By Harold Kim
Executive Vice President, U.S. Chamber Institute for Legal Reform
We've written often about states hiring aggressive auditors on a contingency fee basis to dredge up purportedly unclaimed property, and released a 2014 paper recommending best practices for state administrators in hiring such firms. Unfortunately, the profit motive of these firms often creates a built-in incentive to aggressively interpret and exceed the boundaries of unclaimed property laws.
Today, the issue flared up when the Oklahoma Treasurer blasted as "shameful" bills aimed to introduce rationality and integrity into the current system and to be a significant step toward fixing this problematic incentive structure. Currently, Oklahoma is considering banning the hiring of unclaimed property audit firms on a contingency fee basis. This would help ensure that unclaimed property enforcement is driven by connecting property to its owners, not by enriching audit firms that may or may not be testing the bounds of the law.
Unclaimed property enforcement should not be a get-rich scheme for auditors, it should be a fair process where both the state and businesses work together to unite owners with lost or forgotten property. Oklahoma's bills are a step in the right direction.