Posted on Wednesday, 1st February 2012 by Keane Unclaimed Property Team

Continuing a nationwide trend, South Dakota recently introduced legislation that would reduce the dormancy periods for unclaimed property from five to three years. Specifically, South Dakota’s HB 1270 would decrease the dormancy periods for the following types of unclaimed property:

• Money Orders
• Any sum payable on a check, draft, or similar instrument
• All Banking Property
• All Life Insurance Property (from 4 years)
• All Securities Property Types
• All property held by a fiduciary including IRA property
• Gift certificates and credit memos
• Any tangible and intangible property held in a safe deposit box
• All other property not specifically addressed in the South Dakota’s unclaimed property law

Posted on Friday, 6th January 2012 by Keane Unclaimed Property Team

On January 5, 2012, the United States Court of Appeals for the Third Circuit issued its opinion in the case of New Jersey Retail Merchants Association v. Sidamon-Eristoff which concerns several plaintiffs’ challenges against NJ A3002, the bill passed on June 30, 2010.  The bill featured major changes to New Jersey’s approach to unclaimed gift certificates, stored value cards, and gift card escheatment; beginning with the requirement that they be reported, which was previously not the case in New Jersey.  Also, holders were to record the zip code of gift card purchasers and, if the address of the purchaser was unknown, holders were to report those cards to New Jersey on the basis of a “place of purchase” presumption.

As previously discussed here, Keane had described how the District Court in New Jersey held that the “place of purchase” presumption ran afoul of the priority rules outlined in the United States Supreme Court opinion of Texas v. New Jersey and granted the plaintiffs’ motion for a preliminary injunction, and now the Third Circuit has affirmed that decision of the District Court.

While the Third Circuit agreed with the District Court that the “place of purchase” presumption was invalid, the Third Circuit upheld New Jersey’s right to require holders to collect zip codes from gift card purchasers.  The District Court had granted the preliminary injunction against the zip code collection requirement, also referred to as the data collection requirement, on the basis that its only purpose was to facilitate the escheatment of gift cards pursuant to the “place of purchase” presumption.  The Third Circuit held that the zip code collection requirement was severable from the “place of purchase” presumption.  The Third Circuit stated that this data collection is consistent with the Supreme Court holdings in Texas v. New Jersey and other decisions because those decisions have consistently allowed for states to escheat pursuant to the last known address of the purchaser.  The opinion of the Third Circuit is vague as to whether or not the Third Circuit considered a zip code as solely sufficient to establish an address to report unclaimed property under the first priority rule in Texas v. New Jersey.

Read More »

Posted on Thursday, 16th December 2010 by Keane Unclaimed Property Team

WINTER 2011 (Current through 12/13/10)

Gift Card Escheatment Regulations

CALIFORNIA GIFT CARD ESCHEATMENT
SB 885
Introduced 1/19/2010, Passed 8/25/2010, Vetoed by Governor 9/24/2010
This bill would require that a gift certificate with a cash value of less than $10 be redeemable in cash for its cash value, and would require that a gift certificate contain a statement to that effect. This bill would also delete the exceptions to the prohibition on the sale of a gift certificate that contains a dormancy fee. Read More »

Posted on Wednesday, 10th November 2010 by Keane Unclaimed Property Team

As state budget deficits continue to grow so does the topic of unclaimed property. Today, more and more businesses and financial institutions are reporting large amounts in abandoned property, much of which will eventually go to the state treasury instead of its rightful owner.

Here at Keane Unclaimed Property, our main objective is to provide corporate compliance and risk management solutions to corporations, mutual funds and financial institutions. However, we’re also dedicated to helping consumers who are the customers, shareholders and employees of those firms.

In a recent Kansas City Star article titled “States Have Millions in Unclaimed Property”, Debbie Zumoff, Vice President and Chief Compliance Officer at Keane Unclaimed Property, mentions that “consumers need to understand the importance of demonstrating activity in their accounts.” Read More »

Posted on Thursday, 4th November 2010 by Keane Unclaimed Property Team

With reporting deadlines occurring at the end of this month, we are constantly keeping abreast of issues involving unclaimed property and dormant accounts—even ones occurring outside the United States. A recent article caught our attention from CaymanNewsService titled “Law fundamentally ‘flawed’” as it raised some unclaimed property law issues that have and continue to occur state side. Read More »

Posted on Thursday, 4th November 2010 by Keane Unclaimed Property Team

As you might have guessed, New Jersey’s attempt to collect an additional $79.5 million in revenue per year by revising the Uniform Unclaimed Property Act is causing a legal uproar in Trenton’s federal court. Monday’s article on Law.com which covered the proposed unclaimed property law revision caught our eye, as there are currently three lawsuits contesting that the recent revision is pre-empted by federal law and violates the Constitution’s taking, commerce, contract and due process clauses.

So just what does the law say? On July 1, 2010, New Jersey passed a revision to the Uniform Unclaimed Property law stating that gift cards – which were not previously covered by the unclaimed property act – are presumed abandoned after two years. This includes paper gift certificates and rebates cards. The law also reduces the time to redeem travelers’ checks and money orders from 15 years to three years and seven years to three years, respectively. Finally, the law forbids fees charged on stored value cards and limits the amount of dormancy fees businesses can charge on travelers’ checks.

The lawsuits involve American Express Travel Related Services Company, the New Jersey Retailers Association and the New Jersey Food Council, and are all seeking a preliminary injunction against enforcement of the law. Read More »

Posted on Friday, 8th October 2010 by Keane Unclaimed Property Team

Michigan’s new reporting bill, HB 6421 – introduced on September 8th, was signed into law by the Governor on October 5, 2010.  The details are summarized below:

• General dormancy period from 5 to 3 years.
• Money orders from 7 years to 3 years.
• Any sum payable on a check, draft, or similar instrument from 5 years to 3 years.
• Demand, savings, matured time deposits including any automatically renewable deposits, from 5 to 3 years.
• Trust accounts and accounts under the Gifts to Minors Act, from 15 years to 3 years.
• Funds owed under any life or endowment insurance policy, from 5 to 3 years.
• Gift Cards, from 5 years to 3 years.

Read More »

Posted on Wednesday, 6th October 2010 by Keane Unclaimed Property Team

American Express as well as the New Jersey Retail Merchants Association have targeted a recent law which altered the length of time upon which the state can seize travelers check and unused gift card balances. American Express is concerned with travelers checks and the NJRMA is unhappy with the law’s implications on gift cards.

New Jersey state treasurer, Andrew P. Sidamon-Eristoff, has been hit with two law suits concerning a measure approved back in June of 2010 which was part of the budget recommended by Governor Christie. The budget called for changes to when a travelers check or gift card could be considered as abandoned, resulting in an estimated $80 million for the state. Gift cards alone are estimated to generate $33-55 million.
Read More »

Posted on Monday, 4th October 2010 by Keane Unclaimed Property Team

It’s hard to believe, but the holiday season is only a few months away. According to the National Retail Federation, Americans spent 23.6 billion last holiday season on gift cards alone. That being said, last month new gift card escheatment laws involving unclaimed property and the amount of time consumers have to use gift cards went into effect. While these regulations aim to help consumers, they aren’t crystal clear and leave room for some confusion.

For most states, these new regulations give consumers five years as opposed to one year to use the balance on most gift cards, but they will still have to pay fees for not using them. One major key improvement is that card issuers must wait a year before charging an inactivity fee. However, in a recent Associated Press interview, Laura Lane, vice president of unclaimed property services here at Keane Unclaimed Property, indicated that this could be both good and bad for consumers. Read More »

Posted on Friday, 24th September 2010 by Keane Unclaimed Property Team

Michigan’s new reporting bill, HB 6421 – introduced on September 8th, passed the Senate yesterday, September 23rd, 2010 with a solid vote of 461 to 36. It has been ordered to be enrolled for the Governor’s desk. For your reading convenience, details are summarized below: Read More »