I saw your recent item about searching for unclaimed property from the state controller's office. I discovered $980 from an insurance policy from years ago and filed a claim, which is pending. Our friend found a similar insurance payment and filed his claim in February. When he called the controller's office recently to find out when his money might be coming, he was told, "We're working on requests from last November. It'll be a few more months until we get to yours." Egad. Is this possible?
– Janice F., Foresthill
Yep, it's definitely possible. In fact, the state controller's Web site has posted a prominent message warning folks that there may delays, primarily due to a new computer system and the high volume of claims pouring into its office.
But a backlog back to November? That may be pushing it.
"Right now, we're working on claims that came in during February," said Garin Casaleggio, spokesman for the controller's office.
He said the backlog developed because of more aggressive efforts to contact owners of lost accounts and from glitches in replacing an outdated, 20-year-old computer system.
"It's like turning a battleship in a bathtub," said Casaleggio. "We've taken extraordinary steps with the reform process … and now we're working out the kinks with the new system."
Currently, the state controller's office is holding more than $5.1 billion in unclaimed property belonging to some 8.2 million individuals and organizations.
In the last year, in the wake of lawsuits and court injunctions over how account owners were notified, the controller's office has seriously stepped up efforts to reunite that money with its rightful owners.
Between September 2007 and June 2008, the controller's office says it sent out 2.5 million letters to holders of unclaimed property – double the 1.2 million issued in the previous decade.
That's resulted in a corresponding spike in the number of claims, which are up 91 percent from January to June this year, compared with the same time a year ago.
What's "unclaimed property?" It can be anything from a long-lost utility bill refund to an uncashed paycheck from a summer job. It does not include real estate property of any kind.
The most common types of property are bank accounts; contents of safe deposit boxes; stocks, bonds and mutual funds; uncashed cashier's checks or money orders; certificates of deposit (CDs); matured or terminated insurance policies; mineral interests and royalty payments; and trust funds and escrow accounts.
By law, most of these accounts wind up with the state if they've been untouched for more than three years. It's often because the owner forgets about them, moves without leaving a forwarding address or dies, and the heirs are unaware the accounts exist. And sometimes people neglect to answer mail from their financial institutions that would trigger a notice of activity.
There are some exceptions to the three-year rule: If it's a paycheck, it must be turned over to the state after one year. If you have two accounts at the same bank and one is active, the inactive account usually can't be sent to the state.
About 40 percent of most claims – the least complicated – get reviewed and approved within 30 to 60 days. That's for simple items like a lost paycheck or utility bill refund. Checks are issued within one to three weeks after the claim is approved.
More complicated claims – those involving probate, complex ownership or stocks that have had splits, etc. – can take up to 12 months to sort out.
Some have suggested that because of the state's budget crisis the controller's office is holding onto unclaimed payments and collecting interest, rather than releasing the funds.
Asked to comment, Casaleggio responded with "an emphatic no." In fact, he said, "Even when there's no budget in place, unclaimed property payments can still go out. It's one of those programs that's not tied to the budget."
Searching for unclaimed property is as easy as typing your name. Go to the state controller's Web site (www.ClaimIt.ca.gov) or call (800) 992-4647.
You can search for yourself, your friends, your relatives. A recent caller to The Bee said he found accounts for 30 residents of his senior living residence in Davis.
But it's not quite as easy to recoup funds that have been turned over to the state. You must provide verification, such as a photo ID, Social Security number, proof of address, or in some cases, proof of the property, like a stock certificate. This can slow the process.
To avoid that, the controller's office recommends initiating some activity in your accounts.
"Even if it's withdrawing or depositing a dollar once a year – anything to keep that account active," said Casaleggio.
For more tips, see the "Keeping Track" box.
Have a personal finance question? The Bee's Claudia Buck can help you find answers. Reach her at (916) 321-1968 or via The Sacramento Bee; P.O. Box 15779; Sacramento, CA 95852.
