Written by: Misty Harbeck – Senior Manager, Unclaimed Property
Most large organizations understand unclaimed property requirements. Dormancy periods, due diligence, reporting deadlines—none of this is new.
And yet, compliance continues to break down.
The issue isn’t knowledge. It’s execution—whether requirements are carried out consistently, accurately, and across every jurisdiction. For organizations with complex, multi-state footprints, that’s where compliance becomes difficult to sustain.
A Fragmented System That Doesn’t Scale Easily
Unclaimed property compliance is fragmented by design. Each state defines its own dormancy rules, due diligence standards, and reporting requirements. What works in one jurisdiction rarely translates cleanly to another.
At scale, this creates a fundamental challenge:
Can you confidently say you’re compliant everywhere you operate?
For many organizations, the answer is uncertain—not because processes don’t exist, but because they don’t scale consistently.
Where Compliance Breaks Down: Due Diligence
Due diligence is the most common point of failure and the most operationally demanding.
When due diligence fails, compliance fails with it.
It’s not just a notice requirement; it’s the final opportunity to return funds to the owner before they are reported to the state. Execution, however, requires precision. Notices must be sent within strict windows—typically 60 to 120 days before reporting—while meeting state-specific rules for language, format, delivery method, and thresholds.
Unclaimed Property Compliance Must Be Provable
Under audit, states expect detailed records of owner outreach, copies of due diligence letters, and clear evidence of responses and resolutions. Informal owner contact, including phone calls or unverified communication, should also be documented and verified by the holder.
Returned mail should be treated as an important part of the due diligence process. Returned mail, often marked as “Returned Not Deliverable,” indicates that the address on file is incorrect or incomplete. When mail to the owner is returned, organizations should promptly update their systems, so addresses can be corrected in source records or flagged to avoid unnecessary future outreach. If an address is known to be incomplete or invalid, many state statutes waive the requirement to send a formal due diligence letter. Documentation of returned mail should be retained for the full unclaimed property record retention period. Ideally, returned items should be scanned, retained, and documented.
Organizations that rely on manual tracking or fragmented systems often have greater difficulty demonstrating why certain items are not reportable during an audit. Without defensible documentation, even well-executed processes may not withstand scrutiny.
The Hidden Gap: Record Retention
Unclaimed property follows a longer record retention timeline than most accounting processes. While many organizations keep records for seven years, unclaimed property records generally should be retained for the applicable dormancy period plus an additional ten years.
Record retention is a core compliance control and the best defense during an audit.
Records should include as many property details as possible, state reports, legal entity information, accounting and banking records, copies of due diligence letters, and all owner correspondence. Without documented history of the property, organizations may struggle to support prior decisions during an audit, especially older liabilities. Strong retention practices help organizations demonstrate compliance, support audit readiness, and provide a defensible record of past actions and decisions.
Fraud Risk & Owner Trust
Unclaimed property compliance also intersects with fraud prevention in ways that are often underestimated.
Organizations must verify claimants, protect sensitive data, and ensure funds are returned to the correct owner while managing increasing skepticism from recipients. Strong internal controls, verification, segregation of duties, and secure payment processes are essential to maintaining both compliance and trust.
DMA supports organizations in establishing secure, compliant processes that balance regulatory requirements with owner trust, ensuring that outreach is effective, responses are validated, and funds are handled appropriately.
The Bottom Line: Unclaimed Property Compliance is an Execution Challenge
Unclaimed property compliance challenges stem from fragmented execution rather than unclear rules. The combination of numerous jurisdictions, varied requirements, and heavily manual processes creates a complex environment where maintaining consistent, reliable outcomes requires a more unified and coordinated approach.
Leading organizations treat unclaimed property as an ongoing operational discipline—standardized, centralized, and designed to scale. This approach enables a structured transition from reactive compliance to controlled, consistent execution.
In an environment of heightened enforcement and increasing complexity, organizations are elevating unclaimed property to a more disciplined, proactive model. Compliance is defined not only by timely reporting, but by the strength, transparency, and audit readiness of the underlying process.
DMA operates as an extension of your tax and finance team to bring structure, control, and confidence to your unclaimed property compliance process.
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