Proactive outreach isn’t just good compliance — it’s a business strategy.
By Maureen Grollman, Practice Leader, Dunbar
Most financial institutions think of unclaimed property as a compliance obligation, something that is unavoidable. Dormancy periods expire, due diligence letters go out, and whatever doesn’t come back gets reported to the state as unclaimed property. It’s often treated as an administrative task, not a strategic one. But that approach is costing financial institutions far more than they realize.
Unclaimed property is permanent. Once an asset is remitted to a state, the bank loses the account, the customer relationship, and the deposit. For financial institutions especially, that means lost balances, lost fee income, and lost lifetime value, all because a customer moved, changed their name, or simply forgot about an account.
The Real Cost of Letting Accounts Go Dormant
The financial impact of escheatment extends well beyond the value of the remitted property. There’s the cost of due diligence mailings and compliance reporting. There’s the staff time spent preparing reports across dozens of jurisdictions with different rules and deadlines. Introducing areas of risk across the organization. In addition to that, there’s the audit exposure. States are becoming increasingly aggressive with unclaimed property examinations, and noncompliance can result in interest, penalties, and years of backward-looking liability.
“The companies that come to us after an audit always say the same thing: ‘We didn’t know how exposed we were.’ But the exposure was avoidable. If you locate the owner before the dormancy period expires, there’s nothing to report.” — Maureen Grollman
Why Owner Location Changes the Equation
Owner location and dormant account reactivation shift the strategy from reactive compliance to proactive retention. Instead of waiting for accounts to become reportable, financial institutions invest in finding the account holder, reestablishing contact, and reactivating the relationship,
This approach works because most dormant accounts aren’t truly abandoned. The owner moved. The contact information is outdated. A name changed after marriage. In many cases, a well-designed outreach program using advanced search techniques and customized communication can reconnect a financial institution with its customer in a matter of weeks.
The Business Case Is Clear
When a dormant account is reactivated rather than reported as unclaimed property, the company retains the deposit or balance, preserves the customer relationship, avoids the cost and complexity of compliance reporting for that account, and reduces future audit exposure. It’s one of the rare situations where compliance and business strategy point in exactly the same direction.
For financial institutions, the math is straightforward. The cost of a targeted owner location program is a fraction of the value of the assets retained. And the downstream benefits, reduced compliance burden, lower audit risk, and preserved customer relationships, compound over time.
A Smarter Approach to Compliance
Most states want property owners to be found. That’s the entire purpose of due diligence requirements; but state-mandated due diligence occurs too late in the game. Waiting to send a letter until the account has been inactive for years yields minimal results. Companies that invest in professional owner location services that use advanced data analytics, customized communications, and persistent multi-channel outreach are meeting the spirit of the law while protecting their own interests.
Unclaimed property should be a last resort, not a default outcome. Financial institutions that treat it that way are the ones building stronger compliance programs, reducing risk and retaining more active customer portfolios.
To learn how Dunbar’s Owner Location and Dormant Account Reactivation services can help your organization reduce escheatment and retain customers, contact us at info@dunbargroup.com or visit dunbargroup.com.