If you have ever had a child wait until the night before an assignment is due to ask for help, or had a client push a deadline as far back as possible to start, you know the frustration of rushed and ineffective project completion. With your unclaimed property reporting process, you can reduce this last-minute shuffle and streamline your reporting – in some cases even reduce the number of unclaimed records before it is even time for escheatment!
By effectively utilizing the Due Diligence and Pre-escheat processes, companies can clear out dormant items. The sooner the owner is contacted, the more likely they are to respond, and take back their property before you have to remit it to the states! Companies that effectively stay in touch with their property owners turn a potential liability (unclaimed property reporting and escheatment to the states) into a positive interaction and a potential revenue source if the property owner is a customer they can win back. Colleges can stay in touch with their alumni to keep their numbers up for fundraisers, non-profits can keep tabs on former donors to make sure their marketing is effective, and financial institutions may be able to resume service for a customer after the positive interaction of returning their lost property to them.
These timely communications can take the form of either “customer service” or “due diligence” letters- but what is the difference? According to the states, a letter only counts as “due diligence” when it is sent within that states’ required due diligence timeframe. What is much more effective at reaching property owners however are “customer service” letters that can be sent any time- multiple times if necessary- in order for a company to actually get a response from the property owner and pay out that property to avoid escheating it to the state. While customer service letters alone will not fulfill the state requirements, utilizing both customer service letters (sent as soon as a property becomes dormant) and true due diligence letters (sent within the state’s due diligence letter timeframe) has proven very effective for companies to reduce the number of properties escheated to the states, and stay in compliance for those properties they do send in. Staying on top of customer service letters throughout the year will help reduce the number of proper due diligence records, and ultimately the number of unclaimed property records to report each year.
Set a standard process for your company’s Due Diligence and Customer Service letter campaigns throughout the year and you will be well ahead of the escheatment game. For unclaimed property waiting until the last minute does not pay, but being proactive and utilizing customer service contacts can pay dividends!
Contact Sovos to learn more about unclaimed property solutions.