There may be light at the end of the tunnel for the state’s dysfunctional unclaimed property program. The legislature just advanced a bill to substantially reform it.
With passage, the state would send millions of dollars in checks for qualifying unclaimed properties to the rightful owners, without requiring claims.
It’s the program’s mission to reunite owners with lost or abandoned assets, such as dormant financial accounts, uncashed checks, and unpaid insurance proceeds. But as a 2022 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 an onerous 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.
An administrative change last year ended the concealment of properties under $50, quadrupling the number of properties shown on the state’s website, CTBigList.com, to over nine million. But the state is still failing to make a good faith effort to return money, as would be required of a citizen who found a lost wallet.
The bipartisan bill seeks to rectify that by giving the state treasurer, whose job is to return the money, access to data from other state agencies to verify an owner’s current address. The state treasurer of Illinois, which has such a law, called it “common sense.”
Other states also have similar programs for returning money. Oregon’s “Checks Without Claims” initiative is expected to return $10 million. Rhode Island has been automatically returning money to people since 2017 and later expanded that practice to include businesses and nonprofits. California automatically returns money to local governments.
Connecticut’s bill incorporates the best practices of other states, including those above plus automatic payment of past-due child support by matching cases with unclaimed money owners, as Missouri and Mississippi have.
Unfortunately Treasurer Erick Russell opposed the bill, while proposing no amendments nor any legislation of his own.
He questioned the feasibility of some provisions. But the main provisions have already been implemented in other states.
He maintained that lowering the standard of proof for establishing ownership would invite fraud. But the current claims process clearly suffers from a standard of proof so high that many claimants can’t or won’t meet it. The state often demands documentation that owners don’t have, denying owners their money.
A high standard may prevent rare instances of fraud, but it also deters or prevents many rightful owners from recovering their money. If the goal is to prevent money from ending up in the wrong hands, the state must recognize that its hands are the wrong hands. The state’s failure to return $1.4 billion in unclaimed money – a staggering $400 per capita – is a far greater problem than fraud.
Treasurer Russell advised delaying reforms because his office is already overwhelmed with claims. That’s like saying in 1920, “Let’s delay giving women the right to vote because the voting lines are already too long.”
No, we should get the law right and deal with it. If the implementation takes time and/or additional resources, so be it. Automatic return of money requires legislation to allow data sharing among state agencies, and no delay would provide any insight that could alter the need for such legislation.
In 2022, former Treasurer Shawn Wooden belatedly proposed a bill that included automatic payments. He said, “Once this bill is passed and secure information sharing systems are in place, my Office will be ready to mail out millions of dollars to thousands of Connecticut families at a time when they may need it most.” House Speaker Matt Ritter (D-Hartford) and House Majority Leader Jason Rojas (D-East Hartford) joined Wooden in touting the proposed bill. When that bill was absorbed into the budget bill, however, the language that allowed state agencies to share data was inexplicably removed, disabling automatic payments.
So, Connecticut families were promised millions, but the checks never came. We shouldn’t wait anymore.
Sen. Mae Flexer (D-Windham), Rep. Matt Blumenthal (D-Stamford), Sen. Rob Sampson (R-Wolcott), Rep. Gale Mastrofrancesco (R-Wolcott), and the other members of the Government Administration and Elections Committee deserve credit for collaborating and advancing this bipartisan bill. Treasurer Russell should join them and work constructively to achieve its goals.
Utah lawmakers just approved a bill to enable automatic return of unclaimed money “with zero opposition” and with the support of their state treasurer. That’s what should happen in Connecticut.
Connecticut’s bill will potentially return millions of dollars to the rightful owners, benefitting people, businesses, nonprofits, and municipal governments. It should become law without delay.
Ron Lizzi of Bethany is an author and unclaimed property reform advocate.