The State of Unclaimed Property

Why should businesses care about unclaimed property?

It’s the law! Every state and the District of Columbia has a law requiring companies to report unclaimed property. Compliance is mandatory and each state is authorized to enforce its laws. The consequences for noncompliance can be severe from interest and penalties to costly unclaimed property audits that can drain a company’s resources. The unclaimed property laws vary by state as no two states have identical laws making compliance challenging. Further complicating matters, the laws, regulations and administrative guidance relating to the identification and reporting of unclaimed property is ever changing. Despite the risk of audits and interest and penalties, the rate of company compliance is shockingly low. It has been estimated by states and audit firms that less than 20% of organizations are in full compliance with UP laws. Companies across numerous industries often don’t know or understand their own UP obligations until they find themselves under audit.

Unclaimed property is a compliance concern often put on the backburner, but it is constantly brought to light by state governments eager to close their growing budget gaps. Through third-party audit firms, states are embracing new technology and enforcement methods to maximize liability. Accordingly, ensuring your organization is fully compliant with UP laws and regulations should be of utmost importance. Ignoring your unclaimed property liabilities can be extremely costly. The best way to keep up to date with the ever change laws and stay in compliance is working with the right partner to create a strategy that will streamline the UP compliance process.