An unclaimed property due diligence letter is a formal notice a bank, employer, broker, or other company sends you before handing a dormant account or uncashed payment over to your state’s unclaimed property office. Under the model Revised Uniform Unclaimed Property Act, holders must mail the notice between 60 and 180 days before filing their annual report, and the letter must give you at least 30 days to respond. If one landed in your mailbox, it means a company you did business with hasn’t heard from you in a while and is about to lose the legal right to keep your money.
If You Just Received One
Start by confirming the letter is real. A legitimate due diligence notice comes from a company you’ve actually done business with, names a specific account or property type, and never asks you to pay a fee to get your own money back. It should reference your state’s unclaimed property program and give you a way to reach the holder directly. If anything looks off, don’t call the number on the letter. Look the company up independently and call that number instead.
Once you’ve confirmed it’s genuine, respond before the deadline printed on the notice. In many cases, a phone call is enough. Other holders want you to sign and return a form, log in to your online account, or request a replacement check. Whatever the method, make contact inside the window. Once you confirm your identity and acknowledge the account, the dormancy clock resets and your property stays with the holder.
If you miss the deadline, you haven’t lost your money. The owner’s right to claim the property doesn’t expire; it just moves from the holder to the state. Every state runs a free search tool through its treasurer or comptroller’s office where you can look up property reported in your name. Use the official state website rather than a third-party “finder” service that charges a fee for a search the state provides for free.
How to Spot a Fake Notice
Scammers piggyback on unclaimed property because the premise sounds too good to be true even when it’s legitimate. A few things reliably mark a fraud. Any demand for an upfront processing fee to release your funds is a scam. Legitimate holders and state agencies never charge owners to return their own property. Pressure tactics are another tell: real programs don’t call to say they’ve “extended the deadline just for you.”
State unclaimed property offices don’t send text alerts about abandoned property, and they don’t cold-call demanding bank routing numbers or Social Security numbers. If someone contacts you claiming to represent a state program, hang up and search for your state’s unclaimed property office directly through its official government website.
What a Legitimate Letter Must Contain
The Revised Uniform Unclaimed Property Act sets a minimum. The notice has to open with a heading telling you in plain terms that your property will be transferred to the state’s unclaimed property administrator if you don’t respond by a specific date, and that date must be at least 30 days after the date of the notice.
The letter also has to identify what the property is and what it’s worth. You should be able to tell whether the notice concerns a forgotten savings account, an uncashed dividend check, or shares of stock. For property without a fixed dollar value, a description of the asset type is enough. The letter must say the property is headed to the state administrator and must provide the holder’s contact information so you know exactly who to call or write.
Most letters go beyond the minimum and include an account or reference number, a reply form, and the state unclaimed property office’s contact details. Some include a checkbox form where you can request a replacement check, update your account information, or confirm you want the account kept open.
Why You Got the Letter
The letter is triggered by dormancy. An account goes dormant when the owner hasn’t made a transaction, logged in, cashed a check, or otherwise confirmed they know the account exists. Each state sets its own dormancy period, but most run between one and five years depending on the property type. Payroll checks tend to have shorter windows. Securities and trust assets often get longer ones. Once the dormancy period runs out without owner contact, the holder is legally required to begin the escheatment process, and the due diligence letter is step one.
Not every dormant account produces a letter. The model act sets a value threshold of $50, so property worth less can be reported to the state without written notice to the owner. Some states set the bar lower, around $25 for securities. Others set it higher. The threshold exists for a practical reason: certified postage can cost more than a tiny account balance is worth.
Compliance Obligations for Holders
If you’re on the other side of this process (running compliance for a company that holds other people’s property) the rules carry real teeth.
Delivery Methods
First-class U.S. mail to the owner’s last known address is the baseline, provided your records don’t show the address is invalid. Many holders print “Address Service Requested” on the envelope so the post office returns the letter with a forwarding address if the owner moved.
For higher-value property, some states require a second notice by certified mail with return receipt requested. The threshold varies, but $1,000 is a common cutoff. In those jurisdictions, the first-class letter goes out first; if no response comes, a certified letter follows. The return receipt creates a paper trail that matters during audits. The cost of certified postage can typically be deducted from the property as a service charge.
The model act was the first uniform code to address electronic notice, and states have split. Some allow email instead of physical mail. Others require email in addition to the mailed letter when the owner previously consented to electronic communications. The common thread is consent: you can’t substitute email for postal mail unless your records show the owner agreed to receive electronic communications, and you have to have reason to believe the email address is still valid.
Record Retention
Holders must keep records for 10 years after the report is filed or should have been filed, whichever is later. Documentation needs to cover the date and nature of the original transaction, the property’s value, the owner’s last known address, and copies or logs of the due diligence letters sent. Several states effectively extend retention well past a decade once the dormancy period is stacked on top. Destroying records early is one of the fastest ways to lose an audit, because without documentation the state estimates what you owed and you have nothing to push back with.
Penalties for Non-Compliance
Skipping due diligence or filing late carries penalties that vary by state but consistently bite harder than companies expect. Interest on unreported property typically runs 10% to 18% per year, calculated from the date the property should have been reported until it’s actually remitted. Some states add flat late-filing penalties of 5% to 10% of the property’s value, daily fines that can reach $200 per day, and civil penalties for using the wrong payment method. In a handful of states, willful non-compliance can be charged as a criminal misdemeanor.
Audits produce the biggest exposure. States increasingly hire third-party audit firms that work on contingency, which gives them a direct incentive to find unreported property. When a holder can’t produce records of due diligence, the auditor estimates liability going back as far as the retention period allows, and those estimated assessments almost always exceed what the actual liability would have been.
Business-to-Business Property
One boundary worth flagging: when both the holder and the owner are businesses, some states provide partial or complete exemptions from reporting. The scope varies. A handful of states exempt most business-to-business transactions outright. Others exempt only certain property types like credit memos and rebates. A third group treats the exemption as a deferral tied to an ongoing business relationship, with the dormancy clock starting once the relationship ends. Even in states with broad exemptions, holders are generally still expected to try returning the property to its rightful business owner first. Multistate holders need to evaluate each jurisdiction separately, because a transaction exempt in one state may be fully reportable next door.