Up-to-date News Regarding Unclaimed Property and Corporate Compliance


States Loooking To Change Rules on Gift Cards

Store Gift Card DisplayJanuary is a busy month as many state legislatures head back into session. Several state legislatures are looking to change the rules on gift cards. Gift cards remain an important issue in unclaimed property, as estimates say that $45 billion worth of gift cards may have gone unredeemed since 2005. State legislatures continue to eye this money as potential ways to balance state budgets.

New York

Delaware Bill Would Implement Some Task Force Recommendations

Update January 23, 2015: The Senate replaced Amendment One with Amendment Two. In addition to the other changes discussed below, it made one additional change to SB 11 - it removed the requirement that the State Escheator make a specific written determination of fraud before the Statute of Limitations is left open-ended. This provision was a key provision that benefited holders. The bill, with the new amendments, was passed unanimously by the Senate. It now moves on to the House.

Delaware Task Force Sends Recommendations to Legislature

Last June, the Delaware Senate created a task force to look at unclaimed property practices in the state. Recently, that task force sent its findings to the legislature. Underlying the entire report is the fact that Delaware relies heavily on unclaimed property in its budget process.

California Announces Settlement with Morgan Stanley

As everyone was preparing for the Christmas holidays last week, California announced that it and 34 other states had settled a multi-state audit with Morgan Stanley, a Delaware incorporated company, for lost and abandoned brokerage or customer accounts. The audit was conducted by Verus Financial which has been the lead auditor for most of the life insurance audits. This audit and settlement is notable because it has Verus expanding beyond life insurance and into other major markets.

Federal Judge Sends Gift Card Case Back to State Court

Federal Judge Sends Gift Card case back to State CourtIn 2013, a whistleblower, Sean French, filed a lawsuit in Delaware state court against a variety of retailer defendants and their service provider Card Compliant. The complaint alleges that the Retailers, with the help of Card Compliant, setup a fraudulent gift card scheme, intending to keep all the breakage of the gift card programs instead of remitting it to the State of Delaware.

Osram Sylvania Files Suit Against Delaware

Photo by smokedsalmon on FreeDigitalPhotos.netOn December 11, 2014, Osram Sylvania, Inc., a lighting manufacturer incorporated in Delaware, filed a lawsuit against Delaware in U.S. District Court, stemming from a Kelmar audit.

CFPB to Expand Consumer Protections for Prepaid Cards

The Consumer Financial Protection Bureau (CFPB) announced its plan to expand consumer protection rules that apply to credit cards to many prepaid card products, including general use, open loop cards, tax refund cards, and payroll cards. This expansion will also encompass many of the mobile payment products currently available or in development, like Google Wallet and Apple Pay. The public will have 90 days to comment on the proposed rules.

Some of the new proposed rules include:

New Jersey Data Collection Bubbles Up Again

Update January 5, 2015: On December 18, 2014, S2335 was substituted for A3480. The Assembly then passed S2335 which would eliminate the data collection requirement.

Barganier Sponsors UPPO Holder Seminar in Atlanta

Barganier and Associates was happy to sponsor the Unclaimed Property Professionals Organization (UPPO) Holder Seminar held in Atlanta, Georgia this week. The seminar was held over two days in downtown Atlanta, covering topics such as holders' rights and responsibilities, policies and procedures, due diligence requirements, audit defense, and federal law preemption of state unclaimed property laws.

There were two tracks available to attendees based on their experience in unclaimed property - a beginner's track and an intermediate track. Barganier had personnel attend each session. Here are the top five takeaways that we gathered from the Holders' Seminar.

Texas Supreme Court Addresses Class Action Settlements

New Missouri Bill on Unclaimed PropertyIn 2006, Highland Homes came under fire from a disgruntled subcontractor about amounts withheld from their payments for general liability insurance. By 2009, the subcontractor had made a class action lawsuit out of the withholdings. The class action was eventually settled, with Highland Homes refunding the withholdings to subcontractors.