New York pockets millions in unclaimed funds; critics say reforms are needed
$560 million went unclaimed in fiscal 2021-2022, according to the New York State comptroller's office. Credit: Getty Images/ATU Images
New York will sweep about a half-billion dollars of unclaimed funds into the state’s piggy bank this year even as critics say policy changes could return hundreds of millions of dollars more to their rightful owners.
Since 1943, about $18 billion in unclaimed funds have been moved into general fund coffers, where it is used for state programs, according to the state comptroller’s office. In fiscal year 2021-2022, the state paid owners $404 million — a 41% return rate — out of $980 million in unclaimed funds collected. The general fund got $560 million — equal to almost $30 for every person in the state — with administrative expenses accounting for the remainder.
What are unclaimed funds? They can come from a variety of places: a heating oil refund when a resident moves, a forgotten bank account, an unredeemed insurance policy, a misplaced mutual fund account, an uncollected paycheck, an unspent gift card. After a dormancy period, New York companies that hold these accounts on their books are required to turn them over to the comptroller’s office.
Is New York State swiping unclaimed funds from its residents? Not exactly.
Comptroller Thomas DiNapoli has vowed that the state would pay every penny of that $18 billion it holds should all those people or their heirs suddenly materialize and place valid claims. At the same time, policy experts say, the state fully understands that under the current structure, where owners must search to see if they have unclaimed funds — and the state's online database hides small accounts and some larger accounts fall off the database after five years — just a fraction of the funds will be claimed in any given year.
In short, although the state regularly publicizes a website where New Yorkers can search for their money, it is a safe bet to sweep hundreds of millions of dollars into the general fund each year, as required by state law, without fear that claims will outpace new funds entering the system.
Critics say that New York’s system — which does not list accounts under $20 online and deletes listings of accounts worth under $50 after 60 months — has fallen behind other states like Illinois, Wisconsin, Oregon, Rhode Island and Louisiana.
Those states, in addition to running searchable unclaimed funds databases like New York, have taken the lead in creating programs to proactively send out checks when they can match unclaimed funds with their owners.
One policy expert at Reinvent Albany said the large pool of money that flows to the general fund gives states such as New York scant incentive to enact reforms despite the example of proactive programs elsewhere.
"It is always good for New York government to be looking at best practices in other states, particularly with regard to removing unnecessary barriers to accessing state programs," said Rachael Fauss, senior policy advisor for the nonpartisan government watchdog. “New York should study these proactive approaches to unclaimed funds to see how this model could be adapted and applied for New Yorkers, particularly those who have the most barriers to accessing their funds."
In 2015, the Wisconsin Department of Revenue took over that state’s unclaimed property program and launched the nation’s first system to automatically match accounts with their owners by integrating it into its tax-processing operation.
“That first year, our return rate was over 92% because we were matching against the entire inventory of unclaimed property records in our database,” Erin Egan, director of the bureau of tax operations at Wisconsin’s Department of Revenue, said in an email. “We've averaged 64.5% from 2016-2021. We're pretty proud of that considering we only have six employees.” That compares to 150 employees in New York's unclaimed funds program.
In 2017, Rhode Island became the second state to automatically reunite funds with residents with known addresses. In prior years, "every owner had to check the state's database and submit a claim," said Michelle Moreno-Silva, a spokeswoman for the Rhode Island general treasurer's office.
In May 2022, Illinois state treasurer Michael Frerichs announced the state had paid 1 million claims through a proactive program that matches identifying information of some unclaimed property owners and automatically sends them a check. In fiscal year 2022, Illinois returned unclaimed property worth $280.9 million out of $453 million sent to the unclaimed property program that year, according to the treasurer's annual report, a return rate of 62%.
“We had the idea that we can’t just wait for people to go to our website,” he said. “We should be more active.”
In 2018, Louisiana’s Treasury Department, which administers that state’s unclaimed property program, partnered with the state’s Department of Revenue to share databases. The Treasury Department said the program increased the number of checks issued almost fivefold and cut administrative costs per check by 80%.
New York has a fledgling program to send alert letters, but not checks, automatically to owners of newly arrived unclaimed funds. But the 112,362 mailings last year resulted in payments of about $11 million — less than 3% of the total remitted to account holders in 2021-2022.
About 85% of New York’s claims are processed online, about 10% by mail and about 5% by phone, with in-person outreach events and telethons credited with spurring residents to file claims.
Although online claims dominate, mail and phone inquiries — or an in-person visit at an outreach event —are the only way to bring to light accounts under $20 that are not listed on the public database or accounts from $20-$50 that have been deleted from the database after 60 months. Amounts over $50 continue to be listed even after the 60-month cutoff.
A spokesperson said that an upcoming computer upgrade could improve the unclaimed funds program’s ability to match accounts with owners, but that access to databases overseen by the Department of Taxation and Finance —and changes to the unclaimed property law — also would be required for a full rollout.
New York's Office of Unclaimed Funds also objected to judging the program’s effectiveness based on a return rate percentage because the funds returned in a particular year may have been received in previous years. The proportion of claims paid compared to funds transferred to the general fund, however, has remained roughly constant in recent years.
In 2020-2021, $400 million was paid in claims and $572 million was transferred to the general fund, according to state data, while in 2019-2020, $415 million was paid in claims and $445 million flowed into the general fund.
“We are open to improvements to the current law by the legislature, monitor what other states are doing and routinely meet with other states to share ideas, but what works for one state, may not work for another,” Mary Mueller, a spokesperson for the comptroller, said in a statement.
For citizen activist Ron Lizzi, who has testified multiple times before the Connecticut General Assembly on the topic, unclaimed property programs have become a personal crusade dating back about seven years when it dawned on him that the funds were flowing into that state’s coffers.
“What I found out over time is this program does not work as it’s portrayed,” said the former software engineer. “The state likes to say this money is lost. Lost implies that the state is helpless unless a person steps up to make a claim.”
He likens the system to an animal shelter that neglects to alert owners even though it houses stray dogs tagged with contact information of their homes.
In reality, Lizzi said, the money "is being sent into the general fund and it’s being spent. Things are not as they appear.”
While someone who finds a wallet may be obligated to return it to its owner, disingenuous states itching to sweep the cash into their general funds “are not living up to that standard” when it comes to unclaimed property, he said.
“They are not treating unclaimed property as a problem to be solved,” Lizzi said. “They’re treating it as revenue.” Meanwhile, the owners of unclaimed property “get robbed, but they don’t know it.”
Aside from the structure of the program, Lizzi faults the basic search function of New York’s unclaimed funds program as deficient and recommends that those who seek unclaimed funds use the state’s advanced search function (click on Advanced Search at bit.ly/470aaYm) or go to missingmoney.com, a nationwide site backed by the National Association of Unclaimed Property Administrators.
He theorizes that reforms to New York’s system such as revealing small accounts and automatically sending out checks could return “hundreds of millions of dollars” to account holders.
Owners of unclaimed funds include not only individuals, but businesses, not-for-profits and local governments as well.
In February, for instance, Nassau County announced that it had recouped more than $93,000 by searching the unclaimed property web site of the state comptroller.
As of May, the comptroller’s office listed accounts worth almost $900 million for Long Island alone: 756,555 unclaimed accounts worth $509,702,274 for Nassau County and 704,568 accounts valued at $377,528,336 for Suffolk. The accounts are sorted by county based on the addresses of the listed owners.
Jeremy Dawson, director of the unclaimed property administrators' association, defended states that don’t list small accounts on their websites.
“The rationale is the majority of people don’t claim these properties,” he said. “States have found people don’t fill out forms below a certain threshold.”
Dawson said the sums in unclaimed properties programs are relatively trivial and called it a “misconception” to think that states have a disincentive to investigate more efficient ways to return unclaimed funds to their owners. In any case, he said that money diverted to governments is “used for the public good.”
He also hailed publicity efforts, such as National Unclaimed Property Day on Feb. 1, to inspire the public to search their state websites.
New York will sweep about a half-billion dollars of unclaimed funds into the state’s piggy bank this year even as critics say policy changes could return hundreds of millions of dollars more to their rightful owners.
Since 1943, about $18 billion in unclaimed funds have been moved into general fund coffers, where it is used for state programs, according to the state comptroller’s office. In fiscal year 2021-2022, the state paid owners $404 million — a 41% return rate — out of $980 million in unclaimed funds collected. The general fund got $560 million — equal to almost $30 for every person in the state — with administrative expenses accounting for the remainder.
What are unclaimed funds? They can come from a variety of places: a heating oil refund when a resident moves, a forgotten bank account, an unredeemed insurance policy, a misplaced mutual fund account, an uncollected paycheck, an unspent gift card. After a dormancy period, New York companies that hold these accounts on their books are required to turn them over to the comptroller’s office.
Is New York State swiping unclaimed funds from its residents? Not exactly.
WHAT TO KNOW
- Each year, New York State sweeps hundreds of millions of dollars in unclaimed funds into its general fund, to be spent on state programs.
- Of unclaimed funds the state received in the last fiscal year, the state paid owners $404 million and pocketed $560 million.
- Critics say the state should adopt more proactive methods to get the funds back to their rightful owners, as other states have.
Comptroller Thomas DiNapoli has vowed that the state would pay every penny of that $18 billion it holds should all those people or their heirs suddenly materialize and place valid claims. At the same time, policy experts say, the state fully understands that under the current structure, where owners must search to see if they have unclaimed funds — and the state's online database hides small accounts and some larger accounts fall off the database after five years — just a fraction of the funds will be claimed in any given year.
In short, although the state regularly publicizes a website where New Yorkers can search for their money, it is a safe bet to sweep hundreds of millions of dollars into the general fund each year, as required by state law, without fear that claims will outpace new funds entering the system.
Searchable database not enough?
Critics say that New York’s system — which does not list accounts under $20 online and deletes listings of accounts worth under $50 after 60 months — has fallen behind other states like Illinois, Wisconsin, Oregon, Rhode Island and Louisiana.
Those states, in addition to running searchable unclaimed funds databases like New York, have taken the lead in creating programs to proactively send out checks when they can match unclaimed funds with their owners.
One policy expert at Reinvent Albany said the large pool of money that flows to the general fund gives states such as New York scant incentive to enact reforms despite the example of proactive programs elsewhere.
New York should study these proactive approaches to unclaimed funds to see how this model could be adapted and applied for New Yorkers.
—Rachael Fauss, senior policy advisor at Reinvent Albany
"It is always good for New York government to be looking at best practices in other states, particularly with regard to removing unnecessary barriers to accessing state programs," said Rachael Fauss, senior policy advisor for the nonpartisan government watchdog. “New York should study these proactive approaches to unclaimed funds to see how this model could be adapted and applied for New Yorkers, particularly those who have the most barriers to accessing their funds."
Wisconsin's 92% return rate
In 2015, the Wisconsin Department of Revenue took over that state’s unclaimed property program and launched the nation’s first system to automatically match accounts with their owners by integrating it into its tax-processing operation.
“That first year, our return rate was over 92% because we were matching against the entire inventory of unclaimed property records in our database,” Erin Egan, director of the bureau of tax operations at Wisconsin’s Department of Revenue, said in an email. “We've averaged 64.5% from 2016-2021. We're pretty proud of that considering we only have six employees.” That compares to 150 employees in New York's unclaimed funds program.
In 2017, Rhode Island became the second state to automatically reunite funds with residents with known addresses. In prior years, "every owner had to check the state's database and submit a claim," said Michelle Moreno-Silva, a spokeswoman for the Rhode Island general treasurer's office.
In May 2022, Illinois state treasurer Michael Frerichs announced the state had paid 1 million claims through a proactive program that matches identifying information of some unclaimed property owners and automatically sends them a check. In fiscal year 2022, Illinois returned unclaimed property worth $280.9 million out of $453 million sent to the unclaimed property program that year, according to the treasurer's annual report, a return rate of 62%.
“We had the idea that we can’t just wait for people to go to our website,” he said. “We should be more active.”
In 2018, Louisiana’s Treasury Department, which administers that state’s unclaimed property program, partnered with the state’s Department of Revenue to share databases. The Treasury Department said the program increased the number of checks issued almost fivefold and cut administrative costs per check by 80%.
New York sending alert letters
New York has a fledgling program to send alert letters, but not checks, automatically to owners of newly arrived unclaimed funds. But the 112,362 mailings last year resulted in payments of about $11 million — less than 3% of the total remitted to account holders in 2021-2022.
About 85% of New York’s claims are processed online, about 10% by mail and about 5% by phone, with in-person outreach events and telethons credited with spurring residents to file claims.
Although online claims dominate, mail and phone inquiries — or an in-person visit at an outreach event —are the only way to bring to light accounts under $20 that are not listed on the public database or accounts from $20-$50 that have been deleted from the database after 60 months. Amounts over $50 continue to be listed even after the 60-month cutoff.
Law update needed for some changes
A spokesperson said that an upcoming computer upgrade could improve the unclaimed funds program’s ability to match accounts with owners, but that access to databases overseen by the Department of Taxation and Finance —and changes to the unclaimed property law — also would be required for a full rollout.
New York's Office of Unclaimed Funds also objected to judging the program’s effectiveness based on a return rate percentage because the funds returned in a particular year may have been received in previous years. The proportion of claims paid compared to funds transferred to the general fund, however, has remained roughly constant in recent years.
In 2020-2021, $400 million was paid in claims and $572 million was transferred to the general fund, according to state data, while in 2019-2020, $415 million was paid in claims and $445 million flowed into the general fund.
“We are open to improvements to the current law by the legislature, monitor what other states are doing and routinely meet with other states to share ideas, but what works for one state, may not work for another,” Mary Mueller, a spokesperson for the comptroller, said in a statement.
A personal crusade
For citizen activist Ron Lizzi, who has testified multiple times before the Connecticut General Assembly on the topic, unclaimed property programs have become a personal crusade dating back about seven years when it dawned on him that the funds were flowing into that state’s coffers.
“What I found out over time is this program does not work as it’s portrayed,” said the former software engineer. “The state likes to say this money is lost. Lost implies that the state is helpless unless a person steps up to make a claim.”
He likens the system to an animal shelter that neglects to alert owners even though it houses stray dogs tagged with contact information of their homes.
In reality, Lizzi said, the money "is being sent into the general fund and it’s being spent. Things are not as they appear.”
While someone who finds a wallet may be obligated to return it to its owner, disingenuous states itching to sweep the cash into their general funds “are not living up to that standard” when it comes to unclaimed property, he said.
They are not treating unclaimed property as a problem to be solved. They’re treating it as revenue.
— Connecticut activist Ron Lizzi
“They are not treating unclaimed property as a problem to be solved,” Lizzi said. “They’re treating it as revenue.” Meanwhile, the owners of unclaimed property “get robbed, but they don’t know it.”
Aside from the structure of the program, Lizzi faults the basic search function of New York’s unclaimed funds program as deficient and recommends that those who seek unclaimed funds use the state’s advanced search function (click on Advanced Search at bit.ly/470aaYm) or go to missingmoney.com, a nationwide site backed by the National Association of Unclaimed Property Administrators.
He theorizes that reforms to New York’s system such as revealing small accounts and automatically sending out checks could return “hundreds of millions of dollars” to account holders.
Businesses, governments also affected
Owners of unclaimed funds include not only individuals, but businesses, not-for-profits and local governments as well.
In February, for instance, Nassau County announced that it had recouped more than $93,000 by searching the unclaimed property web site of the state comptroller.
New York State Comptroller Thomas DiNapoli, left, Town of Hempstead Deputy Supervisor and Senior Councilwoman Dorothy L. Goosby and Gerry Geist, executive director of the New York State Association of Towns, with a $67,765.40 check in unclaimed funds presented to the Town of Hempstead in February. Credit: NYS Comptroller’s Office
As of May, the comptroller’s office listed accounts worth almost $900 million for Long Island alone: 756,555 unclaimed accounts worth $509,702,274 for Nassau County and 704,568 accounts valued at $377,528,336 for Suffolk. The accounts are sorted by county based on the addresses of the listed owners.
Jeremy Dawson, director of the unclaimed property administrators' association, defended states that don’t list small accounts on their websites.
“The rationale is the majority of people don’t claim these properties,” he said. “States have found people don’t fill out forms below a certain threshold.”
Dawson said the sums in unclaimed properties programs are relatively trivial and called it a “misconception” to think that states have a disincentive to investigate more efficient ways to return unclaimed funds to their owners. In any case, he said that money diverted to governments is “used for the public good.”
He also hailed publicity efforts, such as National Unclaimed Property Day on Feb. 1, to inspire the public to search their state websites.
Find your unclaimed funds from New York State, the IRS and beyond
Pro tips: Search using the person's full legal name as well as nicknames, maiden names and spelling variations that might have been used on accounts. Some states, including New York, encourage friends and family to search the web on behalf of others. The state's new "share" feature lets searchers send an email direct to a potential claimant.
- New York State Comptroller's Office: osc.state.ny.us/unclaimed-funds or 1-800-221-9311; for wildcard searches with a partial name, click on the Advanced Search option. To see if you have unclaimed accounts not listed in the database, the site has instructions (osc.state.ny.us/unclaimed-funds/claimants/claims-individuals) for those who want to file a claim by mail (Office of the State Comptroller, Office of Unclaimed Funds, 110 State Street, Albany, New York 12236) or telephone. Such requests may unearth accounts under $20 as well as additional accounts not listed on the web site.
- National Association of Unclaimed Property Administrators: For out-of-state searches or an alternative to New York State's system, unclaimed.org/search/
- U.S. Treasury: For misplaced Savings Bonds and other Treasury securities, treasurydirect.gov/savings-bonds/treasury-hunt/
- IRS: Determined treasure hunters can create an ID.me account here; it can help in finding 1099 forms that could lead to lost payments from things like bank interest, security dividends and freelance income, bit.ly/3QAnH0F
Ken Schachter covers corporate news, including technology and aerospace, and other business topics for Newsday. He has also worked at The Miami Herald and The Jerusalem Post.
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