“Due diligence” is a phrase commonly heard in work environments today. However, it is so often said that few people take the time to truly think about what it means to practice due diligence when performing their jobs.
Every professional should strive to act with due diligence in their line of work, whether this means taking time to review spreadsheets for errors or going the extra mile to ensure a customer receives the correct product. Practicing due diligence means doing everything in one’s power to achieve a desired result.
When it comes to the world of unclaimed property, practicing due diligence becomes even more crucial. When handling unclaimed property, due diligence refers to the process of sending a letter to the last known address of the customer to notify them of their unclaimed property. Furthermore, this letter is sent prior to reporting their unclaimed property to the state.
Unfortunately, this can often be a difficult and daunting process. However, doing so is absolutely necessary to not only abide by unclaimed property laws but also ensure the unclaimed property is returned to its rightful owner.
When sending these letters, businesses must ensure they include any specific language in the letter that is required by the state in which they operate. This helps them to guarantee they are practicing due diligence and abiding by all unclaimed property laws.
The required language gives the customer information about their unclaimed property as well as how to claim it. Generally, the letter outlines who to contact to claim the property, what will happen if they fail to contact the holder of the property within 30 days, and what type of property they could be entitled to.
However, many states only require businesses to send due diligence letters once the value of the unclaimed property has surpassed a certain dollar threshold. In many states, this is when the value of the unclaimed property is approximately $50 or more.
Yet, all states do not follow this rule. Specifically, in New York and Connecticut, there is no dollar threshold. Therefore, due diligence letters must be sent to all people with unclaimed property, whether it is worth $5 or $500.
When sending due diligence letters, businesses should also keep in mind these letters are often more effective when sent well in advance of when unclaimed property needs to be reported to the states in which they operate. Typically, due diligence letters need to be sent 60 to 120 days before the date by which all unclaimed property needs to be reported to the state. Thus, sending these letters in advance gives people more time to not only receive their letters but also respond and claim their property before it is reported.
Furthermore, businesses can boost the effectiveness of their due diligence letters by incorporating a call to action into them in addition to the language required by law. These calls to action should encourage the recipients of the letters to take active measures to reach out and claim their property.
One call to action, for example, may urge them to call a specific number to learn where they can go to claim their property. Another, for example, may prompt them to visit a website to learn more about the process of claiming their property. The goal is to motivate customers to claim their property before it has to be reported to the state.
Despite following these guidelines to a “T,” many businesses still struggle to get all customers to claim their property. Unfortunately, the average response rate for due diligence letters is about 20%. This is often due to the letter going to an old address that the customer no longer resides at. When businesses take time to search for better, current addresses to mail due diligence letters to, the response rate is often boosted to 80% or greater. Therefore, it is important businesses go above and beyond just sending due diligence letters to boost the likelihood of customers responding and claiming their property.
In addition to looking for updated mailing addresses, businesses can go above and beyond by making phone calls to customers receiving letters to ensure they keep an eye out for them. They can also send emails to customers receiving letters as well, as many people are much more likely to open an email than answer the phone. Lastly, businesses can go above and beyond by giving customers multiple options to take to respond to the letters. Instead of requiring them to respond by phone to these letters, businesses could also give them the opportunity to respond via email or in person, whichever is easiest for them. It should be each business’s goal to make this process as easy as possible for the customer.
Lastly, in order to ensure businesses perform proper due diligence when sending these letters, they should keep a yearly mailing schedule. This mailing schedule will help them keep track of when letters are sent as well as to whom and at what address. This will help them track who responded as well as estimate at any given time how much unclaimed property they are in possession of and will have to report to the state. Furthermore, this will help them guarantee they meet all state requirements for mailing due diligence letters while also ensuring they comply with any and all unclaimed property laws.
If you are a business owner setting out to send due diligence letters or report unclaimed property for the first time, the Dunbar Group is here to help.
Dunbar is a reputable provider of unclaimed property compliance services, offering a comprehensive suite of solutions to help organizations remain compliant with all applicable laws. With a professional team with decades of experience, Dunbar is the ideal choice for businesses seeking a reliable and knowledgeable provider for their unclaimed property compliance needs.