WASHINGTON – The e-mail or letter looks official, and it contains an attention-grabbing message: The state is holding on to your unclaimed property, which may be worth hundreds of thousands of dollars. All you have to do is pay a fee upfront or provide your personal information and the money is yours.
But the letters and e-mails are the work of scammers, not state officials. A growing number of people across the country are receiving these messages and some are falling for them, losing thousands of dollars or becoming victims of identity theft in the process.
"These scams are just rampant," said David Milby of the National Association of Unclaimed Property Administrators (NAUPA), which represents state unclaimed property programs. "The e-mail from the public we've been getting about this has increased tenfold in the past year."
Some scammers pretend they work for NAUPA and have even use its letterhead to make their pitch.
Besides costing victims money, consumer advocates say this kind of fraud diminishes public trust in state agencies that handle unclaimed property and makes it harder for them to do their jobs.
Unclaimed property is cash or other assets considered lost or abandoned when an owner can't be found after a certain period of time. It includes dormant savings accounts, life insurance payments, death benefits, uncashed utility dividends and the contents of abandoned safe deposit boxes.
There is plenty of it. In 2015, unclaimed property agencies in the U.S. collected $7.8 billion and returned $3.2 billion to rightful owners, according to NAUPA. At last count in 2013, states were holding on to $43 billion in unclaimed property.
The treasurer, comptroller or auditor of each state maintains a list of abandoned property and runs an online database that anyone can search by name for free. Forty states and the District of Columbia provide that information to a NAUPA-endorsed national website that can be searched.
But fraudsters don't bother reviewing or collecting that data. They simply contact people at random, using e-mail, letters or phone calls, hoping to snare a victim.
The scams play on the idea that people are simply getting back assets they're owed.
"There's an air of legitimacy to them," said John Breyault, a vice president at the National Consumers League. "People think it's their money."
Banks, insurance companies and other businesses are required by law to turn over assets from abandoned accounts to state unclaimed property agencies. Often, they haven't heard from the owners or can't get in touch with them over a period of time. Some people may have forgotten about the account, moved, changed their name or died.
The state agencies hold the funds indefinitely. The only exception is the contents of abandoned safe deposit boxes, which are often too unwieldy to store. Many officials use auctions to sell off the property. Purple Hearts and other medals are excluded. States add the auction proceeds to the pot of unclaimed assets. Owners who come forward later can still collect.
NAUPA's Milby said states try hard to connect people with their lost assets. Some send staffers to special events or set up kiosks in malls; some use social media, radio and TV; some take out special section ads in newspapers.
People who want to collect abandoned property can file a claim for free. But some legitimate businesses, called finders or locaters, comb through state unclaimed property data, and track down the owners. The companies charge a fee or a percentage of the total value, which states often cap.
