Category Archives: Need 4 Consumer Protection Legislation

Dear Doug: Unclaimed Property Legislation is “For the people” and will help you pay for promises

There’s approximately $2 billion+ in Unclaimed Property sitting with various financial organizations across Ontario that needs to be returned to hard-working Ontarians but a large portion of that would ultimately also serve the Ontario budget in a big way now and in years to come. All we need to make that happen is long awaited Unclaimed Property Legislation to be initiated in Ontario. Such legislation fits the definition of “For the People” and for the Province.

Unclaimed property legislation is an important part of consumer protection – missing in Ontario

Ontario is the single largest jurisdiction in North America without unclaimed property law to protect consumers. Such legislation is an important aspect of consumer protection which is why all jurisdictions across the US have had such legislation in force for 50 years or more. Unclaimed property legislation also exists across the UK, Australia, New Zealand and most recently, Kenya.   In the last 10 years legislation has finally been enacted in Alberta and Quebec both offering a centralized database for searches but differing slightly in the assets that are included. BC has had legislation in place since 2000, but there is a voluntary element which is unlike any other jurisdiction.

There is no reporting of unclaimed assets which makes looking for lost assets difficult to say the least

But it is Ontario that remains the most disappointing outlier as Canada’s largest province where much of the financial sector is located. If you live in Ontario and you or a loved one have misplaced or lost a financial asset, the lack of legislation makes it hard for you to find those assets. If your Grandfather Jack made you a beneficiary on an insurance policy and forgot to tell you about it before he passed away and you don’t find any details about the policy in his belongings, you’re out of luck. There is no obligation for an insurer to look for beneficiaries even if the insured has likely passed based on age. If your Mom invested in an Ontario Savings bond 20 years ago and she died without telling you, the bond is part of the $70 million or more in unclaimed/matured Ontario Savings bonds sitting idle because the Province has indicated, it’s “not their job” to look for bond holders even if they know the address when issuing a T5 for tax purposes to the bond holder. If your Dad had an account with an Ontario Credit Union 30 years ago that he forgot about, it’s still there waiting for him because Ontario Credit Unions have been waiting for the Ministry of Finance to tell them where to send inactive and unclaimed credit union accounts for more than 20 years. Section 182 of the Ontario Credit Union Act (1994) indicated that unclaimed accounts should be set aside but didn’t specify where to forward them.  Whereas, in the case of federally regulated banks, Canadian dollar accounts without activity for 10 years or more are forwarded to the Bank of Canada by December of each year and added to the unclaimed account registry available online.

Unclaimed Property Legislation would be a Win/Win for the people of Ontario and the Province

Ironically, Ontario was the first Canadian province to pass unclaimed property legislation in 1989, in an effort to “safeguard the rights of owners of intangible property by providing a method for owners to recover, in perpetuity, their intangible property held by others. “  The program as envisioned was to rely on the services of the Public Trustee to administer the program on behalf of the province, “to hold and to return lost and forgotten property”. The Act also specified that unclaimed intangible property was to be used for the benefit of the people of Ontario until the property was claimed by its owner.  That’s the way it works in the US. In the US, despite central databases and proactive promotion to residents to look online for any missing money, a good portion of over $70 billion total in unclaimed financial assets collected across  each State will remain unclaimed and so those funds are used to support state treasuries, in particular education, infrastructure and health care. Indeed, in most US states, while claims can be made in perpetuity by legal owners or by their heirs, it’s been long considered good public policy to put unclaimed property to work which is why unclaimed financial property is a big and growing revenue generator ranking 3rd after corporate and personal tax. That makes unclaimed financial property legislation a win/win for owners and for government.

Ontario has had 2 false starts with Unclaimed Financial Property legislation

Despite the interest of those who could benefit from Unclaimed property legislation, the statute for unclaimed property legislation in Ontario was not proclaimed into force after being passed in 1989 and was repealed 22 years later in 2011. The 2012 budget announced Ontario’s intention to try again and create an unclaimed property scheme that would mirror that of the US. But despite myself and other stakeholders attending and providing input to those consultations with the Ontario Ministry of Attorney General in 2013, there has been virtually no follow up.  After making several inquiries, the only  response I could gather from the now former, Attorney General’s office was that it was “not a priority” This despite the fact that the proposed program for unclaimed intangible property could be fairly easily initiated utilizing the Uniform Unclaimed Intangible Property Act, which was developed by the Uniform Law Conference of Canada many years ago. The rules are written we just need it to move forward.

Ontario is a disappointing outlier despite an approximate $2 Billion in unclaimed financial assets

And so here we are in 2018 with Ontario remaining as the single largest outlier in North America when it comes to unclaimed property legislation.  That’s due to the fact that Ontario has an estimated $2 Billion + in unclaimed or lost financial assets in the form of unclaimed provincially regulated bank/trust/credit union accounts, insurance policies, share certificates, dividends, unclaimed wages, bonds, pensions and other property types including prepaid funeral deposits, utility deposits and tax refunds etc.  Without any legislation there is no duty for organizations holding unclaimed property to report on or to relinquish those assets or to look for those who have lost track of their financial assets (or the heirs of legal owners).

If you think that’s a lot of money here’s a comparable. The State of Illinois has had unclaimed property program in place since 1962 and has a population of about a million less than Ontario. The State of Illinois Treasurer’s unclaimed property program – now known as I-Cash  is currently safeguarding 15 million properties valued at roughly $2.9 Billion and working to reunite each with its rightful owner. 1 in four residents of Illinois who search the I-Cash database finds property to claim with an average claim of $1,000. 1 in 8 of residents living in Illinois has unclaimed property and in the last 2 years more than $300 million has been paid out to legal owners by a proactive Illinois Treasury.

No one loses track of their hard earned and generally tax paid financial assets

To be clear, no one loses their hard earned and generally tax paid financial assets on purpose. Assets generally become lost as a result of a tragic event, forgetfulness, missing or damaged records or human error. In Ontario because there is no law that requires the holders of unclaimed financial assets to look for the asset owners, generally they don’t.  Much of the unclaimed or lost financial assets owing may not be life-changing windfalls, but I believe that hard working Ontario residents deserve to have one place to search & find those unclaimed financial assets. Given that it’s 2018, it should not be this difficult to move forward to do what’s right when it would benefit consumers, taxpayers, and our cash strapped government treasury.

It seems at least to me so very “UnCanadian” to not move forward with unclaimed property legislation and do what’s right for the people of Ontario when ultimately it might serve to also be an economic action plan in waiting for Ontario and help the new Premier pay for some of his promises.

Advertisements

Canada -34 Million people but Billions in Unclaimed Funds ?

$320M  Now…$500M* in the Bank of Canada (5 year change)LegacyTracker Poster

$125M Now    $259M*   in Matured CSBs (5 year change)

+ 20-30% of insurance policies + Pension Funds + Shares + Bonds +

Safety Deposit Boxes + Security Deposits + Credit Union Accounts + etc. etc.

Estimated Total:  $4B (Canada) 

Mark Carney and Dead Money

Open letter to Mark Carney dated June 11 2013

Dear Mr. Carney:

There’s been a fair bit of ongoing analysis and controversy surrounding the remarks you made some months ago about Corporate Canada sitting on huge piles of “dead money” on their balance sheets that could be better utilized to feed the economy or failing that; returned to investors.

Financial Post Aug 22 2012
The Globe and Mail Aug 22, 2012
Toronto Star Sept 17 2012
Canadian Business Feb 12, 2013
Ottawa Business Journal Dec 3 2012
CBC News August 23 2012

 

Estimates vary but it seems that the total balance of ‘dead money’ has increased as much as 40% since 2009; and may total as much as $526 Billion… and that has you concerned.

That is indeed a lot of cash.  No question there.

But, as you head out on your new adventure and leave the Bank of Canada,  I think it’s only fair to point out that corporations are not alone in holding onto ‘dead money’ that could be better utilized to grow the economy.

I am a bit embarrassed to point out that our own highly respected Bank of Canada which you have so masterfully governed for the past 5 years, is itself currently sitting on $500Million in unclaimed funds which I think we could agree may also be described as “dead money” and money that could be much better utilized to feed the economy….if not the actual owners.  That might be possible, if only the Bank of Canada took a more proactive approach to finding those owners.

Indeed, the rise in the balance of unclaimed funds in the Bank of Canada certainly appears to rival the rise in ‘dead money’ in Corporations with an increase of 55% over the past 5 years (!) That’s an extraordinary increase on an extraordinary balance of ‘dead money’ given that the this balance of $500M only includes amounts turned over by federally (not provincially) regulated banks, and only after 10 years of inactivity and only where those accounts are held in Canadian dollars (no foreign $ amounts).

Alas, despite this extraordinary increase on an extraordinary balance on a population of only some 34M Canadians, very little awareness and very little effort seems to be being made in trying to locate owners. Granted, the Bank of Canada does update this balance once a year and provides an online database for unclaimed funds; whereas, the same treatment is not afforded to the balance of Unclaimed/Matured Canada Savings Bonds which are also piling up at the BoC.

It is not a published number but I understand the value of Unclaimed/Matured Canada Savings Bonds totaled $259M as of this past April which I believe would make that an increase of $147M or 231% or over the past 5 years.

Extraordinary and Sad at the same time.

So, using the same argument you have made for ‘dead money’ in Corporate Canada…for the sake of the economy AND in this case, for the sake of Canadians generally, don’t you think we could put a little more effort into reuniting this money with owners?  

This is after all, the age of technology so one would think we could apply a little technology to finding owners and making things right. But as well,  if some inspiration is needed into this challenge, we can also look south for some good ideas given that the US has had consistent & comprehensive unclaimed property legislation in place for 50+ years. In the US, unlike the situation in Canada, unclaimed property legislation is an  important part of consumer protection legislation. Sadly, that’s not the case in Canada; but it should be. Each state in the US has enacted unclaimed property legislation requiring the transfer of all unclaimed property to  that State who then takes a very proactive role in helping to return assets to owners.

So before you go…perhaps you and Mr. Poloz could give the ‘dead money’ in the Bank of Canada some thought.

 

 

Ontario-2nd try at Unclaimed Intangible Property Legislation

Originally published by LegacyTracker July 25 2013

Despite Ontario being the first province to pass Unclaimed property legislation in Canada (1989), they could not get it all together (the rules) for a period of 22 years later and the Bill was repealed in Dec 2011. Yes. Sad. Many Ontario families are no doubt owed some money.

On the upside they are trying again. Consultations have been taking place and we await next steps. Read about the consultations with the Ministry of the Attorney General here 

My many suggestions to the Attorney General inlcuded this one:

No more push to paperless until Canada gets all Provinces onboard with Unclaimed Property Legislation.

Yesterday I received a note from my RESP provider (Invesco Trimark). No more PRINTED semi-annual statements effective 2014. Not cool because this increases the risk that any funds with Invesco Trimark will go unclaimed. But Age Unfriendly as well. Do all Invesco Trimark Investors have online access? Really?

The US considers such legislation as an important component of Consumer Protection Legislation-and it is! So…why are we some 40 years behind? The US has $58B in unclaimed funds/property despite the program but searching for assets is much easier.

In Canada ? The total is at least $4B and the searching is difficult.

USA Unclaimed Fund total is $58B yes $58B

Originally published by LegacyTracker Feb 13 2013

The unclaimed fund balances were recently updated as they are each year..by each State, federal and other organization as required in the United States. That gives us the most recent estimate for unclaimed funds waiting for owners to be reunited with their money:

The new estimated value for unclaimed property is …$58 Billion.

Buried US cash

Again, sad but true.

That’s a lot of money as it works out to approximately $186 per resident of the US. Imagine if that money was all put to use in the economy.

The list of assets included in what the US defines as unclaimed (or abandoned) property (or sometimes referred to as unclaimed assets or unclaimed funds) is quite wide ranging in the US and actually getting wider.

Common forms of unclaimed property in the US includes savings or chequing accounts, stocks, uncashed dividends or payroll checks, refunds, traveler’s checks, trust distributions, unredeemed money orders or gift certificate/cards (in some states), insurance payments or refunds and life insurance policies, annuities, certificates of deposit, customer overpayments, utility security deposits, mineral royalty payments, and contents of safety deposit boxes.

Here’s some further detail on this $58 Billion estimate:

·        $300 Million in pension benefits from employment owed to 38,000 individuals

·        $16 Billion worth of matured US savings bonds (more than 45 million bonds)

·        $153.3 Million in tax refunds that were not deliverable by the IRS

·        $1 Billion in unclaimed insurance policy proceeds

·        $41.7 Billion in unclaimed funds held by individual states.

This last figure of $41.7 Billion is worthy of some further explanation. .While rules vary slightly between each state, specific types of property are considered as being ‘abandoned’ or unclaimed when there has been no activity for 1-5 years. At that point, all financial organizations or any organization holding such property or funds are required to turn them over to the State Treasury.

Each state then takes over the search for owners through websites, newspaper ads, and booths at Malls and events like State fairs and Exhibitions. While searching for the owners, the State can use those assets to fund government operations but the owner’s claim to the property remains intact. Of the $58 Billion in unclaimed funds that has been reported, $41.7 Billion is being held by individual States. .

“The money belongs to the owner in perpetuity. Even if the owner dies, then their heirs could come back and claim it,” said Carolyn Atkinson, West Virginia’s deputy treasurer for unclaimed property and a past president of National Association of Unclaimed Property Administrators.

More on this story:

To learn more about the National Association of Unclaimed Property Administrators and for a link to all State databases : 

NAUPA Website

Life is…. complicated. Death more so. Get Organized.

Orginally published Jan 13 2013

Stop procrastinating…Get your stuff together (please)….

This is a poster published first in the Wall Street in 2011 – It’s a good one..with an article from Saabira Chaudhuri titled “The 25 documents you need before you Die”  It’s cdrtainly an attention grabber.

25 important documents article

It’s a great poster and a fascinating story which talks about the financial consequences that befalls your family and loved ones if you fail to keep all your documents and important papers in order. In the US where they track, report and actively look for owners of unclaimed funds they know that the toll is great. $33B (now $58B) approximately in unclaimed bank accounts and other assets like paid up insurance policies.

You may or may not know (maybe this is your first visit here) that Canada is not so lucky. Only 2 provinces have any real unclaimed intangible property legislation in place (Alberta & Quebec).  That’s not the way it should be but that’s the way it is right now in Canada.

That sad fact, makes it even more critical to ensure that your records are organized and shared to make sure you reduce the financial risk that comes from not being so organized. So yes. Please stop procrastinating around this topic.

Read the article from the Wall Street Jounal here 

Secret life of unclaimed safety deposit boxes

From a story by the New England Cable News Feb 16 2013

Unclaimed Property/Untold Stories

I am sure any day now someone will realize that they could make the story of unclaimed safety deposit boxes a reality TV show but until they do so, I pass along this story by  New England Cable News which shines some light on how the US handles unclaimed safety deposit boxes (for obvious reasons, it fails to shine any light on what happens here in Canada but we will keep trying)

safety deposit boxes

Read the story from NECN here 

In the US, each State takes responsibility for the boxes after 5 years of no activity (most importantly, missed payments) because safety deposit boxes are considered unclaimed property and well, the US has had unclaimed property legislation for about 40+ years.

After reading the story of a typical day of opening abandoned safety deposit boxes in in a typical state like Wisconsin I have a new appreciation of why they REALLY try to return the boxes to the rightful owners.

Hundreds of boxes arrive at this particular office in Wisconsin but each State may vary in the additional amount of time they will hold abandoned items after receiving the boxes from the banks who have already held them for 5 years.. Wisconsin holds boxes for 2 years while Iowa will hold boxes for 10 more years.

“We’ve really tried to push our outreach efforts to let people know about unclaimed funds and getting money back to people,” said Scott Feldt, the deputy state treasurer. “That’s our major effort, that’s why we are here.”

They do so at by way of public events, radio, TV and newspaper interviews. They also publish lists of people owed unclaimed property in various newspapers and in their searchable online database.

More commonly, they hold coins and jewelry, old stamps and personal documents, like wills and marriage certificates. But often times unusual items of no monetary value re found in the boxes and they have no choice but to destroy. This story details some of those finds:

·        One box contained a Band-Aid box and two toenails, wrapped in tissue.·        One box contained an empty envelope.(only)

·        One box contained nothing but spoons.

·        One box contained a Rolex box, but alas, no Rolex.

·        One box contained dental gold, teeth still attached

Some of the items are sold in monthly eBay auctions. The office holds the proceeds for the owner in the event someone later claims them. Perhaps not these particular items but some items that are found to have value are sold in monthly eBay auctions and then the proceeds are held for the owner in the event someone later claims them.

And, while it may depend on the State most Sates will hold onto certain special items ‘in perpetuity’ like photographs and war medals which they know would mean the most…if they eventually find the rightful owners.

All in all, it seems like a fairly civilized and respectful process and transparent… so what is our process here in Canada? It has yet to be told I’m afraid. Or at least, I haven’t found it yet. If you happen to know; please let us know or maybe a new Cdn Reality Show will help us unravel it first….