Commentary: claiming your property under attack in Arizona

Let’s imagine a common scenario. Years ago, your spouse purchased a life insurance policy and named you as the beneficiary. Decades go by, and sadly your spouse passes away. Given the time that has passed, maybe you forgot about the life insurance policy, or maybe you were never told about it. Regardless, because you’re not aware of its existence, you don’t know to claim it.

Diane Brown

Diane Brown

To help ensure that you are given the money that is owed to you, state law requires that corporations in possession of “unclaimed property” hand it over to the rightful owner or the state so that it can track you down and return the money. To increase the likelihood of finding the rightful owner, the state of Arizona (as does nearly every state in the country) hires outside auditing firms with the expertise to audit large, complex, multi-state corporations that have a high likelihood of non-compliance.

Since having these auditors as permanent state employees would cost taxpayers a significant amount of money, Arizona pays these outside auditors on a contingency fee basis, meaning they get paid a small percentage of the money they uncover and hand over to the state. The contingency fee is paid by the state and does not come out of the amount that’s owed to the person or business the money belongs to. If you are owed $50,000 as result of your spouse’s life insurance policy, that’s the amount that would be given to you.

Not surprisingly, life insurance companies and other large corporations in possession of unclaimed property don’t like to be audited. They would rather keep and profit from the money themselves, even though it doesn’t belong to them. To help give themselves the upper hand, they are pushing a bill (HB 2343) that would prohibit the Arizona Department of Revenue from entering into contracts with outside auditing firms on a contingency fee basis. In its current form, this bill is a threat to the citizens of our state and should not be passed.

Each year, millions of dollars of unclaimed property is returned to its rightful owners in Arizona. In fiscal year 2015, Arizona uncovered $84.5 million in unclaimed property, almost $11 million of which was discovered as a result of audits performed by the outside auditing firms hired by the state on a contingency fee basis. The current system is working and shouldn’t be changed for the benefit of large insurance corporations at the expense of Arizona citizens.

As the Arizona State Senate begins to consider HB 2343, we encourage elected officials to oppose this anti-consumer bill. When it comes to unclaimed property, it should be easier, not harder, for hardworking Arizonians to recover money that’s rightfully theirs.

To see if you are owed any unclaimed property, visit www.azunclaimed.gov.

Editor’s note: Ms. Brown is the executive director of the Arizona Public Interest Research Group

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