Brokerage industry. Brokers/dealers are required to search for lost security holders using a process similar to the one that stock and mutual fund transfer agents have been required to follow for more than a decade.

New Search Requirements for Brokers

The SEC re-titled 17Ad-17 “Lost Securityholders and Unresponsive Payees” The general industry practices for handling lost security holders under Rule 17Ad-17 are:

  • Conduct up to two database searches in an attempt to locate missing security holders. The first search must take place between 3 and 12 months of the account being coded as missing. The second search (if necessary) must be conducted between 6 and 12 months of the first.
  • Exclude accounts if: a) the value is less than $25.00, b) the owner is deceased, or c) the owner is not a natural person (i.e. a corporation, trust, or partnership).
  • Send first class mail to the newly located address to notify the security holder of the situation and to obtain his or her consent to update the account with the correct address.

New Rules for Handling Uncashed Checks

Dodd-Frank also proposed new rules that will change the way all paying agents handle uncashed checks. A “Paying agent” is defined as any issuer, transfer agent, broker, dealer, investment adviser, indenture trustee, custodian, or any other person that accepts payments from an issuer of securities and distributes payments to security holders.

Specific requirements are:

  • Security holders must be considered an “unresponsive payee” if a check sent to them remains uncashed for 6 months (or until the next regularly scheduled check is sent).
  • Written notification regarding the “unresponsive payee” status must be provided to the security holder no later than 7 months after the check in question was originally sent. The notification may be sent along with a subsequent check or some other mailing, provided that the notice occurs within the seven month window.
  • The notification requirements do not apply if the check is worth less than $25.

Unparalleled Education & Training

Argent offers a variety of both free and fee-based escheatment training & educational programs where you can learn how to effectively manage the unclaimed property reporting process. From in-house training and annual education summits to regional roundtables and real-time legislative alert emails, we offer you information on the latest regulatory changes, current best practices, and strategies for effectively optimizing internal policies and procedures.

With 55 jurisdictions and increasing state and federal regulations, the escheatment reporting process is notoriously complex and constantly evolving. Unless your role is totally dedicated to unclaimed property compliance, staying ahead of the continually changing rules is virtually impossible. Yet, in this environment of heightened enforcement and risk of audit, ignorance simply isn’t a viable option. Thankfully, Argent provides escheatment training in various ways, so you can choose the method that best suits your company’s needs.

Custom Education and Training Programs

Clients routinely call upon us to design and deliver custom programs to build employees’ knowledge and skills. We can craft programs for all levels of employees – from junior accounting personnel to executive managers. Conducted in person or online, these programs help ensure that all relevant employees have a working knowledge of escheat compliance requirements.

Speaking Engagements

Knowledgeable and passionate about unclaimed property law, Argent’s specialists are available for speaking engagements on-site or via web seminars.

Contact us to learn more and for availability.

Regional Meetings

Argent hosts complimentary unclaimed property forums in cities across the country. During these meetings, attendees engage in discussion about industry updates, policy changes, compliance challenges and solutions, audit activity, and preparations for the upcoming escheat reporting season. These seminars are an excellent way to spend a few hours with our unclaimed property specialists and receive escheatment training.

Click here to view our upcoming Regional Events Calendar.

Publications

Our unclaimed property experts routinely contribute to scholarly articles and other thought leadership publications. In addition, we publish TAFnotes®, a periodic review and analysis of new laws and policies, the latest trends, and emerging opportunities within the realm of unclaimed property. This publication and its archives are available free of charge on the web. We invite you to register for TAFnotes®. By registering to receive TAFnotes®, you’ll also receive real-time legislative alerts via email, keeping you and your team up to date on breaking news that impacts the escheatment process.