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UP Best Practices

Sharing of best practices as it relates to unclaimed property

Many companies like to report unclaimed property as soon as it shows up as abandoned on their books. I understand the desire to get the records reported to the state and out of your hair, but you may wish to slow down and let those records age.

Why is this important? One reason is that you are not allowing enough time to find your customers and reunite them with their property. If you can contact that customer, it’s likely your business relationship will continue and you’ll benefit from their patronage for some time to come. Another reason is that many states don’t want you to send records early without their express, written permission.

How do you know when the property has aged long enough to be reported to the state? I’ll give you a quick lesson on calculating dormancy. All states have a list in their handbook or somewhere on their website listing each type of property code they will accept and the dormancy value that is assigned to each code. Each state has a cutoff date, also known as the Period End Date that is used to calculate the dormancy.  

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In these modern times, security of sensitive data is at the forefront of everyone’s minds. Clients, vendors, and employees should be able to trust that their sensitive data such as social security numbers and account numbers are safe in your hands. You most likely have protocols in place within your company to maintain data security. If you send paper forms through regular mail to report to the states, then you could compromise the security you’ve tried so hard to ensure along the way.

The format used for electronic reporting results in a NAUPA II file. The NAUPA II file is a text file that places certain information in certain positions in the file according to the NAUPA specifications. It does not provide much security on its own as it is easily opened.

A few years ago, the company that provides the software the states use to open your report files came up with the NAUPA Encryption Utility. This company very graciously shared the encryption with other software vendors so they could incorporate it into their systems. UPExchange has this type of encryption in place. As far as I know, every other unclaimed property reporting software provider has it as well.

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  • test name
    test name says #
    test title
    test comments
  • Danielle Herring
    Danielle Herring says #
    Product Manager, UPExchange
    Thank you for the correction, Melanie!
  • Melanie Wade
    Melanie Wade says #
    Administrative Advisor, Idaho ...
    Danielle, I am happy to report that Idaho does accept encrypted HDE files. We will also accept password protected encrypted files
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States continue to move away from paper reporting in favor of electronic reporting. First, let me describe the true difference between the two types of filings as I know many holders are confused. Paper reporting means you enter all of your owner detail into forms approved by the state. Electronic reporting means you enter your owner detail on a state website or in reporting software, such as UPExchange, that can generate the NAUPA II format as a TXT or HDE file. Don’t get this confused with the cover sheet. No matter which method is used, almost every state still requires a hard copy of the coversheet so they can collect the original signatures that are required.

Some states, such as Tennessee, no longer accept the paper forms even if you have only one record to report. Other states will allow a handful of properties to be reported on paper, but require electronic reporting for larger reports. Virginia, for example, will accept paper forms if you have less than 25 records. Even the states who technically allow you to report small numbers of properties on paper forms would still prefer that you submit them electronically.

Why do the states have a preference? Paper reporting used to be the only method available. This required someone at the holder site to fill out state forms, often using a typewriter! The paper forms would be mailed to the state. When the state received the paper forms, someone on the state’s staff would have to manually enter the data from the paper forms into the state’s reporting system. As you can see, this is very labor intensive on both ends. It also leaves both sides open to clerical errors such as transposing social security numbers.

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  • Sherry Hale
    Sherry Hale says #
    Common Issue
    From a support standpoint, we often receive chats and calls where someone sent in a paper report and had to redo the report electr
  • Barbara Rice
    Barbara Rice says #
    Securing owner information
    Another compelling reason to report electronically is that of data security. When a holder reports their customers'/employees'/cli
  • Danielle Herring
    Danielle Herring says #
    RE:Securing owner information
    Thanks Barbara! Security is definitely a very compelling reason to use electronic reporting.
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Article written By Bill Dadmun, Records and Receipts Manager; State of Virginia

How many of you use the aggregate function when reporting?  Does it make your life easier?  Listen to this scenario and tell me if it sounds familiar.

You get a call from someone that is due $49.95 from a credit balance.  You know based on the time frame that this account has already been reported to the state, so you refer them to the proper state, even providing them with the searchable website and how to submit a claim form.  You have done all of the right things only to get another call within the hour.  This time, the customer is mad, because the state says they cannot locate any property in their name, in particular not from your company.  “What is the problem with them!?!” You think to yourself.

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  • Danielle Herring
    Danielle Herring says #
    Amounts under $2.00
    Thank you for the question, Wanda! Iowa does not have a 'de minimus' amount for reporting. This means that you do need to report
    WANDA KEPLAR says #
    Amounts under $2.00
    Is there exceptions for reporting small dollar amounts? I have one item for Iowa for 2 cents. This does not make sense to do all
  • Cindy
    Cindy says #
    Danielle - Lord thank you for this lady and God bless her for all her hard work so I can set back and enjoy it. Aggregate - aggre
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 Due Diligence is the act of sending out letters to your lost owners or publishing their names in newspapers.  Almost every jurisdiction has laws that require companies to perform due diligence. The most common requirement is to send letters 120 days to 60 days before your filing is due. You’ll definitely want to meet each state’s requirements but I believe you should do more.

Many of your lost owners are likely customers whose business you wish to keep. I encourage you to send a round of customer service letters as soon as you can. The earlier you reach out to the customer, the better your chances of making contact and renewing your business relationship. 

You’ll still be required to perform due diligence within the states’ required timeframes, which will give you a second chance to reconnect with the remaining lost owners.

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  • Troy White
    Troy White says #
    Business Retention
    As I was working for a mid-size credit union in the mid-90's, member retention was second only to new member attraction. We did wh
  • NoEscheat
    NoEscheat says #
    Lost business...
    In our industry, a dormant account equates to lost business. Lost value to our membership, lost opportunities to help our members
  • Danielle Herring
    Danielle Herring says #
    RE:Lost business...
    Thank you so much for sharing your experience, NoEscheat! One thing everyone can keep in mind is that the customer service notif
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