The state government’s unclaimed property program was dysfunctional. The state’s news media failed to expose that until recently.
The program’s mission is to reunite lost or abandoned assets, such as uncashed checks, dormant financial accounts, and unpaid insurance proceeds, with their rightful owners. But as a recent Connecticut Mirror investigation found, the program was largely failing in that mission and instead acting more as a revenue stream for the state.
The program returned only a small fraction of the money it collected, hid millions of properties under $50, and frustrated owners with a cumbersome claims process. And the burden was entirely on owners to find and claim their property, not on the state to return it, even though the state had many owners’ names and addresses.
After the Connecticut Mirror exposed the program’s deficiencies, Connecticut Treasurer Shawn Wooden made some improvements. Properties under $50 were revealed, quadrupling the number of properties on the unclaimed property website, CTBigList.com. The claims process was streamlined, with the notarization requirement eliminated.
Further improvements came in the new budget law, which requires the treasurer to mail notices to owners of properties transferred to the state in the previous year. Although the law calls for automatic payment of some owners, without claims, language that would have enabled that provision by allowing the treasurer to obtain owners’ current addresses from other state agencies was inexplicably removed. So, automatic payment, which other states have, appears to be disabled.
More legislative reforms are needed to provide automatic return of money to individuals, businesses, nonprofits, and municipal governments, and to allow payment of past-due child support by matching cases with unclaimed money owners.
Still, substantial progress has been made, thanks to the reporting of the Connecticut Mirror and WTNH. Already, $36 million was claimed in February, more than was paid out in the entire previous fiscal year.
But just as the news media deserve credit for prompting improvements, they also deserve blame for their long-standing failure to scrutinize the program. For years, the treasurer’s office produced friendly, glowing press releases touting the program’s virtues, and news outlets dutifully spread the information without challenging it. No one asked probing questions.
Why does the state have a billion dollars in unclaimed money? Why is the state returning such a small percentage of what it collects? If it’s the state’s job to return the money, why isn’t that failure? Why is it solely the owners’ responsibility to find and claim properties, when state law places the burden on the finder of lost property to return it? Why can’t the state automatically return money to known owners, like taxpayers, registered businesses and nonprofits, and municipal governments, as other states do? Why isn’t the treasurer pushing for legislation to allow automatic return? Why are properties under $50 not shown on CTBigList.com? Why is the website’s search capability so poor? If this money is going into the general fund, doesn’t that create a disincentive to return the money? Why is the clams process so onerous? Why is notarization necessary?
Instead of asking such questions, news outlets essentially laundered the treasurer’s spin, as if they worked for the state or completely trusted state officials. As a result, bad government remained bad, and the public was left uninformed, many poorer for it.
Reporters should take note that the treasurer continues to spout self-serving spin unabated. For example, he cherry-picks the 2020 unclaimed property return rate of 55% to claim that the state’s program ranked second in the nation that year, when return rates vary widely year to year – it was 22% for 2021, 37% over the last five years*, and none of those numbers are worth bragging about.
He touts the new website as if it’s a great achievement, when the state belatedly replaced its old, poor website by simply contracting with the most popular vendor, and CTBigList.com now looks virtually identical to the websites of 27 other states.
The lesson of Connecticut’s unclaimed property saga is clear: a trusting, incurious press fosters bad government, while a skeptical, challenging press fosters good government.
* 37% according to annual summaries on the state website (some archived).
Ron Lizzi of Bethany is an author and unclaimed property reform advocate.