Authored by Erin Foley
“Is This Real? Should We Respond?”
A client forwards you a letter. It says there may be money waiting for them, and the client asks, “Is this real? Should we respond?”
The question often comes with urgency. Someone in leadership wants it handled, or the client is worried that waiting means losing the money.
If your firm doesn’t offer unclaimed property services as part of your overall SALT solutions, this question can be uncomfortable. It’s outside your usual work, but it’s your client and your reputation. The right answer depends on who sent the letter.
The three letters
1. An outreach letter from a state. A state unclaimed property program is notifying the owner that it holds property in their name. This is generally a legitimate notice, but there have been some scams reported in recent years. The best course of action is to verify the letter through the state’s official website or by calling the state directly, and then claim the funds directly through the state.
2. A due diligence letter from the holder of the property. Before reporting property to the state, holders such as companies, banks and insurers are required to contact the owner to advise them that their property is scheduled to be turned over to the state (escheated). For our purposes a holder is the original issuer of the payment, the original issuer’s parent company or successor in interest, or the institution holding the funds. Check that the letter names the holder, describes the property, and asks for a response rather than a fee. Due diligence letters can go in a couple of different directions.
A company issued a payment of some sort to the owner, and it has become stale-dated. The usual response is to reply by the stated deadline, following the letter’s instructions via mail, email, or QR code. The owner is asked to confirm the funds are still owed and to provide an updated mailing address. The owner should receive a payment via mail to the address they indicated. However, be aware that sometimes it can take 6-9 months for these payments to be issued.
An institution such as a bank or transfer agent has an account in the owner’s name, but there has not been any activity on that account for a period of time. In the case of inactive bank accounts, an owner can respond to reactivate the account or make a deposit or withdrawal to reactivate it and prevent its escheatment. In the case of inactive securities or investment accounts, the owner can usually choose to reactivate their account or liquidate the securities. Please be aware that there will be processing fees associated with liquidation and there may be tax implications.
Often companies and institutions hire specialized firms to handle their due diligence compliance. So a letter may come from a compliance servicer acting on the holder’s behalf, and the response may go to that servicer rather than the holder. Don’t be thrown off by that. If the notice comes from someone other than the holder and the owner can’t match it to a known account or payment, contact the holder directly, using contact details you find yourself.
3. A solicitation letter from a finder. An unsolicited offer to recover assets for a fee, usually a percentage. This is the letter that needs the most scrutiny, and it’s the rest of this post.
A quick way to tell them apart: Types 1 and 2 ask the owner to verify or confirm information and do not require a fee. A solicitation asks the owner to sign an agreement, pay a fee or assign rights. If the letter mentions a percentage, a recovery agreement or a power of attorney, treat it as type 3.
A note on finders. Many finders, also called locators or claimant representatives, provide a valuable service. They research unclaimed property, identify and locate the owners, and handle a claims process that can be slow and technical. Owners often don’t know the property exists, and a finder can be the reason they recover it. The trouble is telling the legitimate ones from the ones that exaggerate or mislead.
Why solicitation letters are hard to read
These letters are often vague, and they’re hard to decipher if unclaimed property isn’t your area. A letter may give a name and a dollar figure with no holder, no state and no property type.
Sadly, over the past two to five years, some finders have begun to exaggerate or misstate information in their outreach. Common patterns include rounding amounts up and adding several properties together to produce a larger total, even when some of those properties aren’t actually available to claim. The headline number makes the offer look better than it is.
In some cases the vagueness is deliberate. The less an owner knows, the harder it is for them to locate the funds on their own through their own books or through external research.
I once reviewed a solicitation for a client and couldn’t find the funds it described. The client went back to the finder and asked for more specific details. The finder never responded.
A large dollar figure adds to the pressure. If a letter claims a significant amount and the owner can’t find it in their books, the questions come quickly: Did we miss it? Is it ours? Will someone ask why we didn’t know? That stress is understandable, and it’s one reason a vague letter can push an owner toward signing before they’ve verified anything.
Questions to ask before moving forward
If your client wants to consider the offer, these questions help you decide whether to work with this person.
Property details
Who is the payee? Make sure the property really belongs to your client. A payee name may be very close to your client, but actually belong to an unrelated similarly named company. The payee may be a subsidiary that the client bought or sold. Depending on the type of sale, the client may not have the right to claim the funds.
When was the payment issued, and by whom? If it’s recent, is it truly lost? Your client may still be determining where to account for the payment. I have seen finder letters offering to get a check reissued when the check was only 60 days old, and in one case the letter arrived before the check had even been received.
What is the exact dollar amount? This information can allow your client to better review its internal records to see if the amount can be identified.
Terms and transparency
What is your fee? Is it fixed or a percentage, and is it negotiable or capped?
What exactly does the agreement authorize, and for how long? Does it include an assignment of rights or a power of attorney? Be sure that the agreement states exactly what the client wants to agree to. Watch out for broad agreements that could cover assets or a length of time that the client did not intend to contract for.
If you recover nothing, does the client owe anything? The industry standard is contingency-based fees.
What will you disclose, and when? For example, will you identify the holder once an agreement is signed, and will that be in writing?
Track record and process
Are you a member of the Unclaimed Property Professionals Organization (UPPO)? Membership isn’t a guarantee of quality, but it signals a commitment to professional standards.
Can you provide references or examples of similar recoveries?
Who files the claim, how long does it usually take, and how will you keep us informed?
What information do you need from my client, and how will it be protected?
Red flags
Unwilling to share any additional details about the property
Fees or terms that aren’t offered in writing
Extremely high fees or unwillingness to negotiate
Pressure to sign quickly
A round or rounded-up total with no itemization
No confirmation that each property is currently claimable
Offers to recover or reissue a payment that is very recent
No explanation, even in general terms, of how the funds were found
Bottom line: many finders won’t name the holder, custodian or source of the funds before an agreement is signed. After all, this is their business, and they’ve invested significant resources in it. A refusal to share other pertinent property details isn’t proof of a scam, but it is a warning sign.
Giving your client a better answer
The goal is to move from “I don’t know” to a clear process: identify the letter type, verify what you can about the property, and evaluate the sender against the questions above.
Firms that want to go further can offer clients a vetted alternative: a partner that can search for assets on the client’s behalf, so the client doesn’t depend on unsolicited letters. You don’t need to build a recovery practice or take on escheatment or compliance work to do this.
A partnership with AssetFynd is flexible. Some firms simply introduce their client and hand the whole process over to AssetFynd. Others stay involved, working alongside AssetFynd as the search and claims move forward. Either way, your firm keeps the client relationship, and you decide how much of the process to be part of.
The next time a client forwards a letter, you have an answer. You can tell them what kind of letter it is, what to check, and where to turn if they want help recovering what they’re owed.
A trusted partner to help you respond
A solicitation letter received by your client and shared with you opens the door to turn a reactive response to a proactive chance to strengthen your relationship. Reach out to AssetFynd to obtain a complimentary Opportunity Assessment Report providing an initial view of potential lost or unclaimed financial assets payable to your client across over 600 global sources
Ready to Find Your Money?
Request your complimentary Opportunity Assessment Report at AssetFynd.com.
Lost Assets Find You. Globally.
FAQs
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A state outreach letter and a holder’s due diligence letter both ask the owner to verify or confirm information and do not require a fee. A solicitation asks the owner to sign an agreement, pay a fee or assign rights. If the letter mentions a percentage, a recovery agreement or a power of attorney, treat it as a solicitation.
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It is generally a legitimate notice, but there have been some scams reported in recent years. The best course of action is to verify the letter through the state’s official website or by calling the state directly, and then claim the funds directly through the state.
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Before reporting property to the state, holders such as companies, banks and insurers are required to contact the owner to advise them that their property is scheduled to be turned over to the state. Check that the letter names the holder, describes the property, and asks for a response rather than a fee. Holders often hire specialized compliance servicers, so the letter may come from a servicer acting on the holder’s behalf.
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Many finders, also called locators or claimant representatives, provide a valuable service. They research unclaimed property, identify and locate the owners, and handle a claims process that can be slow and technical. The trouble is telling the legitimate ones from the ones that exaggerate or mislead.
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Not on its own. Many finders will not name the holder, custodian or source of the funds before an agreement is signed, because this is their business and they have invested significant resources in it. A refusal to share other pertinent property details is not proof of a scam, but it is a warning sign.
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By offering clients a vetted alternative: a partner that can search for assets on the client’s behalf, so the client does not depend on unsolicited letters. A partnership with AssetFynd is flexible. Some firms simply introduce their client and hand the whole process over, while others stay involved as the search and claims move forward. Either way, the firm keeps the client relationship.