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February 3, 2023

CT unclaimed property fund hits $1.4B, despite $71M returned

YEHYUN KIM / CTMIRROR.ORG Erick Russell, campaigning for state treasurer in November 2022, talks to residents at Southbury town hall.

Connecticut returned $70.7 million in unclaimed property to state residents over the past year, but the often-overlooked program continued to accumulate many millions of dollars more in additional uncashed checks, forgotten savings accounts, unclaimed insurance policies and misplaced refunds.

The Connecticut Treasurer’s Office, which oversees the unclaimed property fund, announced this week that the $70.7 million in financial assets that were reclaimed during the 2022 fiscal year was the most money the program has paid out in its history.

Erick Russell, the newly elected state Treasurer, credited state lawmakers and his predecessor Shawn Wooden for increasing the number of people who were reunited with their money.

“I’m taking office at an exciting time for the program,” Russell said.

But even with the record-setting year in 2022, the state continued to take in cash that belongs to individuals, nonprofits and other entities.

The treasurer’s office reported in December that it collected $183 million in unclaimed property during the 2022 fiscal year. It has now amassed more than $1.4 billion in various financial assets that could be claimed through the program.

The state compiled that money over decades by requiring banks, utilities, insurance companies and other businesses to turn over any assets that have gone untouched for several years. Those companies are forced to hand that money over to the state if they cannot make contact with the owners of those assets.

The primary purpose of the program, which started in the early 1930s, is to reconnect people with their money, but the state has historically not been great about accomplishing that goal.

Any money in the unclaimed property fund that is not quickly claimed by its owner is used either to fund Connecticut’s public campaign finance system or is swept into the legislature’s biennial budget.

But that doesn’t prevent the owners of the remaining unclaimed property from demanding their money back from the state at a later date. The treasurer’s office is on the hook for those debts, whether the state took possession of the money last year or decades ago.

The CT Mirror published an investigation last year that showed how the state seized more than $2.3 billion through the program between 2000 and 2021, and it highlighted how the treasurer’s office returned less than 37% of that money over that 20-year period.

The story also revealed how millions of dollars in assets that were valued at less than $50 were not included on the CT Big List, a state website where people can find and reclaim their missing money.

Officials in the state treasurer’s office initially responded to that story by claiming the CT Mirror had misled the public about the program.

Several weeks later, however, former treasurer Shawn Wooden announced a number of changes to the program to make it easier for people to identify their assets and submit claims for that money.

Wooden, for the first time, posted all of the unclaimed property valued at less than $50 to CT Big List, and he removed an earlier policy that required people to have their claims notarized before they would be accepted by the state.

Those changes and the public attention that was brought to the program last year had huge impacts, according to the most recent statistics that were compiled by the treasurer’s office.

The number of people, nonprofits and other organizations that have money listed on the CT Big List increased dramatically as a result of the lower-value assets being added to the website.

The total number of owners included on that searchable list spiked from roughly 1.1 million during the 2021 fiscal year to more than 9.6 million during the 2022 fiscal year — a direct result of the addition to the list of those owed less than $50, as reported in CT Mirror’s investigation.

A surge in claims

The public spotlight on the program also caused an increase in the number of people who attempted to reclaim their money from the state.

An annual report from the treasurer’s office noted that the unclaimed property program, at its peak, received more than 140,000 claims during the first two weeks of February 2022.

That’s more claims than the state successfully paid out from the 2014 fiscal year through 2021 fiscal year — an 8-year period.

But not all of the claims that were submitted during the past year have been fulfilled.

The statistics for the unclaimed property program make it clear that only a small fraction of the claims that were filed during the 2022 fiscal year resulted in the state reuniting people with their money.

The treasurer’s office said it paid out 24,468 of the roughly 264,000 individual claims it received during the 2022 fiscal year — another record-setting number.

But that means more than 239,000 other claims were still stuck in the pipeline in June 2022, at the end of the fiscal year.

That claims process can be held up for all kinds of reasons, the treasurer’s office told the CT Mirror.

Some of the claims that are submitted are duplicates. Others are never followed up on because the owners learn how much money they are owed and decide the claim isn’t worth their time and effort.

And many are held up because the state requires the filers to submit various paperwork to prove they are the rightful owners of the money.

Waiting in line

Jocelyn Ault and her husband fall into that last category.

The Stratford residents were among the tens of thousands of people who inundated the treasurer’s office with claims last February.

The couple searched the state’s online list of unclaimed property after reading the CT Mirror’s investigation and realized the state had taken control of more than $4,000 that was owed to them.

Ault said she and her husband submitted claims in late February for more than 16 different assets that they believed belonged to them.

And then, they waited patiently.

Ault said they gave the treasurer’s office several months to contact them about their claims, but they grew concerned in August when nothing had materialized.

At that point, they were well past the 90 days that the treasurer’s office says is required to process most claims. 

The couple followed up by calling the treasurer’s office, and only then were they informed that some of their claims required extra paperwork to prove their identities.

Officials with the unclaimed property program asked Ault for her marriage certificate since one of the assets was listed under her maiden name.

And the treasurer’s office instructed Ault’s husband to contact the bank where he had previously opened two savings accounts. The social security numbers on those accounts did not match his own, Ault said, likely because he had opened those accounts for their now-grown children.

Once they received those instructions, Ault said things were delayed even further because the follow-up emails they received from the state were flagged as spam in their inbox. It took Ault several months to learn about that issue, which delayed her from submitting the required paperwork.

Ault admits that the email snafu was her oversight. But she is still frustrated with the current system.

She doesn’t understand, for instance, why an issue with one asset would prevent the state from returning all of the other money that belongs to her.

Only one of the assets she claimed — an uncashed check worth $196 — was listed under her maiden name. Yet that issue has prevented the state from returning an additional $2,989 in back pay, refunds and investments that are listed under her married name.

Many of those assets included the address where Ault has lived for the past three decades.

The program, she argued, should not require so much work on the part of Connecticut residents in cases where the state has the information and the means to identify and locate who the money belongs to.

Missing tools

A significant number states have taken steps in recent years to make it easier for people to cash in on their unclaimed property.

Those states, including Illinois, Louisiana, Delaware, Wisconsin, North Carolina and Rhode Island, have made changes to their laws so officials can locate people on their unclaimed property lists and automatically mail checks to them.

But in Connecticut, the burden still largely falls to individuals and organizations to initiate the process of retrieving their money.

Wooden, who decided not to campaign for a second term as treasurer, tried to change that last year.

He helped promote legislation that would have allowed the treasurer’s office to access state tax information and other governmental data so the treasury staff could find current addresses for people named on the CT Big List. And he asked state lawmakers to authorize his office to automatically mail checks to individuals who could be properly identified.

Lawmakers eventually included some of those requests in an annual budget bill, but before they passed that legislation, they stripped out the requirement for the Department of Revenue Services and other state agencies to share their data with the treasurer.

Wooden’s staff acknowledged that the change likely defeated the purpose of the legislation.

The treasurer’s office is now authorized to mail out checks for unclaimed property that is valued under $2,500, but without access to state tax data, the office is unlikely to locate the correct addresses for the hundreds of people on the CT Big List.

The bill that was passed in 2022 also required the treasurer to send out first class mail notifying anyone who had property added to the CT Big List in the past year and instructing them on how to apply for that money. That piece of the law is supposed to go into effect this year.

But that requirement is also likely to run into a similar problem as the automatic payments.

Without more accurate data, the treasurer is likely to be mailing those notifications to the often-outdated addresses that were used by the banks, utility companies and insurance carriers in the first place, leading them to be turned over to the state.

There are two bills filed this year that would fix that problem by giving the treasurer access to the state tax data it asked for last year. But so far, there are only three sponsors on that legislation — all of them Republican.

Russell, who just finished his first month as treasurer, said he is still becoming acquainted with the unclaimed property program and the legislative changes that were made last year.

But he said he is interested in continuing to improve upon the program so that more people can access their money. That includes advocating at the legislature for the additional tools and assistance that his office needs, he said.

“We’re making a priority of both getting additional staff where we need to in order to help move these claims along,” Russell said. “But I’m also really interested in looking at things like really improving our technology, allowing us to process some of these claims more quickly.”

If the treasurer’s office could automatically issue checks for smaller assets, Russell said, his staff could focus more of their attention on vetting and approving the larger claims, which will continue to require paperwork.

“There still is this kind of backlog and the need to go through these claims, one by one,” Russell said. “I think the technology piece of this will be huge when we’re able to get that implemented.”

Over the past six months, Russell said, the staff in the treasurer’s office has continued to manage a historic number of claims and is on pace to far exceed the 24,000 claims that were paid out in the 2022 fiscal year.

The sheer number of people seeking to access the program, Russell said, shows the value of the program.

“It’s a really important part of my office, and that is not lost on me at all,” Russell said. “It’s why I really want to make this a priority.”

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