CT sending ‘unclaimed’ money back to record numbers of residents. Is more reform needed?

Nearly 73,000 people successfully recouped money from Connecticut’s unclaimed property program during the 2023 fiscal year as the state shattered its record for returning uncashed checks, misplaced refunds and forgotten insurance policies to their rightful owners.

Connecticut Treasurer Erick Russell, who oversees the millions of dollars in unclaimed property that the state sweeps up every year, said his office was able to reunite a record number of people with their money due to his staff automatically mailing checks for the first time in the program’s history.

“I’m very happy with the progress that we’ve made so far this year to modernize the unclaimed property system and streamline the processing of claims,” Russell said. “It’s been a ton of work for our team but well worth it.”

The 72,981 people who recovered their money over the past fiscal year is a huge improvement for the program, which traditionally required individuals to locate their missing assets on a state website, known as the CT Big List, and to file a formal claim with the treasurer’s office.

During each of the previous 23 years, that process resulted in fewer than 16,000 people on average successfully retrieving their money from the state.

The Connecticut Mirror published a story in early 2022 that highlighted how the unclaimed property program returned less than 37% of the money it required banks, utilities, insurance companies and other financial institutions to turn over to the state during the course of two decades.

That investigation also revealed that the treasurer’s office had failed to disclose millions of checks, refunds and other assets that were valued under $50 on the CT Big List, making it next to impossible for people to recognize the state was in possession of their money.

As a result of that reporting, state officials sought to reform parts of the program in order make it easier for people to identify and recover the money that belongs to them.

Shawn Wooden, who served as treasurer through 2022, dropped the requirement that every claim submitted to the state be notarized, and state legislators changed the law to require every piece of unclaimed property to be added to the CT Big List, no matter what the value of those assets are.

The Legislature also gave the treasurer’s office the authority to automatically return any assets valued below $2,500 — if the state could confirm the identity and addresses of the rightful owners.

That was a significant change and one that brought Connecticut in line with a growing number of states that were automatically issuing checks to people included on their lists of unclaimed property.

But many people, including Wooden, suggested that legal change would do little in practice without lawmakers also giving the treasurer’s staff access to state tax records and other existing government data that could help them locate people.

Lawmakers declined over the past two sessions to pass bills that would ensure the treasurer’s office had access to that type of detailed information.

But Russell, the current treasurer, said that did not prevent his team from finding other ways to verify the owners of unclaimed property that is valued under $2,500 and to pinpoint those individuals’ current addresses.

He said the treasurer’s office used LexisNexis, a company that maintains a variety of information about individuals and organizations, to check people’s names, addresses and other personal information like Social Security numbers or taxpayer identification numbers.

“In early June, we were able to run the first batches of automatic payments,” Russell said. “Several internal processes had to be adjusted to accomplish this, and a lot of testing and preparatory work was done by our unclaimed property team. But it allowed us to send thousands of checks of unclaimed property back to its owners without requiring physical paperwork on their end.”

The treasurer’s office also collaborated with the state Department of Social Services, Russell said, to identify people with unclaimed property who also owe child support. They then used that unclaimed money to cover portions of the delinquent child support.

By automating those processes, Russell said, the treasurer’s office has been able to focus more of its resources on assisting people who file claims for unclaimed property valued above $2,500 and in situations where the ownership of the unclaimed money is more difficult to resolve.

“We’re excited by the progress that’s been made so far and are eager to build on it to further modernize the unclaimed property system and streamline the returning of funds to their rightful owners,” Russell said.

The number of people who cashed in on the unclaimed property program last year is one statistic. But it’s not the only metric that the treasurer’s office judges itself on.

The office also monitors how much of the unclaimed money it returns to people every year, and when it comes to that figure, there’s been less progress.

The most recent annual report for the unclaimed property program shows the state returned roughly $72 million during the 2023 fiscal year. That is a substantial figure, but it still represents less than 40% of the roughly $188 million the state swept up last year.

Ron Lizzi, a Connecticut resident who has waged a public campaign to reform the state’s unclaimed property program including encouraging state lawmakers to file new legislation, said that figure shows that there is still more room for improvement.

Lizzi recognized that not all of the money can be returned because in many instances there isn’t enough information included with every asset to find the true owner.

Still, Lizzi believes the program should be able to return a larger portion of the money in its possession, considering the state currently maintains a website that contains an estimated 9.9 million owners and $1.4 billion in unclaimed property that was accumulated over decades.

Lizzi helped to convince a bipartisan group of lawmakers on the Legislature’s Government Administration and Elections Committee to advance a bill pertaining to the unclaimed property program during the 2023 session.

That bill would have required the treasurer to list more specific details about each piece of unclaimed property on the CT Big List. It would have authorized data sharing between the Treasurer’s office and the state Department of Revenue Services. And it would have increased automatic payments to assets valued up to $5,000.

The legislation was never taken up by the House and Senate, however.

“More reform is needed,” said Lizzi, who lives in Bethany, “and I will continue to propose it and push for it.”

 Andrew Brown is a reporter for The Connecticut Mirror (https://ctmirror.org/ ). Copyright 2023 © The Connecticut Mirror.