New laws proposed in the Virginia legislative session this year could bring major changes to unclaimed property in Virginia.
Unclaimed property is "money, stocks, bonds, dividends, insurance proceeds, tangible property and more" that is held by the state until claimed by the resident, according to the Virginia Treasury.
The ideas presented in the bills have gained overwhelming support in both the Virginia House of Delegates and Senate.
This effort from lawmakers is in part due to a WTKR News 3 year-long investigation.
Watch previous coverage: Unclaimed property generates millions for Virginia
Waiting for a response
Like many others, Norfolk Resident Mark Palaszewski saw his last name printed in the newspaper under people who are owed money from unclaimed property from Virginia Department of Treasury.
He said there were four claims for his deceased parents.
Palaszewski filed the claim back in May and said he sent death certificates, his social security number, and a bunch of other personal information.
He said he heard back in October saying they needed another copy of his identification.
“Kind of threw me for a loop because I already sent that information in already,” said Palaszewski.
As of February 11th, Palaszewski said he is still waiting for a response about the money owed to him.
He said he understands his claim is more complex due to this involving his deceased parents, but is frustrated by the entire process.
Watch: In January, Treasurer declines to answer questions about unclaimed property
The state treasurer responds
About a year ago, WTKR News 3 got an email from Ron Lizzi, a national unclaimed property watchdog. He asked us to further investigative the unclaimed property practices in Virginia because, he says, not enough is being done to reunite people with their money.
“The goal is to return money, not to place high standards that prevent people from getting their money,” said Lizzi.
The Virginia Treasurer’s Office had wrongly been reporting to us for years they had $2 billion dollars in total of unclaimed property that had collecting for decades.
Our investigation exposed that the number was $3.6 billion, and they now say they have $3.8 billion.
But Virginia Treasurer David Richardson said the vast majority of the money could never be returned to the rightful owners. Here's why:
“First and most importantly, a rightful owner’s claim to unclaimed property is perpetual and has no statute of limitations. Second, as we have discussed, the current value of claimable property in our system is around $3.8 billion (yes, the number is up from the $3.6 billion number from a few months ago, reflecting our success in collecting unclaimed property from the businesses that hold it). Third, also as we discussed, given (1) the age of the vast majority of our unclaimed property, (2) that we do not receive that property until the reporting businesses have attempted to find the owners for the statutorily required period of five years for most types of property, and (3) the fact that most of the property we receive is not accompanied by sufficient information on the rightful owners (i.e. no addresses, full names, social security numbers, etc.), it is unlikely that the vast majority of the property we hold will ever be reunited with its rightful owner. Fourth, every year, using historical data, our program conducts an analysis of potential funds we anticipate returning to citizens. Based on this estimation, we set aside enough funds to ensure we can meet our obligations, and all other held funds are transferred to the Literary Fund as we are statutorily obligated to do.”
We recently asked Richardson why Virginia has $3.8 billion of public money, compared with our neighbor, North Carolina, which has less than half that amount, at $1.4 billion dollars, despite a higher population than the commonwealth.
He wrote, “Unfortunately, no. Every state’s unclaimed property laws and procedures vary widely, so it is very difficult to compare one state to another on metrics like this.”
Watch previous coverage: Lawmakers introduce bills to rework unclaimed property
Enter House Bills 1606 and 1640
Del. Phil Hernandez has recently proposed House Bill 1606, which would allow the treasury to automatically send out checks to people who are owed $5,000 or less without filing a claim.
Several states in the U.S. already did it this way.
House Bill 1640, introduced by Del. Cliff Hayes, would force the treasury to work with the Department of Taxation.
We previously asked Davidson about House Bill 1606 and House Bill 1640 via email. He wrote:
“Virginia has made important reforms in the past two years to improve the efficiency of the unclaimed property process in Virginia. The implementation of a new best-in-class claims system used by over 30 states now permits owners to submit claims electronically. HB 1606, and its cognate SB 996, represent bipartisan legislation that will further support our ongoing efforts to improve Virginia’s unclaimed property processes. We appreciate both the recent House and Senate votes and look forward to the success of this consequential legislation this session”
But Lizzi believes there is still more than could be done to reunite, not just people, but business, churches, cities and nonprofits with the money they are owed.
A search on the VA Money Search website shows thousands and thousands of dollars owed back to all kinds of cities across the state, businesses, nonprofits, and other groups.
“I would like a state official to go on camera and explain why the state needs to be holding thousands of dollars for Toys for Tots," said Lizzi, who added that the National Park Service and National Wildlife Federal are also included. "It doesn't make any sense."
Richardson said they reunited $85.2 million with rightful owners in 2024.
Watch: House expected to vote on unclaimed property bills
More to be done
Lizzi said he is glad there is new legislation, but believes there are a lot more things that can be done to reunite the public with their money.
“I'm happy that progress is being made, and that at least people are now aware of the problem. I commend you for following up on this repeatedly,” said Lizzi. “Everybody should be on the same team trying to return this money. It's the right thing to do. It's the ethical thing to do.”
Richardson refused to speak to us on camera in January when we saw him at one of the sessions in Richmond but he now says, “I am open to an interview, but think it makes more sense to do so after the legislative session is over, and the governor has signed whatever unclaimed property legislation presented to him.”
We asked Richardson if HB 1606 gets approved, what changes will impact the public and if his office will start sending out checks without citizens having to file online claims for under $5,000.
“Yes, for properties that have enough identifiable information – name, address and social security number - we will start coordinating with our UCP vendor to begin the process of sending out letters to potential owners and allow enough time to ensure that those letters don’t come back as undeliverable before we can actually send out checks.”
We asked Richardson if the bill passes, how many claims will his office be able to send out automatically and what is the total amount of money he will be able to send out automatically.
“Until we have done the necessary due diligence with our outside vendor, it is impossible to know how many claims we will be able to process or what the aggregate dollar amount of those claims will be under the new methodology. Other states have indicated they proactively send out around 100,000 checks a year with an aggregate dollar amount of around $30 million.”
Watch: House advances unclaimed property bill
In April 2024, WTKR was told the treasurer’s office does not work with other state agencies to help track people down. Other states use the Department of Revenue or the DMV websites but Richardson recently explained that his office and the Tax Department created a partnership. He offered the following explanation:
“Approximately six months ago, we entered into a Memorandum of Understanding with Tax regarding the sharing of information to assist with our unclaimed property operations. To date, we have utilized that MOU to assist in our efforts to collect unclaimed property from the businesses that hold it. Because Tax does not have all the information Treasury would need to proactively return money to citizens, we believe that, at least for now, we can reunite more rightful owners with their unclaimed property more quickly and efficiently by using our outside vendor.”
We will continue to follow through on what happens with these potential changes to the law.
